X-step guide to e-commerce (part 1)

1/11/2006 by paul

This is the first in a series of articles I'll be writing detailing the Boxed Search Services X-Step Guide to E-Commerce. Why X? Well, I tried to limit the number of steps to 6 or 10, but there really is no end to the number of things you can do to continually improve your ecommerce website, and when you run out of ideas, it's normally time to start again, anyway!

Some of these steps will only be relevant if you're at a particular stage of development with your ecommerce website, but I'd hope even the most seasoned online seller will find something of value in all of them. Anyway, let's find out...

Introduction to the 'funnel' effect

Most websites can be viewed as a funnel with lots of people hitting the top levels of the site (homepage, recent news, product information, etc) and gradually dropping off as they progress deeper into the site until the final few make it to the checkout/signup/subscription page you intended. Let's take PaulsCDs.com* as an example and let's assume all of the marketing for this website points people to the homepage. Customers will arrive at the site and, using navigation or search, will end up at the details of the CD they're interested in purchasing.

Even this early on in the conversion process, however, some visitors will have been lost. Some will have come to the wrong site; some will be looking for different types of CDs; and for all manner of other reasons the site's losing visitors from the moment they arrive.

The diagram to the left shows this 'funnel' effect. Customers arrive at the homepage, use navigation or search to find the CD(s) they're interested in and might browse other CDs whilst there. Eventually [hopefully] they add something to the basket and proceed to the checkout. In this example, for every 100 visitors, 2 have actually made a purchase; in other words, the site has a basic conversion rate of 2%. This is a very simplistic view of site conversion, but illustrates the basic concept (more on calculating conversion rates another time).

Location, location, location

Traditional retail is largely based on shopping 'destinations'. By this, I mean that people visit particular shops regularly, like a supermarket. Having a shop close to this means that the supermarket customers are regularly exposed to your shop, and close to it. Offering dry cleaning or photo printing services 'whilst you shop' in this scenario is great business synergy, but this kind of 'destination shopping' is not really available online. I guess you could argue that Internet portals such as Yahoo!7 and nineMSN are the online equivalent, but, generally speaking, people aren't going to stumble across your website accidentally, and neither would you want them to as you're likely to be paying for that traffic.

Targeting, targeting, targeting

Successful ecommerce is all about maximising conversion, but also doing so with the maximum number of visitors, and this is often understated - a conversion rate of 100% isn't so good with only 1 visitor! Targeting high-quality visitors to your site is the online equivalent of location in bricks-and-mortar retail. Advertising music to iPod users; selling photos to photographers; or offering accountancy services to new business start-ups; these are all examples of highly-qualified visitors that will increase the conversion rate of your website and opportunities to promote your site in this was are extremely valuable.

I've touched on a lot of subjects very briefly above. In the coming articles, I'll be discussing who you should be attracting to your site and how.

If you'd like to receive the next update by email, subscribe here.

* This is a ficticious website

Keywords :  guide to e-commerce, ecommerce, how-to, guide, funnel effect, conversion rate, customer targeting,