Meghan Keane from eConsultancy reported recent findings from Webcredible’s “ecommerce persuasion poll.” Of 1300 online shoppers surveyed, the top reason shoppers purchase from one website over another is seller reputation (28%) followed by price (26%).

• Seller reputation - 28%
• Price - 26%
• Website look and feel - 16%
• Website ease of use - 15%
• Special offers - 4%
• Delivery factors - 3%
• Appearance in search listings - 2%

Retailers must realize persuasion and conversion is not all about pricing and landing page testing, but communicating trust.

How do you demonstrate your e-store is reputable?

If your retail brand is a household name, you’ve got a strategic advantage here. But if you’re not famous, you can still be seen as trust-worthy. We have discussed the importance of clear value propositions, still they alone are not enough to persuade today’s Google savvy Internet shopper. Whatever you claim about yourself is only marketing until it can be verified by customer testimonials or other independent raves and reviews.

Show off store ratings and media mentions

Not just for eBay sellers, retailers like GamePointsNow display customer feedback on their home pages to show off their reputation. Using a feedback service provided German company eKomi, GamePointsNow saw conversion lift by 5%.

Clicking on the Ekomi badge takes you to the retailer’s detail page, where you can read the positive, neutral and negative feedback details:

Below the Ekomi badge, GamePointsNow also links to a positive media mention from a gaming magazine.

EyeBuyDirect features customer testimonials, media mentions (linking to its pressroom) and its recognition as an Internet Retailer Top 100 site on its home page:

EyeBuyDirect uses scrolling testimonials in a box on the home page as they recognize that visitors often have a short attention span and it’s unnecessary to read more than a few testimonials. If visitors want to read them all, they can click through to over 4 pages of praise.

Even more impressive are the media mentions, which EyeBuyDirect dedicates primo real estate to on the home page (top right of content area). Understanding that, even at a sub-conscious level, when customers can connect your brand with logos he/she is familiar with and trusts (like ABC network, InStyle magazine and Forbes magazine), it’s powerful. Roy Hessel from EyeBuyDirect shared that after adding the media logos, customers were 45% more likely to stay longer on the site and complete a purchase.

What’s missing from the survey list is shipping costs, seller’s policies (including privacy policies), site security and payment options the seller accepts. (And don’t forget the conversion killer of required registration). These are all important factors in the retailer selection process — with reputation, website appearance, usability, security and policies making up the trust quotient; and the others (including price) the service quotient.

Show off your reputation in search engines

Shopping comparison engine TheFind launched a new feature last week that exposes this information about a retailer in search results, so customers can get a quick look at security seals, payment options, policies, shipping options and even links to social media like Twitter and blogs.

Would be nice if this kind of feature was also available in traditional search engines like Google. Maybe TheFind can license its tool to the big G or even the big 3 (Google, Yahoo and Microsoft Live Bing).

Another way to build your trust as a retailer is to practice reputation management in search engines and across the Web, as customers might do some digging about your company. A great resource for reputation management is Andy Beal’s book Radically Transparent (you can read my review and tips for finding a reputation manager for your company here).

Cross-selling and upselling is a popular tactic among online retailers in hopes of increasing average order value, items per sale and improving customer service with relevant suggestions. Amazon shared that cross-sells were responsible for 35% of its sales in 2006! According to the e-tailing group’s 8th Annual Merchant Survey Report (of 190 ecommerce executives), 55% of retailers will include cross-selling and upselling in their merchandising activities this year.

But cross-selling and upselling is one of the most difficult activities to do well and effectively measure, as evidenced in the e-tailing group’s findings:

Cross-sell/Upsell in Shopping Cart, Conversion Rates:

• Less than 1% conversion - 8% of retailers
• 1%-4% conversion - 16% of retailers
• 5%-10% conversion - 9% of retailers
• More than 10% conversion - 3% of retailers
• Don’t know conversion rates - 44% of retailers
• Don’t merchandise in shopping cart - 20% of retailers

Cross-sell/Upsell on Product Pages, Conversion Rates:

• Less than 1% conversion - 5% of retailers
• 1%-2% conversion - 15% of retailers
• 3%-4% conversion - 5% of retailers
• 5%-7% conversion - 6% of retailers
• 8%-10% conversion - 2% of retailers
• 11%-15% conversion - 1% of retailers
• More than 15% conversion - 2% of retailers
• Don’t know conversion rates - 50% of retailers
• Don’t merchandise on product pages - 14% of retailers

The only overwhelming statistic here is that most retailers have no clue how product associations convert. With 92% of retailers citing web analytics as the number one data source for merchandising decisions, it’s disturbing that many retailers are not measuring the outcome of these decisions.

