Posts Tagged ‘ecommerce’

Quick ways to improve your ecommerce store

Friday, December 16th, 2011

Most of us have a lot of experience using online stores, if you combine that knowledge by listening to your online customer’s feedback or watching them use your online store there are a few themes that start to emerge.

If you are looking for quick wins to make your ecommerce store more effective try focusing on the following.

Improve product information and product images

It is surprising how often product information does not have enough detail or includes low quality product images. This applies to both large and small retailers, I was very frustrated to not to be able to find ingredient information on a very large retailer’s website recently.

If you have a complicated product or a product that requires a 360 degree view then a video can be the best way to showcase the product attributes.

Cover all the payment methods bases

Often I get all the way to the end of a checkout process only to find that a site only offers a debit or credit card payment option.  If I am using my phone or ipad to shop online then I might not have my payment card with me and by including  PayPal/ stored credit card info as a payment option can make difference between a sale or a customer leaving your store.

Where possible give the customer the option to store their payment information for their next order.  There are many payment gateways who provide this service so that you do not need to invest in the infrastructure to store credit card information on your own servers.

Checkout process

Keep the number of checkout steps to a minium and where possible try to reuse information e.g. don’t ask customers to enter their billing and delivery address, assume they are the same and then give them the option to change it.

Ask for the bare minimum and do everything you can to get them to complete the transaction. Also don’t force customers to open an account but you should offer it as an option.

Search

This is perhaps the most important part of your site if you have a lot of products.  Search results are perhaps the most aggravating area to a customer if you do not get it right.  You need to invest a lot of time and effort analysing your search queries, getting feedback from your customers and investing in the best search technology.

Amazon have recognised the huge importance of search and have even spun off a product search product called A9.  In many of the large high transaction sites I have deployed the most widely used is Adobe Merchandising (formerly Mercado) which among other things lets you create the rules engine for product searches.

Taxonomy

If you are John Lewis, Tesco.com or Amazon.co.uk how do you spilt your products down into categories? Should a fridge go into electrical appliances or kitchen?  Your categories and subcategories require a lot of thought. I have seen a couple of good presentations on ecommerce taxonomy recently given by former librarians, so leverage the experience of experts in categorising.

Contact info

Make your contact information available and accessible and it will create credibility in the mind of the customer. Also for those customers that do contact you by phone or instant chat it can provide a valuable source of feedback on your shopping experience.

Postage rates

Make sure you offer a range of postage service and do not charge extortionate rates.

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The most important ecommerce success metrics

Friday, December 16th, 2011

Investment in ecommerce is one area that does not seem to have been affected by the downturn in the economy.  Many companies are investing their reduced budgets online as it can be one of the best ways to increase sales with comparatively little investment.

I have built many ecommerce sites from the ground up over the years, I have worked with many ecommerce software packages and I have experienced ecommerce from a user’s perspective.  In my view whenever a company makes an investment in ecommerce or makes changes to their online store there are only a few key metrics that need to be tracked.

Number of new visitors

The number of new visitors shows how well your marketing/ advertising/ multi-channel approach is working.  Attracting new visitors to your site is the key is growing your online revenue.

Number of repeat visitors

Not everyone buys on the first visit, very often customers will come to your site, store items in their basket and come back another time to purchase.  You will also have a number of people who become repeat customers and order regularly.

Conversion rate

The number of people visiting your site is of little value unless they actually make a purchase.  The higher the conversion rate the better. It is also useful to track the conversion rates of new and repeat visitors separately to get a clearer picture of your conversions.

Checkout abandonment rates

Once a customer has decided to buy then the checkout process is the key to your conversion rate. You need to have a clear view of each of your checkout steps and the abandonment rates at each stage (i.e. the number of people that fail to move the the next step). Using this information you can then try to improve/ optimise the stages with the largest abandonment rates.

Average order value

While your target average order value will vary greatly based on your industry, ideally you would like to see a year on year increase.  Many companies will have an average order value that they need to achieve in order for their online operation to be successful.  I attended a job interview with Tesco a few years ago and as part of my assessment they asked me to estimate the breakeven order value for Tesco.com. My rough calculation showed it to be around £40.

