Internet Marketing Assignment Essay
Internet Marketing Assignment
E-Commerce describes any business to consumer transactions that take place partly or solely online and is not limited to the purchase of physical products from a website – although that does make up a key component of most e-commerce businesses. Some services or products are sold purely online while other companies may have physical stores or headquarters in addition to their online presence.
E-Business describes any business to business transactions that take place online. For example a Web Design company often doesn’t sell products directly to consumers, but instead creates websites as a service for other companies, which will in turn be used to sell products or services to consumers.
The internet has revolutionised the way companies do business. The shift in the way people shop has had a big impact on both the micro environments – the individual companies and their direct stakeholders; and the macro environment – politics, economy and society as a whole. “The death of the high street” has been an obvious effect of these changes with many stores shutting down.
Those who fail to keep up with these changes will be more likely to feel the negative consequences – as was the case with HMV and Blockbuster, who were forced into administration as competing online services took over their market share.
For those who do keep up however, business is booming. iTunes, Amazon and Netflix are Blockbuster’s and HMV’s online equivalents and all three have billions of users from all around the globe.
While the amount of jobs available in retail positions has been on a steady decline over recent years the demand for skilled workers in the IT sector is bigger than ever – so much so that there is a shortage of candidates and many roles go unfilled. A report issued by the government regarding the UK cyber security strategy highlighted that the “current and future ICT and cyber security skills gap” was a “key challenge” in implementing the strategy. (National Audit Office, 2013)
To address this problem the education system needed to be changed, as of 2014 children as young as 5 will be learning advanced computing as part of the curriculum. Higher Education institutes will also likely have to reassess their course material to accommodate the new generation of students who will be leaving school with more in depth knowledge of computer systems and software development.
Consumers gain many benefits from e-commerce, they now have the choice of shopping from an almost unlimited choice of companies from all around the world. Comparing prices and finding out what other customers thought of a product is also made much easier by the internet.
The change in peoples shopping habits has changed the way companies advertise, huge marketing budgets for prime-time TV commercials are no longer the only way to get noticed and the potential audience is now global.
Elements of Internet Marketing
Traditional styles of advertising such as TV, newspapers, magazines, billboards etc are based on an “interruption” model. A show is interrupted by TV advert; music is interrupted by a radio advert; the flow of an article is interrupted by a magazine article, etc. This style of advertising persisted and still exists today in many places – but more and more companies are realising that demanding a customer’s attention in this way online does not yield good results. Some elements of internet marketing are examined below.
Organic search results account for a significant percentage of internet traffic. (The actual number is hard to measure for reasons discussed in the “Internet Marketing Tools” section on page 11). Regardless of the specifics it is widely accepted that organic search results are where a huge amount of a websites visitors come from. Search Engine Optimisation is therefore a vital part of a marketing strategy. Paid advertising through search engines may also be considered for extra exposure but is no substitute for a properly designed site structure and key word rich, quality content for search engine robots to crawl.
Often good practices for SEO also embody good practices for UX design and accessibility; humans and robots alike prefer sites that are easy to navigate and have well-structured content that makes use of headings and sections to make it easy to read; as well as alt tags on all images that give a clear description of what that image depicts; with internal and external links within the content when the context is relevant.
In the early days of search engines keywords were all that mattered, so it was easy to rank high on Google simply by stuffing as many keywords into the headers meta-tag as possible. Key word meta-tags are now obsolete and search engines have become much more sophisticated. (Google, 2011) As well as crawling site structure and content to determine the quality of a page search-bots also judge the integrity of a page. They do this by keeping track of how many external sources link to it – at first, this encouraged “link farms” (a company would pay for a web traffic boosting service, which would churn out their site’s URL over a network of dummy sites set up purely for the purpose of creating links) – as search engines evolved this method is no longer as effective.
Google now has algorithms that also measure the integrity of the sites that the links come from to provide users with more relevant results. Ranking high on Google for certain keywords is a long process, a new website has to build up a reputation, get their content shared and linked by others in an organic way – by having an article shared on social media for example – not through a link farm. Google strives for excellence by constantly improving its algorithms, they want to offer their visitors relevant search results so people continue to use their service and marketing strategies have to adapt if they want to keep up.
