Posts Tagged ‘e-commerce’

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5 Reasons E-tailers Must Use Web Analytics

Monday, August 18th, 2008

lindab.jpg Whether you’re using the free Google Analytics tools or a premium solution like Omniture, there are many metrics and reports that can help you understand how customers use your site and how your campaigns are performing. Here is a quick list of five valuable things web analytics can do for you:

1. Referring sites and conversions. It’s crucial to know which web properties are sending you traffic, especially if you have an affiliate program, use pay-per-click advertising or comparison shopping engines, buy banner ads or text links on other sites or invest in organic search engine optimization campaigns. When you tie conversion rates and ROI to referring sources, you can make informed decisions on which campaigns to invest more time and money in, and which to axe.

2. Referring keywords and conversions. Like referring sites, you can track which keywords are driving traffic, and even segment your organic (free) search traffic from paid search. When you have high converting, organic keywords that don’t send much traffic, you may want to focus your SEO efforts on raising your rank. Or, if you’re spending a lot of money on a keyword that doesn’t convert, you should look to improve your landing page, spend less on your keyword or “kill” it completely.

3. Measure engagement with your content. Most analytics tools offer a feature that allows you to “see” where customers are clicking. Where do customers typically click from your home page? From each category page? From your Help section? Do they click on your featured products, or go straight to the search box? Bounce rate (the percentage of visitors who enter your site and leave within 5-10 seconds) is another indication of engagement. View your top entrance pages and observe each page’s bounce rate. Very high bounce rate pages should be looked at more carefully—are they delivering the offers and products that people expect from the keywords that referred the visits?

4. Measure split-test results. If you’re doing A/B or multivariate testing on your design, copy, offers or even color and size of your add-to-cart button, you can’t measure results without analytics!

5. Funnel analysis. Why do customers abandon the cart before completing a purchase? Could it be a glitch in your checkout process? Analyzing your funnel reports can catch problems that are killing your conversions.

Interested in learning more? A great resource for non-techie e-marketers is Web Analytics: An Hour a Day by Avinash Kaushik. It covers what analytics is, which metrics are important (and which are not important at all), how to choose a tool, how to find a good analyst, and how to turn data into information that can help make better business decisions. Avinash reently joined Elastic Path Software for a webinar 3 Things to Die For: Web Analytics Unleashed. This free, e-commerce focused session is available on replay, and previous e-commerce webinars are available here.

Linda Bustos is an e-commerce consultant for Elastic Path Software and blogs daily here.

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Posted in Marketer, Online, Retailer, Web Analytics | 2 Comments »

Shopping Carts, Gateways & Payment Processors: Anatomy of an Online Purchase

Friday, August 15th, 2008

ekroll.jpg Years ago, an exchange of cash was all it took for a customer to make a purchase from a merchant. How things have changed! Today, most businesses offer their products or services on the Internet—clearly, they can’t be restricted to cash-on-delivery practices anymore. E-commerce has emerged as a lucrative channel for merchants to boost sales and grow their bottom lines. Many consumers have Internet access both at work and at home, and browsing an online catalog can be faster than browsing the aisles of a physical store. What’s more, customers get the added convenience of shopping 24 hours a day, seven days a week.

Merchants should understand the value of operating in multiple channels. For those who haven’t yet incorporated e-commerce into their business but want to, there is much to learn. They must educate themselves on how payment processing works in order to best accommodate their online shoppers and serve the needs of their business. Though paying for an online purchase takes just a few seconds, it involves a complex chain reaction of behind-the-scenes processes.

Merchants can increase revenues and reach more customers by offering an efficient, successful e-commerce solution. This article examines what must be in place in order to complete a transaction that is both secure and offers superior customer service.

What Makes an E-commerce Solution Possible?
In addition to the range of software and hardware that companies use to support the sale of products and services online, there are three vital components that make online shopping possible: the shopping cart, payment gateway and payment processor. Each is critical to ensuring successful implementation of e-commerce functionality.

• Shopping cart. The shopping cart acts quite literally as a virtual shopping basket. It holds the items customers select from a website until they are ready to proceed to the checkout stage, where their credit card information will be processed. The shopping cart:
o Keeps track of items until they are purchased;
o Automatically totals the amount of a customer’s order, including shipping and tax; and
o Allows shoppers to securely enter address and credit card information.

• Payment gateway. In order to accept credit cards through the Internet, a payment gateway is critical to transport the credit card information from the shopping cart to the payment processor once the consumer clicks the “Buy” button. In most cases, this transaction happens almost instantaneously. The payment gateway receives encrypted transactions from the merchant’s shopping cart. An encrypted transaction simply means that credit card numbers can’t be read by people who are not supposed to read those numbers. Authentication is then provided and the decrypted payment information is transmitted for authorization. The payment gateway:
o Fulfills the same function as a point-of-sale (card swipe) terminal at a physical retail location; and
o Takes information provided through a shopping cart and transmits it electronically and securely to a payment processor to be routed for authorization of payment.