Orders per customer

If your online store has a good CVP and has good usability you would expect to see that your customers make many repeat orders. This obviously depends on the industry and the product, but for the majority of online stores repeat orders have the highest profit as the average customer acquisition costs are lower.

Summary

Of course there are many, many more metrics that you can track but in my view these are the key ones.  Even small changes in any of these metrics can have a big impact on your ecommerce bottom line.

After more than 10 years of growth e-commerce still only accounts for about 8% of total commerce in the US. Clearly, we have a long way to go in moving more commerce online so there is still a lot to be gained from investing your corporate budget in ecommerce.

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Integrating Payments Into Your Website

Monday, July 5th, 2010

In my last post I outlined the basics to taking payments online and how to choose a payment provider. This time we look at what you need to do once you have chosen your payment provider the ways you will integrate payments into your website.

1. Integration options

I have integrated most of the major payment engines and they all work differently but in principle there are two main methods:

Form Integration

This is the way that most websites integrate with a payment provider and is usually the only option if you are using eCommerce software. The basic premise is that you process the order on your site all the way up to the point the customer pays. At that point your customer is redirected to your payment provider’s secure payment page where they enter their credit card. The customer is then directed back to your website once they have completed their payment.

Pros:

  • Very simple to do (most eCommerce software will do this for you)
  • You do not need to store or process credit cards
  • Customers may feel more secure as they are on a separate secure site

Cons:

  • It can give a less professional or smaller shop feel
  • Less design control over the checkout process

Integrated

In this method you take payments on your own site and pass them securely to your payment provider. The customer never leaves your site.

Pros:

  • Perceived as more professional by customers
  • A more streamlined checkout process
  • More control over the design and workflow of the checkout

Cons:

  • You will need to be PCI compliant (see below)
  • You will need to have a secure method of storing credit cards
  • You will need a SSL certificate (secure sockets layer, this is when you have a lock icon in your browser)

2. What about PCI compliance?

If you take payments online (or offline for that matter) then you need to be aware of PCI compliance. The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment. Which translates to if you process payment cards you need to make sure you keep the customer’s card information safe during the process.

There are different levels of compliance depending on how many transactions you process per year. Most merchants will fall into the lowest category which is level 4 (fewer than 20,000 transactions per year) and for this there is a self-certification questionnaire that needs to be filled in and the possibility of a scan of your site to determine any vulnerabilities. The higher the level the more work (and potentially an audit) there is to comply.

The key to remember is that if you take credit card payments in any form you need to be compliant. If you want to learn more this site is a great place to start: http://www.pcicomplianceguide.org/pcifaqs.php

3. Should I use 3D secure?

First of all if you do not know what 3D secure is. Verified by Visa and Mastercard Securecode helps to customer’s cards against unauthorised use when they shop online by requiring them to enter a personal password each time they buy. The customer only need to register once to create a password for each credit card they own.

There is no right or wrong answer to whether you should use 3D secure or not. Personally I like it as it means lower per transaction costs and less fraud. I think eventually that it will be mandatory for all online transactions so you may as well use it sooner rather than later.

Pros:

  • Less fraud (which means less costly chargebacks)
  • Lower transaction costs with your payment provider
  • Makes the buyer feel more secure

Cons:

  • It is an extra step for the customer to complete which increases the risk of them abandoning their purchase
  • It is another password for them to remember (or perhaps forget)

That is the quick introduction to payments online, if you have any questions please add them in the comments.

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Taking Payments Online For eCommerce

Wednesday, June 16th, 2010

Continuing with the eCommerce theme I thought I would review the various options for taking payments online. For the people who have never taken payments online, first an introduction.

1. What do you need to take payments online?

If you are new to taking payments this actually is more complicated than you might think. To accept online payments you need:

  • A payment processing service (PSP) or ‘payment gateway’ – this service collects and sends payment details to the banking network.
  • An internet merchant account (IMA) – All the payments you receive are paid into your merchant account before being transferred to another business account.
  • A personal or business bank account where the funds from the IMA are transferred to.