Organic search results are a perfect example of marketing that doesn’t feel like marketing to potential customers. They are using search engines to find something specific – the hard work has been done for you, they already want to buy something or have some sort of problem solved – and if good practices for SEO have been implemented there’s no reason a website they find through Google would be irrelevant and not what they’re looking for, Google’s algorithms make sure of that and there are no shortcuts or cheats to trick them. A site filled with links and crammed with keywords for the sole purpose of getting more people to visit your website achieves nothing, if they click on it and it isn’t relevant to what they’re looking for they won’t just buy your product or service anyway, they will leave. The amount of time people spend on a website and the actions they take there (signing up for a newsletter, making a purchase, etc) is all tracked by Google and used as part of the algorithms to determine the quality and integrity of a website.
Banner Advertisements are based on the classic interruption model and the vast majority of internet users don’t like them; and a huge percentage use software to block them completely. This has been determined multiple times over the years by a number of different researchers. One study conducted by the Norman Neilson Group, experts in Usability Heuristics, found that most users will completely ignore anything that looks like an advert – even when it’s not; and even when it provides them with the information they are looking for.
In one study participants were asked to find the population of the United States using the U.S Census Bureau website – which was presented in large red numbers on the right hand side of the home page. 86% of users ignored it because it looked like an advert, it was bold and placed in the location that adverts are traditionally placed so was disregarded, despite containing the exact information they were looking for. The pie chart shows an overall representation of the behaviour exhibited by users on the site.
In a different study eye tracking software and real time observation was used to measure exactly where people look on a website and how they interact with its various elements. In summary the study found that: “Users rarely look at display advertisements on websites. Of the 4 design elements that do attract a few ad fixations, one is unethical and reduces the value of advertising networks.” (Nielsen, 2007) The four design elements in question that users have been found to give their attention are: text, faces, cleavage/other body parts (“sex sells” still rings true for internet marketing) and obnoxious, intruding banner advertisements.
Banners that sit and do nothing are considered a more ethical way of advertising, unfortunately studies show that ones that make sounds, pop up into the users line of sight or are animated attract more attention. However, just because a person is more likely to look at an obnoxious ad, that doesn’t mean they will click on it and be prepared to hand over payment details. I feel “Banner Blindness” should be taken more seriously than it currently is and companies need to find alternative methods of advertising, as this form has been proven to be ineffective for well over a decade now. (The same study with the same findings was first conducted by the NN group in 1997.) Social Media
Websites such as Facebook, Twitter, Instagram, etc are no longer just the domain of a young tech-savvy audience. Data collected from a survey conducted by Princeton Survey Research Associates International found that Social Media usage has increased by 800% since 2005. In contrast, TV viewership has decreased by 50% in the same time frame. The graph below shows the findings, broken down by age Social media marketing can connect businesses with millions of potential customers. Not only that, it can be done for free; unlike television and other traditional methods of advertising that require a substantial investment up front with virtually no guarantee of a return. Paid advertising on Social Media can also be tailored to target a specific audience. The ads can be set up to only display to those who will be the most likely to click on it. A bar advertising for fresher’s week for example could target their ads at students who were over 18 and living in the local area.
The use of strategic content ties in with SEO and Social Media marketing; it involves creating content (as a blog for example) that is useful or interesting in some way (as well as relevant to the business) to encourage visitors to come to a website. From an SEO standpoint this will make the site rich with content, keywords and links which can result in higher rankings on search engines which means visitors are more likely to find your website. For example a company specialising in web design may have a design and technology blog providing expert information and up to date news on technology, or perhaps a section featuring tutorials and templates. Providing free content that’s similar to what you’re trying to sell can seem counter intuitive but it helps cultivate trust, it provides evidence that the company knows what it’s talking about and gives potential customers an overview of how things are done. Content can be shared around social media, and if it’s interesting or informative people may share it with their friends which results in more exposure.
