Web Sales

Ringing the digital cash register is an easy goal to understand, and it is easy to measure success. If your site has a shopping cart and sells directly to visitors, Web sales is one of its goals. Amazon.com is probably the best-known example of a pure Web sales site, but many corporate Web sites sell something directly to visitors.

Saying that your goal is "Web sales," however, is a broad goal. It helps to be more specific about exactly what kind of business you have, because different kinds of businesses need different search marketing strategies.

Online Commerce Versus Pure Online

An online commerce site offers items that can be purchased right on the site, but it delivers the items offline. In contrast, a pure online site not only sells on the Web, but delivers electronically, toothere is no physical package sent to the buyer. Your business might be squarely in one of these camps, or it might be a hybrid, where some of your products are delivered online and some are delivered offline. So, although we contrast online commerce businesses from pure online businesses, keep in mind that in real life businesses fall on different points of a continuum, not always at the extremes.

Many successful Web businesses are pure online businesses. Charles Schwab sells investmentsthe buyer makes the purchase online and might receive a mail confirmation, but the asset is owned immediately. Downloaded software and music are other examples of pure online businesses. In contrast, online commerce businesses include everything else actually sold on the Webbooks, packaged software, CDs, and so many other things now. Every day, something new is available for sale on the Web, to be shipped to the buyer's address. In many ways, Federal Express and the rest of the package delivery industry is the biggest winner in the e-Commerce revolution.

But why is this distinction between online and offline delivery important? Because the faster the buyer gets the product, the more impulse purchases are made. And impulse purchases differ from a well-researched purchase in important ways. Those differences go to the heart of your search marketing strategy.

When we examine pure online businesses, we see that they inspire the most impulsive purchases possible. Think about how online trading has rocked the securities industry in the past ten years. Time was, buying or selling stock was a big decision, one not made often. Advice was frequently sought from a stockbroker, a financial advisor, or even friends and family. Buying or selling an investment usually received careful consideration.

What happened when investments could be bought and sold online? Everything changed. First, there was huge competition over the lowest fees charged for each sale, the simplest customer experience, and the trustworthiness of the electronic broker. But that was only the beginning. Completely new needs began to emerge. Brokers began to compete on the information availablereal-time quotes, investment analysis, and portfolio management tools. And then day traders emerged. Day traders are the ultimate impulse purchasers in the electronic brokerage business. And they are highly sought-after customers because the churn in their accounts brings in large fees. They are the high rollers of the brokerage business.

This kind of change is underway in music today, as brick-and-mortar retailers that first came under attack from Web retailers such as CDNow now also fear Apple iTunes, the music download store. Digital commerce and digital delivery inexorably result in more impulse purchases at lower prices. Whereas we formerly thought a bit before trooping to the store to buy a $15 CD, now we think nothing of downloading a single song for 99¢. You can see the same shift underway for books and can imagine it affecting many other industries as the years go by.

THE SEISMIC SHIFT TO IMPULSE PURCHASES

The shift to more impulsive purchases is not limited to pure online businesses. A 2000 Angus Reid study showed nearly 25 percent of all Web purchases were made on impulse, but by 2003, a User Interface Engineering study showed it had grown to almost 40 percent. Analysts describe various factors that can increase impulse purchases for your site.

• Offer a deal. Two 2000 surveys by Yankee Group and Ernst and Young each found price to be the #1 reason consumers cited for making unplanned purchases.

• Make it easy. The Web impulse purchase champion, Amazon, has shown that a well-designed site with one-click purchasing and personalized offers results in higher sales. Many book lovers acknowledge that they buy more books from Amazon then they did when they had to schlep to the bookstore. And making physical delivery more convenient continues to drive a shift to impulse purchases. Best Buy lets customers buy online and pick up the product at a local brick-and-mortar store. Amazon guarantees delivery on a particular date for some products. Most online commerce sites offer some form of "Buy Today, Ship Today." Many companies use text chat windows for people to ask questions while looking at pages on the Web site. Basically, every roadblock you remove brings higher impulse sales.

• Perfect your site navigation. User Interface Engineering found that 87 percent of impulse purchases were made by visitors who navigated a site's product categories, instead of using the site's search engine. It appears that although customers might find your site using Google and other search engines, you will increase your impulse sales if you provide clear navigation after they get there. Apparently customers who navigate your product categories are exposed to more product pages and more merchandise ads than those who use your site's search facility, and higher impulse sales result.

What does this shift to more impulsive purchases mean for search marketing? First off, it means more of your business comes to you from search engines than ever before, but it means more than that. Impulse purchasers search for different things. A day trader is not looking for the same brokerage features as a conservative investor, and the same is true for other industries. People buying CDs are more likely to use the name of the artist and the name of the album in their search query, whereas folks downloading tunes for their iPods might use the name of the song. As you saw in Chapter 4, there is a difference between informational and transactional searchesimpulse purchases tend to be far more transactional than informational.

As your business moves from offline to online commerce to pure online, you might see similar shifts in searcher behavior that need to drive your search marketing strategy.

Retailers Versus Manufacturers

In offline businesses, manufacturers and retailers usually do not compete with each other. Distribution networks connect manufacturers to retailers directly or through wholesalers, and are so efficient that most manufacturers do not even sell their products directly to end customers. The Web has changed that manufacturer-retailer relationship in many industries.