Some providers provide just a PSP service so you need to source a separate IMA but I am going to concentrate the rest of the article on those providers that supply both services together.

2. How do you choose a payment provider?

There are lots of players in the market and a lot of choice so what sorts of things should you be looking for? My personal criteria for selection is the following:

  1. Reliability – how reliable is the service, PayPay has suffered in the past from a bad reliability record and if your payment provider is down then you cannot take payments. If you are a high transaction business this can cost you a lot of money.
  2. Integration options -  what are the different options to integrate payment onto your site, can you take payments on your own website or do you have to redirect to the payment providers site?
  3. Support – how good are their support teams, what hours are they available, ecommerce is a 24/7 business.
  4. Fees – what is their charging structure, do they offer volume discounts for large numbers of transactions? Fees vary a lot and a few % per transaction can affect your margins.
  5. Perceived quality to the customer – if you use a well respected brand for payments this perceived quality will help put your customer’s minds at ease.
  6. Fraud protection – what steps, procedures and tools do they offer to reduce fraudulent transactions?
  7. How quickly funds are released – some providers hold funds for as long as 30 days which can hurt your cashflow.
  8. Reporting – how easy is it to run reports for your business reporting?
  9. Ease of use – how easy is it to issue refunds or check charge backs?

Other less important criteria might be:

  • Can you take payments over the phone?
  • Can you take multiple currencies?
  • How much do they charge for fraudulent transactions or charge backs?
  • Do they accept recurring payments (repeat transactions for subscription sites)?
  • Do they accept PayPal payments? The large payment providers now accept PayPal as well as credit cards.
  • How customisable are the payment pages?

3. What will it cost me? Who are the main players?

The total cost of accepting payments is the combination of payment processing charges (per transaction) and the internet merchant account (usually a fixed monthly fee). There will also be one off set-up costs and addons for extra fraud protection etc.

The per transaction costs vary quite a lot and depending on the volume of your business can be negotiated.

A lot of the best payment providers only cater to US business in the UK the the main players are:

  • SagePay – formerly Protx and now owned by the accounting software company Sage. They offer a range of integration options at no extra charge, and they are personally my choice of payment provider.
    • £20 per month
    • Per transaction costs of 2.5% for credit cards and 40p for debit cards
    • No set up fees
    • No minimum contract term
  • RBS WorldPay - recently purchased by RBS and offer a superb, reliable service with great technical support. They are also a great choice if you do not have a lot of trading history and need to be up and running quickly.The downside for me is that the payment pages cannot be customised as much as I would like.
    • £15 per month
    • 3.35% per transaction + 15p per transaction
    • £75 set up fee
  • PayPal – have a long history taking payments and a brand that consumers trust. In my experience they are not as reliable as other services, testing your service is harder than it should be and the consumer experience is not as good as the previous choices.
    • £20 per month (or they have a free option if you do not want to take payments on your site)
    • Transaction charges are 1.4% – 3.4% plus 20p, depending on sales volume
    • No set up fees

The high street banks also have solutions, Barclays have ePDQ and HSBC have a solution (which when I last used it was very cumbersome to integrate).

So that is the quick overview to taking payments online. Next week I will be going through the various ways to integrate payments into your site once you have chosen a provider and what that means for your business.

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Why Is Ecommerce Unsexy?

Wednesday, June 2nd, 2010

I am working on a very exciting online shop at the moment and I am totally fascinated by the psychology, architecture and operations that surround an online shop. The premise that if you make positive changes to your site you will be almost immediately returned with increased sales.

I have worked on lots of ecommerce sites in my career but even if you have not, ecommerce is everywhere and most people will have made a purchase online.

It got me thinking that I do not hear people talk about ecommerce, people do not seem to get excited and innovate in this area. A lot of people want to build SAAS apps or apps that have no income at all, where as an online shop seems like a much easier business model if you are retail minded and can find a suitable niche.

Over the next few months I am going to be writing about the lessons I learn running an online shop.

If you can think of a great idea for an online shop let me know I would love to hear about them.

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