Forming mutually beneficial deals with other companies and cross promoting each other can widen the audience they both reach. Youtube and Twitch for example are used as platforms for gamers and game publishers to work together; publishers provide high influence content creators with early access to games, which they broadcast to all their fans. The content creators gain more views and in return more people get to hear about the game and see how it plays – making them more likely to buy it. This kind of promotion doesn’t cost either party any money but is beneficial and profitable for everyone involved.
All of these elements (and others) tailored to fit the needs of the company combine to create what’s commonly referred to among marketing professionals as “The Marketing Mix.”
The Marketing Mix
The Marketing Mix: a phrase first used by Neil Borden in his paper “The Concept of the Marketing Mix” has become a well-known term for describing the strategies formulated to advertise services and products. One of the most widely used marketing mix paradigms is “The Four Ps”; proposed by E J McCarthy in 1964. The Four Ps are:
Whether it be a tangible item or a service, first and foremost you need something to sell. What do customers want to buy? What features does your product or service need to fulfil the needs of your potential customers?
In the past, brick and mortar stores and catalogues were the only two options to consider, the internet has made a global market much easier to reach but has also made the market much more competitive. Companies need to consider where customers might look for their product. Is a physical location required or can the business exist solely online? The pros and cons of each would need to be considered, for example a small start-up clothing store would be competing with huge corporations such as Primark, Debenhams, etc while paying for expensive running costs of a brick store, stock storage and paying for staff wages.
Online, that same start-up company would still be competing with those same corporations as on the high street, plus a huge other array of smaller or medium sized online outlets. However the running costs and risks of an online-only start-up are minimal. A company can exist solely as a part of a larger organisation such as Ebay or Etsy; many who start out this way and find success then choose to invest in their own website for selling their products without the middle man. Some then may also go on to open high-street stores, for example Simple Be existed as a purely online business at first before investing in physical stores; which have an advantage over online only clothing stores as customers can try things on and won’t have to worry about complicated returns procedures.
Finding the right price for a product or service is a balancing act. Price too high for your target market and nobody will buy. Pricing too low not only means lower profit margins but can also label your product as “cheap” which may not be an image the company wants to convey. Apple are a perfect example of hitting the perfect price to quality ratio for their products target market. Apple products are hugely popular despite being comparable in technical specifications to other, lower priced competing devices.
Ken Segall, Apples former marketing executive, said himself that “Apple doesn’t do cheap” stating in his blog that Apple “makes products for people who care about design, simplicity, quality and a great experience — and are willing to pay more for these things. For Apple to compromise in any of these areas would be a violation of the Prime Directive.” (Segall, 2014) Apple products are desirable because they’re seen by their fans as the most prestigious and high quality brand, this image would be diminished if the products were cheaper; as was demonstrated by the relatively low sales of the iPhone 5C which was made of plastic and lower in price than other Apple devices (Though still much more expensive than competing brands).
A great product won’t sell if nobody knows about it, but similarly a terrible product won’t sell well no matter how much time and money goes into advertising. The point of advertising is to convinced potential customers that your product or service will add value to their life in some way that’s relative to the price they would pay for it.
This model can be applied to a wide range of services and products as it is non-specific and can easily be tailored to fit the needs of the business using it. It all boils down to putting the right product in the right place at the right price.
Several alternatives and additions have been suggested by marketing experts and academics alike in the interest of creating a marketing mix that’s more relevant in an industry that has changed in ways nobody could have predicted. When the 4P’s were first introduced in the 60’s the internet as we know it today did not exist so it’s reasonable to say new strategies and updated methodologies are required.
Some additions that have been suggested include “people” – encouraging good customer service and a good working environment for employees. “Process” – looking at ways to streamline and reduce costs in both producing the product and how the business is run. “Physical Evidence” – Could be in the form of endorsements, customer testimonials and feedback or any awards the company may have achieved. Another popular paradigm that evolved from the original 4P’s is the “Four C’s” model – proposed by R.F. Lauterborn in 1993.
The customers are the driving force behind any business, so an organisation should ask themselves what they can do for their customers – what needs and wants to they have and how can you help?
