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Overstock.com Zeroes in on its Customers
The online retailer uses analytics to improve the customer experience on its Web site.
Posted Oct 18, 2004
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Online retailers like Overstock.com understand that when virtual shoppers endure a dreadful customer experience, other choices are just one click away. So to minimize the number of prospective customers that defect, scrutinizing the customer's experience became a top priority for discount brand-name online retailer Overstock.com. Although Overstock.com was using a system to track its Web traffic and sales, there was still what Vice President of Marketing Kamille Twomey refers to as a black hole. "We know where our traffic came from and we know what sales we got as a result, but in between that there's the whole customer experience--what did they do while they were on the site, what are the most efficient ways to get people to buy things, what did they click on, what do they like, where did we lose them if it didn't translate into a sale," she says. "That's where Web analytics has been mission critical, connecting the traffic coming in and the sales coming out on the other end." Overstock.com built approximately 90 percent of the applications it uses, so the retailer needed a solution that would be fundamentally effortless to implement, and as a result selected Omniture's Web analytics technology, SiteCatalyst. SiteCatalyst, which is delivered via an ASP model, collects and measures site traffic information and makes the information available through a reporting interface, delivering all information in real time, according to John Mellor, vice president of marketing at Omniture. "Somebody like an Overstock.com is going to be very interested in how their shopping cart process is performing and in how...merchandising promotions are performing," he says. Mellor is right on target as Overstock.com's first project was to redo its checkout process. "If there was a biggest piece of low-hanging fruit that was it," Twomey says. With a seven-page checkout process, Overstock.com was able to determine where customers were floundering and not completing the process. "At the end when you entered all your information we'd show you a page that [asks you if] all your information is correct, and we were losing about 15 to 20 percent of the people on that page," she says. "It looks exactly like our order confirmation page, and people were thinking that they were done with the process." Ultimately, Overstock.com condensed its lengthy checkout procedure to three pages, making it easier to for customers to successfully complete the checkout process and make a purchase.
Next was to rework the product pages. "If the checkout process is the most important thing the product page would be your second most important area," