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Power to the Little People

E-business gives customers new leverage over corporate giants.

“We take customers’ advice seriously,” says eBags.com CFO Mark DeOrio. “If they suggest a product redesign and it makes sense, we make the changes. Fortunately, we don’t carry a lot of inventory on our own products so we aren’t left with outdated merchandise.” As for other manufacturers’ products, those companies “routinely log on to the site to see what consumers are saying or to check their overall ratings,” DeOrio adds. “We also E-mail the comments to them once a week. I know they have made changes based on what consumers are saying.”

By opening itself up to customer criticism and testimonials, eBags creates strong feelings of trust and community, says Jim Nail, principal analyst at Forrester Research. “If consumers perceive you as pushing a product on them to maximize your bottom line, you only reinforce their cynicism and skepticism,” Nail adds. “This is all about consumer advocacy.” Researchers at the Massachusetts Institute of Technology’s E-Business Center have found that the Website characteristics that instill a feeling of trust vary by category: privacy and order fulfillment matter most for information-intense, high-involvement sites such as travel; ease of navigation is key to information sites such as portals, sports, and community sites; advice is critical on sites that sell expensive products such as computers; and brand strength counts for a lot as well, particularly in wooing more-educated consumers. All of that suggests that there is no one-size-fits-all best practice in Web design, but in fact each company must carefully tailor its online presence to reflect its mission, identity, and customer base.

Making Converts

Similarly, understanding the differences between online and in-person shopping has prompted companies to redesign their Web pitches. “More than half of the people who walk into one of our [nearly 1,000] stores typically walk out having purchased something,” says JoAnn.com’s Westreich. “With catalog shoppers, the conversion rate is about 30 percent. On the Internet, you can be looking at 10 percent. This is a nascent channel where people can quickly navigate what they want to buy and from whom. You can’t appeal to them the way you would in a store. You have to learn how they want to buy and then provide products in that way.”

Learning how is becoming easier as companies offer more-sophisticated Website analysis software and services. “Companies are able to carefully track the behavior of consumers,” explains Patti Freeman Evans, a retail analyst at New York–based Jupiter Research. “They can see the paths these site visitors travel as they browse and place goods into their shopping carts, only to abandon the purchase at the checkout line. This reveals a lot about the ‘pain points’ on a Website.”

New York–based Danskin Inc., which makes women’s dance and exercise apparel, hired Ann Arbor, Michigan-based ForeSee Results to analyze its site and survey its customers. The company discovered that while Danskin’s effort to drive visitors to the site through paid search and affiliate referral programs was successful, once would-be customers arrived they were turned off by confusing navigation and poor graphics: instead of showing photographs of its products, Danskin had simply upload the line drawings from the catalog it sent to its B2B partners.

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