How much will it cost the customers, are they getting good value? If your product is more expensive than competitors, why? Does it offer superior quality? If it’s cheaper, again customers will want to know why, will they be compromising on quality? Or does the business create lower costs by streamlining internal processes and passing the savings on to the consumer?
People buy things that they believe will make their lives easier or enhance it in some way; and when they want something they want it to be easy to find and simple to purchase. For example a clean, uncluttered website that makes finding and buying products easy will tend to sell more than one with confusing navigation and a lengthy checkout process.
All promotion and advertising is a way of communicating with customers, a way to get your message and brand out into the world and let people know what your product is and why people should buy it. Companies who stay engaged with their customers cultivate trust and loyalty which earns them repeat business and recommendations.
This model is essentially the same as the original version but is designed to encourage organisations to look at things from the customer’s point of view.
There are merits to both sides of the debate over whether the 4P’s need revamping. On the one hand the original is broad enough for marketing executives to use as a very rough guide to shaping their own unique strategy. On the other hand in an ever changing industry improvements on old practices is a good thing – how can the world evolve if change is not embraced? Doing things simply because that’s the way they have always been done may cause a company to stagnate and lose market share for not being innovative enough.
I would like to propose my own take on the marketing mix, the 4E’s model:
No matter the product or service, striving to be the best at what you do is a good goal to aim for. This is more easily achieved if a business focuses on one particular area rather becoming a jack of all trades and a master of none. Take for example the gaming company Mojang, who were recently purchased by Microsoft for $2.5billion. They developed one game – Minecraft – and they did it so well that it became more than just a simple browser game. It’s now an integral part of pop culture for this generations gamers with a huge diverse community that’s still growing 5 years on.
Similarly, Facebook bought Instagram for $1billion after it dominated the mobile photo sharing market and WhatsApp for a staggering $19billion – a simple messaging service that took off in popularity and quickly overtook market share from the big players like Microsoft and Google. (CNN Money, 2014) Facebook itself started as a simple project and is now one of the most powerful corporations in the world – buying off any competitors is one way to keep that lead. A simple concept executed well can change the world.
Social media and the internet in general have made communicating with customers easier than ever before. The best way to figure out what consumers want is to ask them. A business selling food products for example could engage with their customers by making a post on social media asking what different flavours they would like to see. This not only gives the company a firm idea of how popular a new product would be, it also generates buzz and makes the customers feel more involved in the process – making them more likely to actually buy said product when it’s released.
Creating quality, relevant content for a website – perhaps in the form of a blog – gives customers a reason to regularly visit a website. Using a food company as an example again, they could have a recipe section on their website. Maybe even a community section where others could post and share their own recipes. If these recipes are good quality it can lead to people thinking: “If the free recipes are this good, just imagine how great the food they sell will be!” – turning casual visitors into paying customers.
Allow potential customers to make informed decisions by providing them with information about what’s on offer in a way that’s easy to understand and easy to access – similarly ensure to make the process of handing over their money once they’ve decided to buy quick and easy. With an uncountable number of websites in existence a potential customer can be lost very easily if they can’t find what they’re looking for or find any part of the process difficult – they will simply go elsewhere.
Finding the right price for a product or service can still be as tricky today as it’s always been with one exception – information on competitors and target markets is readily available. Even in a niche market there are likely to be several competitors operating at varying scales of price and quality. The goal is not necessarily to undercut everybody and become the cheapest but to find the right balance of cost and quality – most people are happy to pay a little bit more for a higher quality product as long as they can justify that it will be worth the investment. Similarly there are many people who will buy the cheapest option available regardless of quality. Establishing a target market and researching purchasing habits can give a company a good idea of where to price themselves to be competitive and profitable. An expensive product can still be considered economical if its benefits are proportionate to its cost.
In the end, any model is only as good as the implementation. Knowing the concepts behind a good marketing strategy isn’t the same as having the skills to plan, implement and maintain them. Internet marketing campaigns take time. It takes time to gain enough followers on social media to start fully engaging with a target market; it takes time to create a catalogue of high quality strategic content and it takes time to build up consumer trust. Internet marketing isn’t as simple as making a Facebook page and uploading the company logo – the internet is an interactive medium. It’s not a billboard, it’s more a large ongoing focus group.