Of course, measuring conversion rates for cross-sell/upsell can be ridiculously complicated, and depends on what kind of cross-sell/upsell solution you’re using. If you’ve built your solution in-house or your commerce platform came with cross-sell/upsell out of the box, you’ll need to figure out how the data will feed into your analytics tool. If you’re using a third party Software-as-a-Service like RichRelevance or Baynote, analytics might be provided for you, but it might not provide the depth and detail that you want.

Measuring the Right Thing?

For example, your merchandising tool might not break out conversion rate by shopping cart vs. product page. It may not be able to show you detail like product category cross-sell/upsell conversion, or tell you “conversion rate for cross-sells in price range $X-Y in relation to product price $A-B is xyz.”

Then there’s the question of “what does conversion rate mean?” Does it mean the product is viewed, added to cart, or a sale is made by a customer who is shown cross-sells on his/her visit? The merchandising tool we use on the Vancouver 2010 Olympic Store tells us that their tool lifts conversion by 140% and average order value by $14.94 (with A/B split testing). That doesn’t tell me if customers are buying more items per sale. I don’t know which suggested products are most successful to refine our merchandising strategy. I don’t know which products and categories have the highest conversion rate.

These problems and questions are common among online retailers, and while tracking these detailed events is possible (with complicated analytics mashups, for example) there’s often not enough IT resources or budget to make it happen.

Though you may not have access to all the data that would be helpful, at minimum, a global conversion rate is a start. I wonder how many retailers who “don’t know” their conversion rate just don’t know where to access the reports from the vendor.

Improving Cross-Sell/Upsell Conversion

If you do know at least your conversion rate for pages with cross-sells vs. pages without, you have a benchmark you can work on improving.

“You’ve read this far in this article. We think you’ll also love…” last year’s Get Elastic post Cross-Selling Tips for Online Retailers for a list of Dos and Don’ts, along with retailer examples.

Elastic Path also did a webinar on effective merchandising with Mike Svatek, formerly of Baynote. Mike offered this advice:

When do cross-sells work?

Cross-sells work well for considered purchases (high involvement rather than impulse - typically higher cost) provided they are lower cost accessories related to the product. They also work for smaller purchases with small accessories like Barbie and an outfit. You want to keep the cross-sells at half the price or less. When they are more than 1/2 the price of the item considered, the attach rate is low.

Products with natural bundling are also good, like cameras with lens, cleaner, memory cards and warranty.

When do cross-sells fail?

Don’t try to push higher priced items together with lower priced. People who buy a camera may buy a camera lens at the same time, but it’s unlikely someone adds a lens to cart and then all of a sudden wants to buy a camera. Same with sports tires - you wouldn’t try to upsell a Porsche.

Be careful that you don’t just look at correlation in your analytics data - but consider the primary and secondary intent. You may want to manually add constraints to your rules engine so you don’t goof your directional selling.

When do up-sells work?

Upselling (suggesting a similar item instead of the item being viewed) must have a small difference in dollar value or a small nominal percentage difference - 10-20% max. You need to show some incremental value for the increase in price.

When do up-sells fail?

When important attributes are different (red vs. blue dress) or when you show items that don’t have the features the customer is looking for. You can also fail by showing different brands. If a customer owns a Nikon he needs Nikon accessories, not Pentax or Canon.

You also need to consider any contractual agreements you have with suppliers and brands. For instance, you may not be allowed to show certain brands next to each other.

Effective merchandising often requires tweaking your tool with custom rules, rather than a “set it and forget it approach.” Make sure you fully understand your tool’s ability to set constraints, blacklist products and create custom associations. Also understand how to review any available analytics data your solution provider collects.

Plenty of studies suggest customers want demand free shipping:

• 61% online shoppers prefer to shop with a retailer that offers free shipping than one that doesn’t. — Forrester Research (2007)
• 43% of shoppers abandon their shopping carts because of unexpectedly high shipping charges. — PayPal, comScore (2008)
• 60% claim free shipping is a reason they are more likely to shop online. — Harris Interactive (2008)
• 90% believe free shipping offers would entice them to spend more online. — The Conference Board (2008)

David Bell, marketing professor at the Wharton School even observed that “For whatever reason, a free shipping offer that saves a customer $6.99 is more appealing to many than a discount that cuts the purchase price by $10.”