• Payment processor. The payment processor transmits a customer’s credit card information via the Internet to the merchant bank for authorization. It also sends data back to the merchant’s bank to approve payment or the transfer of funds. Specifically, a payment processor:
o Acts as a link from the merchant to the acquiring bank or merchant bank;
o Receives information from the merchant through the payment gateway and packages the information for delivery to the acquirer, ensuring that all necessary transactional data is present and valid; and
o Later transmits information back from the acquirer for delivery to the merchant to settle the transaction.

With the shopping cart, payment gateway and payment processor in place, merchants have all they need to offer convenient e-commerce solutions that deliver superior security and service. With a little research and education, merchants can find the best providers to accommodate their business needs and those of their consumers. It just makes sense—with online shopping projected to account for $116 billion, or 5 percent of all retail sales this year—e-commerce provides merchants an opportunity to make more money and succeed in an increasingly competitive marketplace.

Erin Kroll is the PR/VAR marketing coordinator for e-onlinedata.

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Posted in Marketer, Mobile, Online, Payment Processing, Retailer, Support Services | 3 Comments »

Merchant Processing 101

Monday, July 21st, 2008

ekroll.jpg Thinking about adding electronic processing capabilities?
There’s a lot you should know.

There are countless reasons why a business should add credit card and electronic payment processing capabilities: transactional speed, convenience, increased customer satisfaction, improved cash flow, views into sales data and more. But perhaps the most important consideration is the sheer volume of consumers who use non-cash methods as their primary form of payment.

In 2005, credit card and electronic transactions accounted for an overwhelming $3.4 trillion of total U.S. payments, according to The Nilson Report. That’s 50 percent of all transactions nationwide for that year. More recently, Visa USA estimated that nearly 60 percent of U.S. consumers aged 18 to 25 use cards as their primary payment method.

So while the reasons for adding payment processing are clear, understanding all your options and which are right for your business is far more complex. This article will give you the information you need to get started in setting up payment capabilities for your business, and it will provide some of the essential details you need to consider when selecting a provider.

How Payment Processing Works
Some form of the modern credit card has been in use since the late 19th century, mostly as department store charge cards representing lines of credit. Things have changed and today, the step a merchant needs to take in order to accept credit card payments is to establish a merchant account with a bank or third-party payment provider. Once your account is live, the transaction process generally works as follows:

1. A customer presents a credit card for payment.

2. By swiping the credit card through an electronic point-of-sale (POS) transaction terminal, typically provided by the bank or payment provider, an electronic request is submitted to the processing network for authorization.

3. The processing network receives your electronic request and determines if the cardholder’s account is valid and if the funds are available. If so, a response called an “authorization code” is transmitted, guaranteeing your access to the funds.

4. A receipt is then printed for the customer using the POS terminal or your computer. The customer then signs the receipt and, for their part, the transaction is complete.

5. At the end of the business day, a merchant will electronically submit a final request to the processing network to “capture the funds” for all authorized transactions in a given day. This process is referred to as settlement. Once approved, a response is generated to your electronic terminal or computer.

6. From there, the funds associated with the batch you settled are deposited electronically into your business bank account, usually within 48 to 72 hours. Typically, the rate and any fees paid to your merchant account provider are deducted from your account at the end of the month.

7. At the end of the month, your merchant account provider will send a statement to you, detailing the credit card activity for the month and the associated fees you’ve been charged.

This process describes what happens in a traditional retail, or “brick and mortar” sales environment. For Internet and e-commerce merchants, the set-up process requires a few additional steps. (more…)

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Posted in Electronic Retailer, Online, Payment Processing, Support Services | 5 Comments »

French Court Erects New Barriers to E-commerce

Thursday, July 3rd, 2008

congressional-hearing-2.jpg As advocates for choice, competition and innovation on the Net, we’re troubled to read about a ludicrous court ruling against online commerce. The French Tribunal de Commerce in Paris ordered eBay to pay 39 million Euros to French luxury goods maker LVMH. Mike Masnick of Techdirt shares our outrage here.

Judging by media coverage of this ruling, one would think it’s all about preventing sales of counterfeit goods. But it’s actually much farther-reaching than that, in a way that’s incredibly damaging to the growth of e-commerce, small business and consumer choice in Europe. The French Court ruled that eBay must halt the sale of legitimate, genuine LVMH perfumes on the eBay site. Essentially, the Court held that a big business like LVMH could stop customers and owners of its products from re-selling them to someone else. This is blatant discrimination by French authorities against the e-commerce channel. eBay is appealing the ruling (read their take on the ruling on their company blog, eBay Ink). The outcome of this appeal could impact the future of e-commerce around the world.

Imagine if efficient online marketplaces like eBay, Overstock, Amazon and others had to pull the plug on entire categories of items, preventing perfectly legal sales of authentic items. Millions of shoppers use these sites to find great deals on things they want or need. During tough economic times, many people look to the web to help stretch a household budget. And millions of people around the world use the web as a tool for running their small businesses. And if you think that this is just another example of “France being France,” think again. This backward, anti-competitive perspective may be coming to a court near you. Any day now, the Federal District Court in New York will rule on Tiffany’s lawsuit against eBay. Again, Tiffany is crying counterfeits, and trotting out dubious data on online sales. But we believe Tiffany’s real interest here is to shut down any distribution of Tiffany products that isn’t completely controlled by Tiffany. Got a gift of earrings that just aren’t your style? If the New York court rules the wrong way, you may no longer have the option of selling them online.