On the Web, any manufacturer with a commerce system and a UPS label can deal directly with the end customer, completely bypassing the wholesalers and retailers. At first, people talked about disintermediation, a fancy term that basically means the manufacturers cut out the middlemen. But what happened, as usual, is more complex and nuanced than disintermediation, and has varied by industry.

Many consumer manufacturers have added the ability to sell direct to customers or have expanded the volume sold directly. Book publishers that rarely sold books except through intermediaries now sell more direct than ever before. Manufacturers of little-known products that had trouble getting wide distribution have huge advantages in selling direct on the Web. But Amazon and other online retailers show that, for many businesses, immense value still remains in aggregating the wares of many manufacturers in one place. Many manufacturers well-schooled in drop-shipping large volumes of their products to a warehouse found they are not necessarily proficient at shipping one item to someone's home and dealing with the customer service issues that go along with it. Book publishers, for example, cannot offer the low prices and fast shipment to customers that Amazon does, because the publisher's low direct sales volumes prevent investment in the most efficient distribution systems.

Dr. Michael Hammer, the originator of the reengineering concept, gave the example that a central air-conditioning manufacturer can sell direct on the Web, but there are so many questions before purchase and so many thorny installation problems (as well as post-installation maintenance needs) that it might not make any sense to do so. That manufacturer's Web site might be better devoted to offline sales through its traditional dealer network. So, manufacturers must think carefully about the value of direct sales to their end customers before pursuing a disintermediation strategy. Many manufacturers are better off pursuing offline sales as their Web site's primary goal, as we discuss later in this chapter.

Just as manufacturers and retailers have different business strengths, so do their Web sites, as shown in Table 5-1.

Table 5-1. Strengths of Manufacturer and Retailer Web Sites (The strong points of manufacturer sites differ from those of retailer Web sites.)

	Manufacturer (e.g., Sony)	Retailer (e.g., Buy.com)
Breadth of products offered	One manufacturer	Many manufacturers
Depth of product information	Deep and detailed	Surface only
Objectivity of product information	Biased to own product	More objective
Frequency of return visits	Moderate	High

Figure 5-1 shows two Web pages, one from Sony, a manufacturer of DVD players, and one from retailer Buy.com. At sony.com, you obviously see only Sony DVD players, whereas buy.com shows DVD players from many manufacturers. Sony's site is likely to have much more detailed information about its products and underlying technology (including how it works and what the benefits are) than any retailer does, but the content is also slanted in favor of Sony, rather than being objective. Whereas many retail sites just show warmed-over manufacturer information, smart retailers show third-party reviews and solicit customer reviews, providing more balanced choices, because there is no allegiance to any particular manufacturer.

Figure 5-1. Comparing manufacturers and retailers. Both sell DVD players, but each has a different emphasis in making the sale.

Beyond their relative strengths and weaknesses, the very goals of manufacturers and retailers differ, too. Buy.com does not care which DVD player customers buy as long as they buy from them. Likewise, Sony does not care who customers buy from as long as they buy a Sony DVD player. These differing goals lead to different Web approaches, with Sony emphasizing deep product expertise and branding that leads to a Sony product purchase. Buy.com emphasizes customer experience, one-stop shopping, competitive prices, and quick shipping.

Obviously, both manufacturers and retailers also care about customers considering their companies for future purchases. Even here there are differences, however. A manufacturer's brand image for product value and quality is a different proposition than a retailer's reputation for low prices and strong service, and their Web sites are designed accordingly. Manufacturers sometimes differ from retailers in frequency of return visits, too. Some retailers get more frequent return visits than manufacturers, so features that depend on return visits, such as personalization, might be more useful to retailers.

These important differences between retailers and manufacturers also lead to somewhat different search strategies. Both retailers and manufacturers emphasize informational and transactional queries, but it is usually easier for manufacturers to get high search rankings for queries that contain their brand names and model numbers. Thus, a query for "sony playstation" is much easier for Sony to rank #1 for than it is for Buy.com. Buy.com and other retailers might do better than Sony, however, for the query "video games."

Even if your business is not purely a manufacturer or a retailer, some of these principles might still apply. Dealers that act as manufacturer's representatives often sell just one manufacturer's products, so they are basically extensions of the manufacturers, and their Web sites usually have the same strengths and weaknesses as those of manufacturers. Dealers that sell competing products from multiple manufacturers might resemble retailers more than manufacturers on the Web.

Retailers and manufacturers also differ in terms of the importance of navigational queries. In general, manufacturers are more recognizable than retailers, although that is not always the case. No matter how well known (or unknown) your company is, you want to take steps for your company's Web site to be found when its name is entered. But it is more important for some businesses than others. It is more likely that customers will aim for a manufacturer of a product rather than its retailer. Many more searchers look for "sony dvd player" than "buy.com dvd player" (or even "amazon dvd player"). A well-known retailer such as Buy.com does need to pay attention to being found for navigational queries, but informational queries are more important.

Manufacturers and retailers that sell online have many characteristics in common, but they also have different strengths that bring value to their customers in the buying process. These varying strengths influence both the design of their Web sites and their search marketing strategies.