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Exploring Online Shopping Behavior: How website characteristics affect likelihood of purchase and basket value on ecommerce sites

May 26th, 2016

Traditionally, brick-and-mortar stores have displayed their products in their windows, enticing passers-by to come in and learn more, perhaps meet and talk with the owner and other shoppers, and, ultimately, fill their shopping baskets and purchase the goods.

Today’s digital stores (ecommerce websites) are striving to achieve the same goals as their brick-and-mortar counterpbrick-and-mortararts, with varying scopes of products ranging from unprecedented breadth (e.g., Amazon) to narrow specialization (e.g., your local cupcake bakery).

Though ecommerce stores come in a myriad of types, and specific factors influence how customers shop at different websites, they all share one thing in common: Store owners are always on the outlook for some generalizable principles and ideas to test in their specific conditions in hopes of maximizing revenue.

Which website characteristics increase the likelihood that a visitor will make a purchase? And, since shipping costs are a considerable expense, how do you increase the likelihood that a customer will spend more money per shopping session?

Let’s look at a recent study exploring the effects of website characteristics on online shopping behavior and basket value, and how those effects depend on product characteristics.

 

The study

In March 2016, professors Girish Mallapragada of Indiana University, Sandeep R. Chandukala of Singapore Management University and Qing Liu of University of Wisconsin published the results of a study exploring the effects of product and website characteristics on customer shopping behavior and basket value.

The authors analyzed the shopping behaviors of 2,000 consumers over one year, collected from the ComScore Web Behavior Panel. The data encompassed 773,262 browsing sessions and 9,662 purchase transactions at 385 online retailers across 43 product categories.

 

Method

The researchers scored all websites on product variety offered and on two types of functionality: navigation and communication.

Navigation functionality captured the extent to which a website facilitated browsing through content, site maps, layout and updates.

Communication functionality captured the extent to which a website offered communication features such as email, chat rooms and message boards.

They also scored the products on their hedonic and utilitarian characteristics using a previously developed scale.

Hedonic products (e.g., jewelry) would be rated highly on items like “fun,” “exciting” and “delightful.”

Utilitarian products (e.g., office supplies) would be rated highly on characteristics like “effective,” “functional” and “necessary.”

 

Results

Which factors predict likelihood of purchase?

In the browsing stage, the researchers found that the following factors are significantly related to purchase:

  • Previous purchase (previous customers are more likely to buy again)
  • Session duration and page views (more engagement leads to increased likelihood to purchase)
  • Broad scope of products (more variety leads to increased likelihood to purchase)
  • Communication functionality (more communication features lead to decreased likelihood to purchase)

 

Which factors predict higher basket value?

Among the customers who made a purchase, the researchers found that the following factors are significantly related to basket value:

  • Page views (more page views were associated with higher basket value)
  • Session duration (longer sessions were associated with lower basket value)
  • Broad scope of products (more variety associated with higher basket value)
  • Communication functionality (more features associated with lower basket value)
  • Navigational functionality (more features associated with higher basket value)

 

However, the effects of navigational and communication functionality depended on the characteristics of the products consumers were shopping for. Namely:

 

  • Communication functionality lowered basket value for utilitarian products, but not for hedonic products
  • Navigational functionality lowered basket value for hedonic products, but increased basket value for utilitarian products

 

The authors suggest that people buying utilitarian products might be looking for relevant information about the product on the page instead of communication functions, which might be perceived as clutter and add to friction. On the other hand, people buying hedonic products might be looking for self-affirmation through engaging in a dialogue with others and find communication features helpful.

 

Key takeaway

If you are selling utilitarian products, your page might benefit from rich navigational functionality, while if you are selling hedonic products, your page might benefit from rich communication functionality.

In both cases, you want to entice your customers to engage with your pages and check back often, which would ultimately lead to more purchases and higher basket value. Having a variety of products to choose from, and earning the loyalty of returning customers also helps increase the likelihood of purchase and basket value.

 

You might also like

Exploring the Effects of “What” (Product) and “Where” (Website) Characteristics on Online Shopping Behavior [Executive summary from the Journal of Marketing]

Ecommerce Chart: How a low conversion rate can be a good thing [From MarketingSherpa Chart]

B2B Marketing: Customer-focused site design for book ecommerce drives order volume up 211% in three years [From MarketingSherpa Case Study]

Ecommerce Marketing: Time spent on site boosted by 50% with transition from flash sale to retail for fashion site [From MarketingSherpa Case Study]

 

Email Marketing: 7 (more) testing opportunities to generate big wins on your next email test [Part 2]

May 2nd, 2016

Does your email audience prefer short or long emails? How about images versus GIFs?

If you don’t know the answer to any of these questions, it’s OK. All you need is an A/B email test. 

Testing allows us to better understand our customers, and determine ways we can better engage them.

Last week, we detailed nine experiment ideas for you to try on your next campaign. If those weren’t your style, we have seven more for you — for a total of 16 testing opportunities.

Today, we’ll be reviewing opportunities in your body messaging, calls-to-action and design.