That’s not rational, is it?

I have a couple theories why free shipping is so important to customers.

“I Win” Theory

It could be the desire to win is what draws shoppers like those Professor Bell observed to the online channel. The ability to compare prices, find the lowest prices, skip parking lots and lineups — there’s a payoff vs. shopping in a store. The shipping charge negates that advantage - it effectively raises the total price paid and is like a “convenience tax.” A dollar discount is easy enough to find in-store, so finding one online doesn’t justify the shipping cost.

The customer thinks “The product is already marked up, it’s easy for the retailer to give a little on price. But footing the shipping bill costs the retailer something, so I win.”

Perceived Value Theory

Last year I wrote a post Are Dollar Discounts the Worst Incentives? which covered something we discussed at the Marketing Experiments Landing Page Optimization Workshop in Santa Monica. Dr. Flint McGlaughlin suggests dollar discounts devalue product, and the perceived value of the incentive can never exceed $X (where X is the amount of the discount). Whereas the value of free shipping could be much higher depending on what the customer imagines shipping costs would be.

If the preference for free shipping is stronger than other incentives for your customers, you may consider switching your email and affiliate promotions accordingly (hint, run a split test to find out).

If you’re not able to offer free shipping, one tactic to be careful with is showing a bundled price that includes shipping. A 1998 study by Morwitz, Greenleaf and Johnson tested “$82.90 including shipping and handling” against “$69.95 plus $12.95 shipping and handling”. They found consumers were less likely to recall the full total cost and were more likely to remember the product’s cost. Unbundled pricing had more demand.

On the flip-side, a 2005 study by Schindler, Morrin and Bechwati discovered customers who comparison shop had a higher degree of “shipping charge skepticism” and actually preferred the bundled price.

Moral of the story? Test.

This is the final installment of a 4 part series on mobile commerce design and usability…

Part 1: Home Pages and Navigation
Part 2: Search and Category Pages
Part 3: Product Pages and Cart Summary
Part 4: Forms and Checkout

This series is based on a review of 10 mobile ecommerce sites: Best Buy, Target, Sephora, Moosejaw (old and new design), Barnes and Noble, Amazon, Sears2Go, Ralph Lauren and Tickets.com. (Links point to mobile versions of each site)

Forms and Checkout Process

As I mentioned in Part 3: Product Pages and Cart Summary, Best Buy, Sephora, Target and Moosejaw’s new site don’t support mobile checkout. Sites mentioned in this post are Barnes and Noble, Amazon, Sears2Go, Moosejaw’s old site and Ralph Lauren.

I typically recommend ecommerce sites to include the following in their checkout processes to maximize conversion:

• Allow guest checkout option
• Provide security assurances and trust seals
• Link to privacy policy
• Ask for an email address in the first step of checkout
• Don’t ask for more information than necessary in form fields
• Mark required fields with an asterisk (*)
• Allow customer to copy billing and shipping addresses (use tickbox for shipping address “same as billing address”)
• Provide a telephone number for assistance at each step of checkout
• Store contents of shopping carts in cookies whenever possible, if customer abandons cart the items will still be there in a new session
• Use as few steps as possible and show a progress indicator
• Use personalization/tagging to identify customers with a promo code, and hide the coupon code field from others

When “checking out” mobile checkout processes, I noticed that none of them showed the progress indicator, linked to a privacy policy or had a “click to call customer service” link (perhaps because you can’t talk on your handset and input information at the same time like you can on a computer). I was unable to tests personalization/tagging capabilities.

At least one mobile site followed each of the rest of the best practices:

Guest Checkout Option

Nobody wants to be forced to register before checkout on the Web, how much more on a mobile device!

Barnes and Noble states explicitly that registration is not required, and hints that registration has a benefit — faster checkout next time:

Sears2Go also explains the benefit of registration and allows guest checkout, but puts the guest checkout option first and includes a bold button with the label Guest Checkout. Sears understands customers don’t necessarily read text, and Guest Checkout is self-explanatory.

