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E-Commerce Basics For Online Retailing In 2007

Online selling is one of the few bright sectors in the retail firmament. You will be aware of the overall growth rates: 50% is not uncommon. For mail order companies, online sales routinely count for over 30% of total sales. The pace of change is phenomenal: marketing concepts and tools are fast developing and the body of insight into what works and what doesn't is expanding exponentially.

So, what will make the difference in 2007? Recent evolution of what really matters on the Internet is less focused on technology, but on sales & marketing insight, good old fashioned attention to detail and sound operational execution. The technology is evolving, but we are of the opinion that this is the least critical factor at present. Provided your site works and copes with reasonable sales growth, that is.

Concentration next year will be on what works for customer acquisition, using pay-per-click advertising, affiliates, community marketing, as well as conventional catalogue marketing. Affiliates can generate up to 10% of your online sales managed well: PPC campaigns can easily account for 50% of total sales, but nothing beats the long-term value of good search results in Google, now 60%+ of the UK market.

Once the visitors come in, it's a question of making your products easy to find and navigate. It's amazing the difference a little analysis of your catalogue can make to a site's usability: the number of products, the number of categories and product groups and factoring this into the site's layout. Bizarre marketing categories and names may not prove attractive to first-time shoppers. Small tricks like best-sellers and featured or favorite categories can scoop 20% of your home page visitors. Bear in mind, of course, that only 40-50% of all visitors on a well-performing will actually visit the home page.

More frightening are the howlers some sites can make on conversion (even the very largest), making it challenging to checkout. It's surprising what simple improvements can be made to steer your customers through the process. Basket drop-off rates of 50% are not uncommon in the industry - clawing that back can pay huge dividends.

But, at the end of the day, you manage what you measure. Bill Gates said the Internet is the world's largest reporting engine and it's true. Even with tools like Google Analytics, it's possible to sell the source of visitors, where they go on a site and what they buy. The detailed analysis of your site's performance as a sales machine is critical to success: even small changes can produce massive returns.