I finally experienced it, the inevitable reality of staying in Delhi, a power outage! Sitting in the dark, waiting for the generator to start, I thought: imagine you being asked to play a game of darts in a room that is very dark.
I finally experienced it, the inevitable reality of staying in Delhi, a power outage! Sitting in the dark, waiting for the generator to start, I thought: imagine you being asked to play a game of darts in a room that is very dark. You throw the darts in all possible directions, hoping that at least one of them hits the target. When the lights come on, you find that although a pair of darts came close, most ended up very far from the target. This sounds like a futile exercise, however, the reality is that many companies do this to their customers every day.
Most online Retail analytics continue to focus on a "one size fits all" approach in which they launch all kinds of offers and promotions to customers, hoping that the customer will accept at least one of them. This approach certainly works to some degree and can generate moderate sales, however, this is like throwing darts in different directions and then going through the bull's eye around you to feel good about your actions.
Retailers can significantly improve their effectiveness by really understanding how their customers interact with their website and other channels, and then focus on offerings based on this insight. The best part of an online environment is that these ideas are available - online visitors are leaving these signals every second. However, in most cases, this information goes nowhere. For more sophisticated retailers, this information is likely to be found in the logs or database or some sort of analytics engine. However, even in those cases, this information is not acted on effectively. This is even worse, because, taking our dart analogy further, it's like playing the dart game in a well-lit room, yet keeping your eyes closed all the time.
OK, enough with the darts analogy, let's see what an online retailer can do to collect and act effectively on the information that is collected in the online environment. The first thing an online retailer should do is implement a good web analytics engine. Web analytics engines are fairly easy to implement and can provide important information on how customers navigate the site, what they are looking for, and exactly where they are leaving the site. Comparing this to the environment of a physical store, it is like having a team of observers who follow all customers in stores at all times and literally observe every move the customer makes to evaluate their purchase options. Some of the sophisticated tools actually allow you to generate a "heatmap" for the site, where you can visually see how much revenue each link or ad generates on the site. There are several options available for a web analytics platform; however, the two good options are Omniture or Webtrends. If you're not ready to make a financial investment, Google Analytics offers an excellent alternative to your paid counterparts.
Once you implement an analytics platform, you will immediately begin to see a wealth of information. However, now what? The information by itself does not mean anything unless you can act on it. I strongly believe in fact-based decision making and would, therefore, recommend that every decision about which promotion or advertisement or product placement on the site is based on the relative earning potential of these assets. The home page is the most privileged area of the site and every inch of real estate on this page should be optimized and allocated to the assets that generate the highest income.
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