Showing guest checkout first can improve conversion, as the customer is less likely to assume he/she needs an account or will be forced to create one to proceed. This approach assumes the customer wants the fastest checkout possible, which customers appreciate.

Ralph Lauren combines the sign in page with the first step of checkout (billing and shipping information). This approach can reduce the total number of steps.

Amazon’s simple log in is consistent with its Web checkout. It’s actually a required registration — but it appears so easy it doesn’t feel like a forced reg, your account creates itself as you go through the checkout process.

The downside to customer log in is it relies on email and password combinations which returning shoppers often forget (you have to remember at least your email address to request a password hint). Many simply create a new account - making it harder to reconcile customer information (one loyal customers looks like 5 flaky ones). This is an issue for both online and mobile channels.

Security Assurances

Despite the public’s fear of mobile payment security (as discussed in our Multichannel 2.0 webinar), none of these mobile sites had security assurances except for Amazon’s link “Why using a credit card is safe”

Ask For Email in First Step

The earlier in the checkout process you ask for an email address, the easier it is to follow up with a customer if the cart is abandoned with a triggered recovery email. Though the idea of chasing after a customer for changing his or her mind is controversial, many retailers have managed to save sales this way.

Of course, Amazon’s first step is the email address. The rest ask for an email address after 8-10 required fields on the Billing/Shipping page. Because some folks are paranoid about giving away any contact information, B&N includes “Your email address is required so that we can contact you about your order” and Sears2Go uses “Tell us where to send your confirmation email.” It might help to include a one-liner about your email privacy policy (i.e. you won’t share the address or send promotional emails.) Unfortunately Ralph Lauren has no assurances, and even pre-checks the email list permission box.

Perceived Difficulty of Forms

The longer the form, the more tedious it appears and the less the customer wants to bother with it. But most customers recognize asterisks (*) separate the required fields from the optional, so it’s key to include them.

It’s not a good idea to provide unconventional instructions like *Bold fields are required (which fields are bold below?). Never assume your customer is going to notice.

Allow Quick Copy of Billing Address to Shipping

This is standard for new customers, while returning customers and account holders should be able to select from existing shipping addresses and billing methods, like Amazon:

The only thing that’s confusing on a mobile screen is which button corresponds to which address when you have more than 1 or 2 to choose from. A little triangle marker pointing to the address on each button would help. An incorrect shipping address is a major problem.

A side note: Moosejaw’s old site (the new site has no checkout) had a time-saving feature where you enter your phone number in the first step, and based on your area code your city, state and country are pre-filled in the Billing Address step.

Estimated Arrival Times

I’ve mentioned before it’s a good idea to show actual dates of estimated arrival rather than “X business days.” It requires less thinking for the customer. Of the 4 sites, only Sears2Go provided dates rather than days:

Edit Cart in Process

Many retailers like Amazon remove navigation when a customer enters the checkout process in hopes to keep the customer in the funnel, but this can be a problem if the customer wants to make a last minute edit or add more products to the cart. Barnes and Noble allows cart editing, and Sears2Go allows an escape back Home or to the Shopping Cart summary. Even Amazon has a “Shopping Cart” link in it’s mobile checkout.

Alternative Payments / Pay by Phone

I didn’t notice any alternative payment options like PayPal mobile, but Barnes and Noble interestingly provided a Pay By Phone option. This isn’t a bill-to-phone-bill option (as discussed in the Multichannel 2.0 webinar), rather you can “Call 1-800-843-2665 (1-800-THE-BOOK)” to complete your order. You will be given a confirmation number to cite when you call after you have completed your order (on your phone and by email).

Perhaps some customers perceive this as more secure than entering a credit card over an unsecured mobile network, although placing an order by telephone carries its own security risks. It might also be a headache for Barnes and Noble if customers complete orders and don’t follow through with the phone call authorization.

Final Thoughts

With only a handful of reference sites, this series is not intended to be a best practices guide, rather a collection of recommendations based on observations. Please keep in mind I was viewing these sites with the iPhone and experiences on other devices may vary.

Most usability guidelines for the WWW carry over to Mobile Web, while common usability problems are exacerbated by mobile devices’ smaller screens and keyboards (or lack thereof), flakiness of mobile Internet connections and lack of standards between mobile designs, browsers and operating systems.