Internet Marketing Tools
One of the biggest advantages internet marketing has over traditional marketing is the fact the effectiveness of a campaign can be more accurately measured and analysed. Television adverts are measured in terms of how many people have viewed it; beyond that it’s mostly guesswork; it’s very difficult to measure how many people saw a television advert and then went on to perform the desired action (such as go to a store and buy a product, or make a phone call to enquire about a service). With internet marketing everything that happens as the result of a campaign can be tracked every step of the way.
An email marketing campaign for example can be tracked to see how many people opened the email, how many then visited the website (known as the click through rate) – from there it can also track what the visitor did while they were on the website. How much time they spent there, which pages they visited, whether or not they purchased something – or if they abandoned their cart in the process of trying to make a purchase. Other details such as which device the customer was using, their location, age and previous browsing habits may also be tracked.
Making use of tools such as Google Analytics can show at a glance the raw data related to any aspect of a visitors habits. There are many other tools on the market but Google Analytics is the most widely used and it integrates well with SEO – Google have built up a giant network of partners and billions of websites have tracking codes. Individual companies can access their own data to analyse but Google has access to everything and have built up a database of browsing habit data they use to improve their algorithms – as well as sell to third parties (such as Facebook). This creates a constant feedback loop for everyone involved.
This raw data however, is fairly useless if a company does not know how to analyse it and make use of the information. Some raw data has obvious implications – for example if a company finds that the majority of visitors are using a mobile device and their site is not fully accessible on mobile, they should look into optimising their site for mobile users to accommodate the needs of their customers.
Other times the data is only the starting point, it must be analysed before it becomes useful information that can be applied in a practical way. Tracking tools can give answers to the questions “how”, “when” and “where” with a high degree of accuracy. “Who?” can be answered to a point, the approximate age of visitors can be tracked, as can their previous browsing habits which may give some insight into their likes and needs. The one question raw data cannot answer is “Why?” – Why do visitors behave the way they do? Why do some e-commerce shoppers add items to a cart and then abandon it during the checkout process? Why was the click through rate low/high for a particular campaign?
Surveys and social media can be used as tools for getting answers to these questions. Once the quantitative data from tracking tools have provided a starting point, specific questions can be posed to collect qualitative data. Together they can give a company a lot of valuable information to help them improve future campaigns and the way they do business in general. Facebook has its own analytics tools called “Facebook Insights” – it works in a similar way to Google Analytics but is more focused around Facebook pages and ads. Facebook insights shows how many people saw a particular post (reach), how many responded to the post (engagement), and other information such as visitors ages and interests – based on what other pages they have “liked” on Facebook.
Facebook Insights can be used to determine which posts get the most likes and shares, which lets companies know what their audience is likely to respond to so they can tailor future posts accordingly. It can also provide information about when visitors engage with the page so future posts can be scheduled to post at a time when the highest reach is likely to be achieved.
Combined with the data from Google analytics social media marketing campaigns and posts can be tracked down to the fine details. If these posts lead to strategic content tracking can be broken down into stages to measure the quality of a websites content.
Many websites use this strategy, Cracked being one of them. Cracked are an entertainment website who post funny/interesting articles, columns, videos and podcasts. When a new piece of content is posted, their social media team make posts to advertise it to followers. Facebook Insights will provide the tracking information about reach, likes and engagement and Google Analytics takes over once visitors have clicked through. Cracked split up their articles into several pages – they could easily fit the content onto a single page – so why split it up?
One reason is usability, pages load quicker with less content on and readers are less likely to feel overwhelmed by a huge wall of text than they are several manageable chunks.
Another reason is SEO – the more pages and links robots have to crawl, the higher the site is likely to rank on search engine results. Instead of one page per article related to certain keywords – there are 2-4 pages per article.
Finally, splitting articles up into several pages allows tracking analytics to be performed in stages. How many people got to the end of the first page and deemed the content interesting enough to click on the “read more” link? How many read the whole thing? How many dropped out and where did they tend to do it?