Email Body Messaging Testing

Testing Opportunity #10. Messaging tone

In this test, from the Web clinic, “Email Copywriting Clinic: Live, on-the-spot analysis of how to improve real-world email campaigns,” researchers used two treatments to increase total lead inquiries from visitors who abandoned the free trial sign-up process.

The first treatment was designed based on the hypothesis that visitors did not convert because the copy didn’t engage them enough, so it took a direct response tone. The second treatment was based on the hypothesis that visitors experience high levels of anxiety over potential high-pressure salespeople or spam phone calls. This treatment took a more “customer service”-oriented tone.

Read more…

Email Marketing: 9 testing opportunities to generate big wins on your next email test [Part 1]

April 28th, 2016

Email is a great medium for testing. It’s low cost, and typically requires less resources than website testing. It’s also near the beginning of your funnel, where you can impact a large portion of your customer base.

Sometimes it can be hard to think of new testing strategies, so we’ve pulled from 20 years of research and testing to provide you with a launching pad of ideas to help create your next test.

In this post and next Monday’s, we’re going to review 16 testing opportunities you can test around seven email campaign elements.

To start you out, let’s look at nine opportunities that don’t even require you to change the copy in your next email.

 

Subject Line Testing

Testing Opportunity #1. The sequence of your message

Recipients of your email might give your subject line just a few words to draw them in, so the order of your message plays an important role.

In the MarketingExperiments Web clinic “The Power of the Properly Sequenced Subject Line: Improve email performance by using the right words, in the right order,” the team reviewed several tests that demonstrate the importance of thought sequence in your subject lines.

Try testing point-first messaging. Start with what the recipient will get from your message and the email.

Read more…

Social Media Testing: How simple changes to Twitter copy led to a 119% increase in clickthrough

April 14th, 2016

Here at MECLABS Institute, parent company of MarketingExperiments, we never stop testing. Whether it be subject lines, email copy, Web clinic format or landing pages,  a day rarely goes by where there isn’t an experiment taking place on our campus. This culture of testing extends far beyond just the optimization team — it permeates the entire organization.

Case in point, a recent Twitter test imagined by our resident marketing operations specialist, Walker Ragland. Walker is famous around the Institute for his quick wit, strong marketing copy and love of all things Valdosta, Georgia. You might recognize Walker from last month’s MECLABS Live Optimization webinar, where he provided viewers with actionable tips on improving the performance of their site banners.

“Social media is still a new frontier for this company, so I’ve been encouraged with a generous budget to test out what works and what doesn’t work as far as different aspects of the creative of social,” Walker told me.

Armed with this healthy testing budget and a strong team supporting him, Walker has recently set out to test some of our social media sends across multiple platforms.

For this experiment, Walker wanted to test which Twitter messaging approach would work best when promoting the newest issue of the MECLABS Institute Executive Series.

“This is a relatively new product,  so I tried three different copy options with this test,” Walker said. “The first option used a quote from the piece, and it was a positive quote. The second featured a quote based on a negative point. And then the third option was just a standard offer.”

Take a look at the three approaches that he tested and see if you can correctly pick the winning treatment.

 

Version A: Positive messaging

  Read more…

Value Proposition Copywriting: 5 word pictures that got more people to buy

December 28th, 2015

Writing a value proposition is a lot like drawing a jellyfish in a game of Pictionary. Let me explain.

I was at a party recently where several people were playing a fiery game of Pictionary. One person who was particularly bad at the game started drawing a cylinder with a label on it.

Thick befuddlement settled on the guessing team.

After several wild guesses, the team rightly guessed that it was a jar of jelly. Then, much to the team’s dismay, the artist began to draw another picture. This time, luckily, his drawing clearly depicted a standard fish.

The word he held in his hand (the team finally discovered) was “jellyfish.”

Jar of jelly + fish = jellyfish

What the artist failed to realize in the heat of the game was that jellyfish are much easier to draw than either of those two things separately or together. It’s a half dome for the body; squiggly lines for the tentacles. Jellyfish. Next!

Too often, when trying to communicate something (like our value proposition) to our customers, we take the long way around. We use abstract language. We get lost in details that aren’t important.

People use their senses to experience the world. People’s thoughts are usually pictures of those sensate experiences (reality).

Read more…

Site Optimization: 2 strategies to consider when trying to increase conversion

November 30th, 2015

Online shopping is a favorite hobby of mine, mainly due to the convenience factor.

Recently, I was shopping online for a new coffee table and found myself with a dilemma. I found a website that had a great assortment of coffee tables: different sizes, shapes and every color you could think of. They had it all. After navigating through the website for a few minutes, I realized finding the right one was going to be difficult. I was having trouble sorting through the different styles and began to feel overwhelmed and frustrated.

I had great tables laid out on the page in front of me with no way to organize them how I wanted. Not only was I having trouble with the layout of the page, but there was also a pop-up continuously asking me to sign up for the newsletter and for my personal information.

I quickly became annoyed and overwhelmed, and I left the page.

This made me think of a concept that we teach at MarketingExperiments’ parent company MECLABS: the inverted funnel.

Read more…