Survey: Merchants to focus on targeting

The E-Tailing Group has released the results of their 6th Annual Merchant Survey. According to the survey, better targeting is the key to improved conversion rates and Return on Investment (ROI).

by Kristina Knight

On average, conversion rates are currently holding at between 2% and 3%, depending on the category of merchandise. For many merchants this is actually a drop. In 2006, more than 20% of merchants saw conversion rates of 3% but in the 2007 survey only about 16% saw the same conversion rate. To improve conversions, 29% of online merchants are designating more of their sales budget to marketing.

The greatest challenge, according to the merchants themselves, is segmentation or getting the right people into the store at the right time. To improve this, online merchants plan to pull out all the stops this year, beginning with keyword search. 96% plan to use keyword search to improve merchandising, 95% plan to use email campaigns and 89% will offer special savings and sales. Also high on merchants' list are seasonal promotions and cross-sells (both ranked at 89%) and free or conditional free shipping (84%).

Lowering the rate of shopping cart abandonment is an issue that online merchants haven't really dealt with, but is one that needs to be addressed. The survey found that 29% of merchants do not hold the merchandise in the cart after a user has left the store and about 27% hold it for 1-3 months. Finding a way to communicate, without effecting privacay, with those shoppers who leave without purchasing the items in their carts could begin to increase conversion rates even more.