This can help determine weak spots in content and the company can then formulate a plan to improve the situation. It can also be used to further engage visitors who seem to be enjoying the content – the final page of an article could for example act as a trigger for a pop-up box that prompts to visitor to sign up for a newsletter. If a visitor has enjoyed an article it’s relatively safe to assume they would like to see more – the same is not true for a visitor who has only just landed on the home page. They haven’t read anything yet, why would they want to sign up for a newsletter?
As mentioned in a previous section, tracking data does have its limitations that marketers have to be aware of to properly interpret the data their tools produce. Specifically – direct traffic can be difficult to differentiate from all other types of traffic. This makes analysing the effectiveness of marketing campaigns less straight forward than it seems. In a nutshell, whenever a referrer is not passed traffic is marked as direct.
What this means is a glance at an analytics report may suggest that 50% of a sites traffic is direct, meaning the visitor typed the URL directly into their browser. The report could for example state organic search accounted for 40% and advertisements 10%.
If a company is putting significant resources into advertising and seeing those kinds of numbers they may decide it isn’t worth it and seek to make changes. While in reality direct traffic may only account for 20% while ads account for 30%, making the cost per conversion rate much more favourable.
There are a multitude of reasons a referrer may not be passed to the tracking software that results in traffic being incorrectly marked as direct. For example many people make use of ad blocking software – that often have clauses that allow for non-intrusive advertising. While users of this software can see and click on non-intrusive ads, the software blocks the server response required to pass the referral to the tracking software. Many browsers now offer a “do not track” option to offer additional privacy to users, turning on this setting also blocks tracking requests. Some people may perform a search for something or click on an advertisement but not make a purchase right at that moment and instead choose to come back later – by typing in the URL directly; so their visit and subsequent purchase is marked as direct when it was really the result of a campaign.
As more users become increasingly concerned with privacy tracking and tailored advertising becomes more difficult. Making use of marketing tools makes the process easier but they are still only tools – their usefulness is determined by the skill of the person utilising them.
Interactive Order Processing
Order processing is obviously an important part of e-commerce, an online catalogue isn’t much use if people can’t actually purchase anything. As mentioned in previous sections, the process of placing an order should be made as easy as possible for the customers.
Once a customer has decided they would like to hand over some money – a company should not distract them in any way. Some companies at this point might be tempted to upsell, cross promote or place advertising on the checkout pages but in almost all situations this is a mistake. If the customer gets annoyed at the ads they will leave. If they can’t figure out how to continue with the checkout process because the design is cluttered or otherwise hard to use they will leave. If they don’t feel confident about the legitimacy of the company or doubt the security of the checkout process they will leave.
Upselling attempts should be handled carefully. Bombard customers will too many options and they may get distracted by browsing, decide not to check out and instead leave it for later – they may not come back. Relevant promotions should be advertised at this point or ideally added to the cart automatically. For example if orders over a certain amount receive free shipping this should be prominently displayed within the cart and applied automatically when the threshold is reached – customers like to feel like they’re getting good value so if they see it will only take them a small amount extra to receive free shipping they may decide to add a few more items.
Argos successfully uses this technique every year during the build up to Christmas – they offer a £5 voucher for anyone spending over £50 and £10 for anyone spending over £100. This promotion is prominently displayed all over their website, catalogues and physical stores. Rather than offering a discount on the current purchase, they encourage repeat business by offering money off the next purchase. This has a twofold effect – customers will buy a little more than they planned in order to get the voucher and then spend even more after that to use said voucher (not many items can be bought for under £5 or £10 and no change is issued – to further encourage customers to use their voucher in full and pay a little extra on top rather than waste any of it).
If adding additional items can be done without the customer leaving the checkout this will further increase the success of upselling attempts. Both Domino’s and Asda integrate upselling into the checkout process. Dominos uses a sidebar next to the main checkout area displaying a selection of small items (sides, desserts, drinks) with a small discount applied – visitors can click “add to order” and the total is updated on the page without taking them elsewhere. Asda displays a selection of items that the customer has previously ordered, but are not currently in the cart with the heading “Have you forgotten anything?” This can be helpful to the customer because they may have indeed forgotten something, and Asda in return make additional sales.
Businesses can track the behaviour of their customers and analytics tools can be used to determine if a checkout design is working.
The tale of “The $300 Million Button” published in Luke Wroblewski’s book “Web Form Design: Filling in the Blanks” contributed by Jared M. Spool is an excellent example of just how important the design of the checkout process is.
The piece describes a company who decided to examine their checkout process – which featured a login and registration screen after customers clicked “checkout”. Their designers reasoned that making registration non-optional would encourage repeat business; and customers wouldn’t mind logging in to take advantage of quicker checkouts in the future.
Spool was called in to analyse the checkout design; his team put together a focus group, gave them all a budget and a shopping list and asked them to checkout from the site. Upon being presented with the login form many participants were not sure if they had used the site before; and attempted many unsuccessful logins before clicking the “Forgot Password?” button. Many times this was unsuccessful as they couldn’t remember which email address they used. Others who were sure they had not previously registered were reluctant to do so. One shopper is quoted as saying “I’m not here to enter into a relationship. I just want to buy something.” Many stated that they felt the company just wanted to use their details for spam and others were concerned about privacy.
Upon examining tracking analytics for the site the team discovered that 45% of users had multiple registrations and over 160,000 “Lost Password” requests were being sent every day. 75% of these never returned to the site to complete the lost password process and ergo did not complete the checkout process.
Spools team suggested the design was changed to make registration optional. The “register” button was changed to “Continue” with the message “You do not need to create an account to make purchases on our site. Simply click Continue to proceed to checkout. To make your future purchases even faster, you can create an account during checkout.”
This simple change resulted in the number of customers purchasing increasing by 45%. The extra purchases resulted in an extra $15 million in the first month and $300million after the first year.
Businesses also need to take into consideration security when implementing an e-commerce system. A secure payment gateway must be used to make submitting customer financial and personal information safe. Similarly this data needs to be stored securely and kept up to date to comply with the Data Protection Act. Any company accepting card payments (not only online) must also comply with PCI-DSS (Payment Card Industry Data Security Standard).
If a company does not comply with PCI and DPA standards they run the risk of customer details being leaked which could lead to fraud. This is obviously bad for the customers whose details get stolen but would also damage the reputation of the company and destroy consumer trust – as well as earn them huge fines from governing bodies.
For small or start-up companies the cost, time and knowledge required to set up and maintain a payment gateway may feel like too much. In that case there are 3rd party services such as PayPal and Google Checkout which can act as a middle man between the merchant and customer. The business doesn’t have to worry about keeping customer details secure if they don’t store them and instead allow PayPal or similar to handle it. There are fees involved that work on a percentage basis, the more you earn, the more you pay. Additional fees are also charged for withdrawals. PayPal in particular has become an internationally recognised brand and most shoppers are now happy to use them – so a small company won’t lose out on too many customers from not offering alternative payment options.
Most third party payment processing companies offer a “free” (other than fees) service which hosts the shopping cart external to the main e-commerce site; and a premium subscription service which allows full integration of the shopping cart into the website.
For minimal cost and effort a small company can use the externally hosted cart while bigger companies may choose to invest in a more seamless user experience for their customers.
The web environment allows for scalability, businesses are free to start small with minimal risk and expand at their own pace.
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Segall, K., 2014. Apple’s adventures in plastic. [Online] Available at: http://kensegall.com/2014/02/apples-adventures-in-plastic/
Figure 1: How users interacted with the Population Finder4
Available at: http://www.nngroup.com/articles/fancy-formatting-looks-like-an-ad/
Fancy Formatting, Fancy Words = Looks Like a Promotion = Ignored JAKOB NIELSEN September 4, 2007
Figure 2: Social Media Useage over time, broken down by age5 Available at: http://www.pewinternet.org/2013/08/05/72-of-online-adults-are-social-networking-site-users/
72% of Online Adults are Social Networking Site Users
OANNA BRENNER, AARON SMITH August 5, 2013