Market research professionals, your colleagues and 15 minutes spent at any party all confirm the notion that shoppers are spending more time on the Web – from brand identification and differentiation to feature and price comparison, and often all the way to purchase. Whether it’s the breadth of information, convenience, ease of comparison shopping, or the potential for discounts, the Internet has emerged as a significant point of initiation in the retail shopping continuum.
According for Forrester Research, no activity occupies more of shoppers’ time online than search. Search engines play a pivotal role in the shopping process, providing a laundry list of options; and retail websites have emerged as a leading source for a bevy of product details. As site search on retail websites becomes more robust, it plays an increasing and complementary role in the way shoppers make informed product selection decisions.
Internet retailers are forced to be the savviest and most demanding online marketers due to the commoditized nature of their products, the low profit margins their sales produce, the high volume of transactions they must generate to be successful, and the intensity of competition of their marketplace. While this survey looks at shopper behavior for consumer electronics and computer products, the same trends are at play across all segments of the retail marketplace.
As innovators and thought leaders in the search industry, Searchandise Commerce and iProspect wanted to more closely analyze the role of various search influences, and better understand how search engines and retail sites work together to deliver the most complete shopper search experience. We wanted to better understand if the basic tenets of search engine marketing – the value of premium positions within search results – held true for retail site search as well. In March 2010, we commissioned comScore to delve into the role that search and site search position play in the shopping continuum – from research to purchase, online and offline.
The research yielded some interesting behavior on the part of shoppers, along with some real lessons for retailers and product marketers on how to not only better capture the interest and attention of those shoppers, but also provide them with a better online shopping experience. We hope the results, observations and recommendations put forth in this study will be useful as you plan your online retail marketing and merchandising strategy.
Key Findings: Path to Purchase
Two-thirds of shoppers begin the shopping process online; one in five starting at a retail site (the most frequent starting point among all retail shoppers); one in 10 starting at a physical store. Close behind retail websites as a starting point for shoppers are search engines, which are themselves a significant driver of shoppers to retail websites (as are manufacturer websites). Surprisingly, only a negligible percentage starts its search by consulting a blog or a social networking site.
These various sources fulfill very specific needs:
• Retail sites: price options, brands, promotions/sales, customer reviews
• Search engines: customer reviews, expert reviews, recommendations
• Manufacturer websites: product specifications, guarantees/warranties, customer and technical support
• Physical stores: brand options, touch-and-feel
Of great interest is the chronology of the various steps taken by a shopper during the shopping continuum. Shoppers who begin their search on retail sites (19%) either purchase directly on the retail site (6%) or navigate to a manufacturer site for further details (27%), then either visit a search engine or physical store. Of this group, nearly half buy in the physical store, while 40% transact online. Thirty five percent more shoppers actually visit retail websites over search engine as one of the first steps in their buying process.
Of the shoppers who started the process by visiting a search engine (18%), 37% move on to a retail site as their next step. Nearly half of the CE shoppers end up purchasing on the retail site, as do one-third of the computer buyers.
Of the 13% that begin the shopping process on a manufacturer website, 39% move on to the retail site, again with nearly half purchasing at the retail site. Thirty four percent visit either a search engine or a physical store after visiting the retail site.
Retail sites and search engines are consistently the first or second stop in the shopping continuum with the end purchase location being split fairly evenly between the online and offline retail channel. While the process starts online, both groups demonstrate a propensity to convert in-store (47%).
Key Findings: Site Search Position
The study participants were asked a series of questions about their impressions of various retail sites. The findings drawn about retail sites from their responses are clear:
• Pop-ups or advertising should not be displayed
• Pricing and product information should be clearly listed
• Product comparison tools should be provided
Comparing product information and price is the most frequent activity. Shoppers are twice as likely to use the site search box to find additional product category, brand or model information as to browse the initial landing page.
In both the qualitative and quantitative phases of this study, shoppers identified their penchant for clicking on the first results page. Ninety-four percent of the shoppers click between 1 and ten products, and from there, they look for price, key product features and preferred brands as key differentiators.
Number of Clicks
After using the search box, the majority of shoppers click on items within the first page of results.
Products appearing in the top section of site search results, or within the first 10 – 15 results after using the site search box carry additional weight for shoppers. Those products were identified by shoppers as best meeting their needs, being of highest quality, and being those that are most relevant to their search.
Implications & Recommendations for Marketers
Research Online – Buy Offline
With two-thirds of retail shoppers beginning their process online, and half still making their purchases in a physical store, online and offline marketers are most assuredly under-valuing the contribution of channels such as search engines, or overlooking the opportunity represented by site search on retail websites in particular to the volume of sales taking place in-store. The amount of human and capital resources being devoted to driving the performance of these online channels may not be based on the totality of their contribution to the bottom line, but solely on the revenue that is being generated through online purchases. As a result, many online and offline marketers are leaving significant revenue on the table – revenue that could be maximized by obtaining a better understanding of online marketing’s contribution to offline sales, and a realignment of online budgets to reflect that actual contribution.