My recommendation is to have a mobile friendly site if the mobile channel is part of your retail strategy (whether for transactions or just customer service). When designing for the mobile Web, make sure you check out competitors’ sites in your industry, test your site on many different devices and involve real users in your testing.

I would love to hear your thoughts on your experience on mobile commerce sites, on this blog series or about your own efforts with mobile commerce in the comments.

Every month, Nielsen Online / Marketing Charts posts the top 10 converting ecommerce sites. If you follow the updates, you’ll see usual suspects like Schwans, Proflowers, 1800flowers, Office Depot and QVC popping up month after month. Sure, a lot of these retailers enjoy high conversion rates for no-brainer, repeat purchases but that kind of loyalty is earned — and requires a smooth checkout process to make it happen.

One of the worst culprits for friction in the checkout process is required registration. Forrester Research reports that 23% of customers abandoned the last online store that asked them to register.

In a usability test for a major online retailer, Jared Spool found new customers resisted registering, and some weren’t sure if they had registered before or not, entering various email address and password combinations in hopes they wouldn’t have to register. Others were suspicious the retailer would spam them with sales emails if they registered.

“Very few” repeat customers remembered their login information, and worse, many had multiple email addresses that had changed over the years. Guessing email/password combos gets frustrating, and of those who eventually clicked “Forgot password?” only 25% ever tried to finish the checkout! Further analysis of the customer database revealed 45% of registered customers registered multiple times, some as many as 10. If this happens on your site, it’s a big problem - you have frustrated users and dirty data - you overstate your unique customers and understate your repeat purchase and lifetime customer value data.

Jared’s recommendation was to replace the Register button with Continue, and adding “You do not need to create an account to make purchases on our site. Simply click Continue to proceed to checkout. To make your future purchases even faster, you can create an account during checkout.” Conversions increased 45%, bumping annual online revenue by $300 Million.

Back to the top converting sites, I’ve checked them all out to see how they handle registration. Interestingly, some like QVC and Schwans (yeah, the one with the 50% conversion rate) still require registration. Exclusivity of product/service may afford them to get away with this, but makes you wonder how many millions are left on the table.

Of the top converting sites, I have a few favorites. I hope these designs inspire you as you consider your own checkout optimization:

Proflowers

• Prominent 1-800-Number
• Security is reinforced at the top with “Secure Checkout”, in the “Sign in Using Our Secure Server” and at the bottom with security seal.
• Order details are shown with thumbnail image
• Shows the number of steps in checkout
• Very clear that guest checkout is an option, even uses “Proceed as Guest” on call-to-action button
• Links to privacy policy

1-800-Flowers

Like Proflowers, 1-800-Flowers allows for easy guest checkout, shows number of steps in checkout process and provides a toll free number but does not use any security assurances (although I may be seeing a test version with them removed). Because people read English left to right, I prefer the guest checkout on the left. Why subject a customer to friction if you don’t have to?

LL Bean

LL Bean provides 3 options but my suspicion is 2 is more effective. Whenever you offer more choice, you have higher risk of abandonment. Allowing the customer to create an account after checkout would satisfy both types of new customers - those who want to create an account and those who don’t. Unless…

J.Jill

…I like J.Jill’s approach to account creation. It lists the benefits of membership, shows all the fields required to sign up (so customer can decide whether they’re comfortable with providing personal information and believe sign-up time is reasonable).

I would also like to see the guest checkout option on the left and a more prominent privacy / security assurance on both LL Bean and J.Jill.

Amazon

I’ve seen the exact Amazon sign-in design also used by other major retailers and Amazon does many things well:

• “Ordering from Amazon is quick and easy” <-- addresses the fears and uncertainties about the difficulty to check out
• Captures an email address as the first step so Amazon can send a triggered email should something go wrong (You have items in your cart and didn’t complete checkout, did something go wrong? How can we help?)
• Asking for minimal information in the first step vs. asking for a lot of information may convert higher, customers perceiving it as simpler/easier (reinforces the promise “this will be a breeze”)
• You have to create an account, there is no guest checkout option but “you’ll create a password later” makes it sound like that doesn’t matter
• “Sign in using our secure server” is a good call to action to proceed.

How do you motivate customers to register? Forrester’s survey found 51% of respondents were somewhat or very willing to part with personal information in exchange for discounts, 40% to save time and 27% for a more personalized experience. Make sure you mention at least one key benefit for registration when asking for it.