Of course, counterfeits are a scourge to any marketplace. They undermine brand integrity and cheat buyers. And counterfeits have been a problem long before the Internet existed. eBay and others have worked hard to stem the sale of fake items. But go to any urban sidewalk, bazaar or back alley, and you’ll likely find the counterfeit trade still thriving. So when manufacturers and retailers cry “counterfeit” and point fingers at the e-commerce channel, their true motives are exposed. They’re calling for competition prevention—not consumer protection. And when courts agree with them, we all lose.

Steve DelBianco is executive director of NetChoice.

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Posted in Europe, Government Affairs, Marketer, Online, Retailer | 1 Comment »

Optimizing the Customer Interaction Experience

Tuesday, May 13th, 2008

rolf-elmer.jpg There’s no denying that the main objective for any e-commerce sales or retail marketing executive is to maximize the total value of visitor traffic on their site, simply put— turning web browsers into buyers and clicks into cash. Search is certainly leveling the playing field as well, so how do companies stand out from the crowd? And why are some sites still failing to deliver compelling and relevant content to their customer base?

In today’s saturated marketplace, retailers can no longer rely on the traditional marketing techniques and media vehicles to manage customer interaction and drive home sales. In order to achieve greater web interaction optimization, e-commerce and retail sites must recognize the inherent value of social behavioral merchandising and effectively increase the relevance of communications by automatically promoting the most relevant products to each visitor, thereby maximizing conversion rates and average order values.

By making websites more customer-centric via these “recommendation engines,” retailers can essentially optimize customer interaction through improved content and messaging based on a customer’s specific needs and behavioral patterns.

We all know who Amazon.com is. Besides the millions of SKUs at Amazon.com, the site is easy to use and “steers” browsers in the right direction when they need help (recommendations, user reviews, etc.). The addition of recommendations from other customers can build a sense of trust and community between new and returning customers—and probably better than any 17-year old working the floor at Border’s Books.

Given the wide variety of tools available in the market, online retailers must familiarize themselves with the different points of customer contact and approaches towards reaching interaction optimization. The Customer Interaction Cycle, shown below, depicts the many different points—from initial landing page through transaction—where collective intelligence can be applied to maximize value.

lifecycle3.jpg

Rolf Elmer is CEO of Avail Intelligence

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Posted in Advertising, Branding, Marketer, Mobile, Online, Retailer, Social Networks, Web Analytics | 2 Comments »

“Hand Cuffs” Quova Responds!

Wednesday, February 20th, 2008

quova.gif Pat- Thank you for your post. We at Quova enjoyed reading it and were glad to see that you appreciated the spirit behind our Valentine’s Day package. While the gift was clearly the attention-grabber, we did have a serious intent—to demonstrate the very real threat of card not present fraud, a critical security issue for online retailers. After all, online fraudsters worldwide weren’t joking around when they unlawfully carried off $3.1 billion in goods from e-commerce sites in 2006.

But there was another clue in our mailer as well. Pinpointing the physical origination point of an order on the Internet and comparing it to the bill-to and ship-to address is one of the most effective tools in combating online fraud.

Many online retailers already use some type of fraud risk scoring method. They may look at whether the buyer is a new or repeat customer, the nature of the purchase, especially a very expensive one, the type of shipping request, credit card security codes and more. But one item frequently overlooked is reviewing a customer’s location when they place an order online. By adding just this one step of comparing the customer’s billing address to his IP address location to the transaction, one Quova e-commerce customer was able to detect an additional 70 percent of his online fraud.

Think about it—nearly every business decision is affected by geography: language, currency, shipping, taxes, licenses, government regulations and more. When a customer walks into a brick-and-mortar store you can tell a number of things about them right away: age, gender, what they’re shopping for, whether they’re return customers. But when a customer visits your retail website, you know exactly none of these things…where they are, what they want, what brought them in, or how likely they are to be crooks. It’s an anonymous process. Knowing the geographic location of your web visitor can provide the same sort of data for an online transaction. So the fact that Tom isn’t actually based in your office was an indicator that something may have been amiss with the package.

Quova does this with a technology called IP Geolocation, which can tell you where your online customers are and how they connect to the Internet as soon as they visit your site (through their IP address). There’s no need to ask for further information or store cookies in their browsers. The service is offered on a subscription model and is easily deployed with an API to your web application.

So while we see we sparked some humorous discussion around your office last Thursday, we also hope that we spark some more meaningful discussion among your readers about the best practices in geolocation technology, and the role it can play as part of a comprehensive online fraud prevention strategy for retailers.

Kerry Langstaff is vice president of marketing for Quova, Inc.

Do you think Quova’s marketing tactic was successful?

As multichannel retailers, how do you help secure your customer’s data?

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Posted in Electronic Retailer, Government Affairs, Marketer, Online, Payment Processing | 2 Comments »

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