Retailers should create, test and implement processes for identifying the contribution of their online channels to in-store purchases. Implementation of such programs can shed significant light on the relative impact of online channels. Those channels are likely under-valued and under-funded – and deeper analysis will enable marketing organizations to optimize specific channel budgets within the overall marketing mix.
Use of Site Search Versus Browsing
With twice as many shoppers using retailers’ site search rather than browsing the initial landing page for the products they seek, online marketers may at times be forcing shoppers to take more steps to achieve the intent of their website visit than necessary or desirable. This is particularly true if the shopper is arriving from a search engine where a search was launched for a particular make, model, or brand – and yet, the landing page to which the shopper is delivered on the retail website does not provide product information at that degree of specificity. And it goes without saying that with online marketing, the more steps or clicks required of a shopper to achieve their desired goal – the less likely that goal (purchase) will be achieved.
One method of keeping shoppers engaged, in addition to delivering accurate and informative landing pages, is to present shopper with the most relevant results on the first page of site search results. With the majority of shoppers clicking between one and 10 products from the first page, search position becomes more important as marketers look to engage the most active buyers and leverage their perception that products on the first page are most relevant. Much like the in-store merchandising practice of securing shelf space at eye-level or on an end-cap display, marketers should strive to obtain first page, ideally in the top section in site search. The better the position, the better the results.
Premium placement is defined as those areas where the shopper looks first, in this case, the first page of site search results. Shoppers perceive those premium positions as best meeting their needs, offering high quality and being most relevant to their search. This result is consistent with previous research by Jupiter Research (now part of Forrester Research) that shows 70% of shoppers click on at least one of the top 10 products in a site search listing. As such, marketers and merchandisers should fully capitalize on that perception.
Retailers can control all of the elements, or relevancy factors, that designate how each site search or browse result is rendered, and it’s often a complex algorithm of margin, price, inventory, popularity or velocity. Defining and refining that algorithm will deliver the most relevant results that will keep shoppers engaged on your site. Previous research performed by iProspect, netted a similar result on the search engines – nearly 40% of Internet users believe the companies appearing at the top of the search results are the leading brands in their respective industry categories. So in this regard, users’ perceptions of site search results are very much in line with their perceptions of search engine results. Retail marketers and merchandisers are advised to tweak each lever within their site search platform to test various combinations of relevancy factors and criteria that determine the sort order of their search results.
It’s as if you’ve been handed the mysterious search engine algorithm and can modify it as you like. But, as with the search engines, the relevancy of site search to the shopper’s query is paramount, as it is still the most important criteria in meeting users’ needs. Retail marketers and merchandisers should take great care to maintain the high degree of relevancy of the top 3-5 products on the site search results page, while other criteria used to maximize profits, reduce inventory, or achieve manufacturer incentives be worked into the mix of site search results.
Search Engines and Retail Websites: The One-Two Punch
This study confirms that search engines and retail websites are the first or second stop in over half of the shopping processes evaluated. Search engines are the most frequent driver of traffic to retail websites, and are the most frequently used tool for finding customer reviews, expert reviews/ratings, and third party product recommendations. Search engines also serve a mission critical role at a macro level that site search performs at a micro level – to return the search results that are most relevant to the shopper’s intent, and to display information within the content of the search listing that reflects not only relevancy, but also compels the shopper to click and seek more information. Not to overstate its importance, but this relevancy can easily be the difference between not only online sales success or failure, but in-store success or failure as well.
Retail marketers are advised to work diligently to ensure that their websites appear in the organic and paid search results for all the specific brands, makes, models, features and functionalities associated with the products they sell. Search marketers should craft landing pages to meet the degree of specificity about brands, makes, models, features and functionalities used in the shopper’s search.
Finally, marketers must remember the first rule of search marketing – that “content is king.” Multiple and enlargeable product images or videos, highly detailed and clear product descriptions, easy-to-use product comparison tools, user reviews and expert product ratings – any enhancements to website content will help the website rank highly in the search results, help answer the “tough questions” that shoppers seek to have answered prior to making a purchase, maximize the time spent on their website, and maximize the likelihood that the online shopper will buy – be it online or offline.
While search engines are a key driver to retail websites, the key for retailers and product marketers is to ensure continued engagement by active shoppers. For retail marketers, providing detailed product pages, clear price, feature and function details, and providing the most relevant results on the first page of search results will yield optimal results. Shoppers prefer to see minimal advertising or pop-ups during these initial searches, looking only for the most relevant results. For product marketers, the implications are equally clear: engaging active shoppers is contingent on securing premium placement within that first page or top section. Innovative solutions that make this never-before-available real estate open to them can be integral to a successful channel relationship.