Kevin Ertell works with the product, delivery, client services, and marketing teams to maximize ForeSee Results’ value to retail clients. He spoke with eMarketer about the outlook for this year’s holiday shopping season and what retailers need to do to create customer loyalty.
eMarketer: What’s your outlook for the upcoming online holiday shopping season?
Kevin Ertell: I’m cautiously optimistic. There have been a couple of indicators lately that I think are interesting. One I just saw is that for the last 20 or 25 years the American savings rate was a negative number. Over this past year, it’s been positive 5%. I think it’s a good sign that people have been saving money.
I’m also starting to hear people talk about this idea of “frugality fatigue.” They’ve been saving money, and maybe it’s time to spend a little, buy a little bit. The other thing is that we’re now going to enter into a season where the comps should be a whole lot easier, because it was so bad last year in October, November and December.
If we start to see better comps, that will start to produce better media stories, and since almost all of the recession has been driven by consumer confidence—and lack thereof—maybe we’ll get a little more confidence, and that can snowball positively. So, that’s why I’m cautiously optimistic.
eMarketer: What kinds of things will retailers be redoubling their efforts at and what types of things fall lower on their list of priorities that at one time were higher?
Mr. Ertell: That’s an interesting question. What I would hope is that retailers focus more on customer experience and core usability issues. What we have seen is, at least on the marketing side of things, much more focus on marketing tactics that are delivering pretty quick results as opposed to experimental stuff on the fringes.
“We’re going to see an awful lot of search engine marketing and e-mail marketing.”
I’ve been hearing a lot of people talking about social networks, and seeing what we can do with Facebook or Twitter, but that still seems to be peripheral at this point. So, I think everyone is starting to gear up for 2010 to really focus in those areas. During this holiday season though, we’re going to see an awful lot of search engine marketing and e-mail marketing—some of the tried and true stuff.
eMarketer: How can retailers build customer loyalty in an environment where competitors are trying to outdo each other by offering bigger discounts?
Mr. Ertell: I see tons and tons of opportunity, particularly online, in just improving the customer experience. We are looking across a bunch of different retailers where we ask the question, “Why did you come to the site?” We’re seeing at many, many retailers that the amount of people that say they came to make a purchase today is 20% or higher. Yet, those people’s conversion rates are nowhere near 20%. So, there’s a massive gap there, and a lot of that gap can be attributed to usability issues.
So, if sites focus more on that core usability, they can see a lot of bang for the buck on improving their ability to meet customers’ needs. If you do that, then price, while it will never be a non-factor, can become a lesser factor.
eMarketer: What do consumers expect when they shop on a retail Website?
“Many, many sites have lots of obstacles along the way, and they’re mostly little things, the things that they don’t even recognize themselves.”
Mr. Ertell: They expect to be able to find what they’re looking for, and they expect to be able to purchase it without a lot of obstacles in the way. What I find, though, is that many, many sites have lots of obstacles along the way, and they’re mostly little things, the things that they don’t even recognize themselves.
You know, I talk a lot about the fact that those of us who work on our sites day in and day out are about the worst possible people to understand our customers’ perspectives. We’re way too close to our own site. We know exactly how it’s supposed to work. So we don’t see things the way customers see them.
We don’t realize that customers get stuck in all sorts of areas on the site that aren’t clear, because the thing about a Website is it’s a software application. It’s like Word or Excel, except there are no manuals or training programs. You as a customer are in self-serve mode. You’ve got to figure it out. It’s a difficult thing for any company to produce something that is so intuitive that people can just instantly get it and understand how it works, and so they don’t. Most of our Websites aren’t anywhere near that level of intuitiveness and that’s what we need to work on.
eMarketer: I have seen ForeSee Results research that concludes that pure-play online retailers tend to satisfy shoppers better than multichannel retailers. Why is that?
Mr. Ertell: Pure play’s entire business is their Website. So, they recognize that their business is technology and technology is their business. They understand they have a software application that they have to maximize and make the best. They obviously have the full support of their CEO to make that happen. If the CEO is completely focused on that, the entire company is focused on understanding that experience and how to make it better and what goes with it.
Multichannel retailers are far more distracted. They tend to have siloed organizations that are pulling in different directions. They tend to think about the Website in different ways, so they don’t consider the Website or the fact that their business is technology. They consider that you have IT work on a Website. You have this other group on a Website, so the focus is not anywhere near the level it is on a pure play in terms of improving that software application that happens to be the Website. I think that is primarily the reason why we see that difference.
eMarketer: Do multichannel retailers have capabilities that give them an advantage?
“I’m a huge believer in the idea of being cross-channel, as opposed to multichannel.”
Mr. Ertell: Yes. I think there’s a huge opportunity there. Multichannel retailers have a massive asset in their stores and this capability to deliver that experience across channels and maximize all the strengths of each of those channels and experience. I’m a huge believer in the idea of being cross-channel, as opposed to multichannel, meaning that you are leveraging the strengths of each channel and bringing them together in a way that is actually greater than the sum of the parts.
The issue is that, without the focus on some of the basics of that core experience on the online side, too many multichannel retailers fall out of the process. Those basic core experiences still have to be there, and have to be rock-solid or people fall out of the process, huge numbers of them. So, that’s where I think the focus needs to be, stronger than ever.