Retail Web Analytics – What’s the hype all about? [Retail Web Analytics]

The Online Retail indus­try is a $135 bil­lion behe­moth that will grow to $234 bil­lion by 2014 in the US. E-commerce rep­re­sents 3.7% of all retail sales in the US and is expected to increase to 5.5% in 2014. It is one of the few seg­ments that enjoyed a pos­i­tive growth rate in the year 2009. (U.S. Cen­sus Bureau, William Blair and Com­pany estimates)

I will be exam­in­ing the role that Web Ana­lyt­ics plays in the retail indus­try in gen­eral and for retail web­sites specif­i­cally. We’ll take a look at what dif­fer­en­ti­ates online retail sites from other web­sites (Yes! They are different!).

We’ll start, how­ever, with 3 sim­ple ques­tions that when answered hon­estly will help you level set on your organization’s adop­tion of web ana­lyt­ics.
1. Do you have the exec­u­tive spon­sor­ship and resources nec­es­sary to sup­port the ana­lyt­i­cal needs of your orga­ni­za­tion?
2. Do you have the right cus­tomized web ana­lyt­ics tools and peo­ple to help you per­form analy­sis and iden­tify prob­lems spe­cific to your prod­uct offer­ing, shop­ping expe­ri­ence and check­out flow?
3. Has ana­lyt­ics been an inte­gral and strate­gic part of the plan­ning and tag­ging process or just an afterthought?

Site Objec­tives

There are obvi­ous dis­tinc­tions between sites that have dif­fer­ent objec­tives. A site sell­ing prod­ucts is dif­fer­ent than a site show­ing videos which is dif­fer­ent than a tech­nol­ogy dis­cus­sion forum. One of the ques­tions we often ask clients is, “Why do you have a web­site?” This may seem like a basic ques­tion. In today’s post-dot-com-boom econ­omy, it is often taken for granted that every com­pany has a web­site, even if they don’t have a clear mis­sion state­ment for it. The ubiq­uity of web­sites may also be due to low ini­ti­a­tion costs and low bar­ri­ers to entry. How­ever, hav­ing a web­site and know­ing the pur­pose behind your web­site are two very dis­tinct things. The ana­lyt­ics of your web­site should directly sup­port your web­site objec­tive or mis­sion state­ment. The point is, under­stand­ing the “Why” behind your website’s exis­tence will exten­sively affect the “What” of the ana­lyt­ics you pay atten­tion to. This par­a­digm shift will change the way you approach your web analysis.

In much the same way, web ana­lyt­ics tools are taken for granted in today’s world. As such, web analy­sis may be seen as a task to check off our to-do list. On the con­trary, web analy­sis should be cul­tural – a way of life! It should be the foun­da­tion for your web opti­miza­tion efforts.
At this point, let’s take another look at Ques­tion #1. Do you have the exec­u­tive spon­sor­ship and resources nec­es­sary to sup­port the ana­lyt­i­cal needs of your orga­ni­za­tion?
Of course, resources include both mate­r­ial and human resources. Mate­r­ial resources might include a robust infor­ma­tion tech­nol­ogy infra­struc­ture, an intu­itive and flex­i­ble eCom­merce plat­form, value-add part­ner and ven­dor rela­tion­ships, and effi­cient processes for site opti­miza­tion and analy­sis deliv­ery. Human resources should include insight­ful ana­lysts, ver­sa­tile devel­op­ers, com­pe­tent con­sul­tants, and savvy busi­ness infor­ma­tion con­sumers? Take a few moments to con­tem­plate this one. Just because you have an ana­lyt­ics tool does not nec­es­sar­ily mean you get full points here. With­out the ancil­lary sup­port infra­struc­ture around your web ana­lyt­ics, you may not be real­iz­ing the full poten­tial return on your tool investment.

Is your web ana­lyt­ics data fully uti­lized? You may have a great tool, but if no one uses it, how much value does it bring? Here is a par­tial list of groups in your orga­ni­za­tion that might ben­e­fit from access to and train­ing regard­ing your web ana­lyt­ics data: Mer­chants (online and offline), User Expe­ri­ence, Web Mar­ket­ing, Pro­mo­tional teams, SEO, Paid Search, and Infor­ma­tion Tech­nol­ogy. Of course, the full list will depend on your orga­ni­za­tion. Ensur­ing these stake­holder groups have the abil­ity to get to per­ti­nent data quickly and eas­ily, and under­stand how to inter­pret and act on it, allows you to real­ize the return on your web ana­lyt­ics investment.

Shop­ping vs. Content

One of the most strik­ing exam­ples of dif­fer­ing objec­tives directly relates to online retail sites. While many other sites may be more con­cerned about con­tent con­sump­tion or cus­tomer engage­ment, online retail­ers say, “Show Me the Money!” Due to dif­fer­ing objec­tives, there should be a cor­re­spond­ing dif­fer­ence in Key Per­for­mance Indi­ca­tors and data dimen­sions used to ana­lyze those sites, respec­tively. As an exten­sion of what we dis­cussed above, the dif­fer­ent objec­tive of your web­site leads to spe­cific key met­rics which enable valu­able analy­sis. Under­stand­ing this con­cept allows you to move from page views and vis­its to con­ver­sion rates and yield.

In a sim­ple exam­ple, con­sider a page from a content-centric site (per­haps a blog post) com­pared to a page from a retail shop­ping site (let’s say a prod­uct detail page). Both are at a sim­i­lar level of gran­u­lar­ity in their respec­tive sites. How­ever the data we want to col­lect around each dif­fers sub­stan­tially. For the blog post we may want to know if a user is engaged with the con­tent, indi­cated by how long they spent on the page or if they read or wrote com­ments. For the prod­uct detail page, we are more con­cerned about what the prod­uct is and how the user got there (Browse, Search, etc.). We want to know if the vis­i­tor adds this item to their cart or if they share the prod­uct with their friends. Most of all, we want the vis­i­tor to pur­chase! Con­sid­er­ing these key dif­fer­ences in the infor­ma­tion we want to gather, shouldn’t we have spe­cial­ized track­ing and analy­sis in place?

Here comes Ques­tion #2 again… Do you have the right cus­tomized web ana­lyt­ics tools and peo­ple to help you per­form analy­sis and iden­tify prob­lems spe­cific to your prod­uct offer­ing, shop­ping expe­ri­ence and check­out flow?
Con­tin­ual focus on your goal (the money!) is essen­tial to suc­cess­ful web analy­sis. All too often, I meet with com­pa­nies who think only about projects and dead­lines. What they should be think­ing about is how those projects influ­ence their objec­tive (the money!). With­out a focus on the goal, site opti­miza­tion becomes nearly impos­si­ble because no valid cri­te­ria are used for project prioritization.

Which brings us to Ques­tion #3: Has ana­lyt­ics been an inte­gral and strate­gic part of the plan­ning and tag­ging process or just an afterthought?

If you answered ‘no’ to any of the ques­tions above, it’s time to make some course cor­rec­tions and get seri­ous about dri­ving major value for your com­pany on your web­site. To drive major value, the answers to each of the ques­tions above must be a resound­ing ‘yes’. Once these fac­tors are ironed out and you find your­self at the fore­front of dri­ving tan­gi­ble results and opti­miza­tion rather than strug­gling to get the right orga­ni­za­tional and tech­ni­cal pieces in place, you’ll be poised and ready to take part in the excit­ing growth rates com­ing to online retail­ers over the next 5 years.

“How much of the pie do you want…?”

Stay tuned for my next blog post where we will look at tech­nol­ogy adop­tion in the Online Retail Industry.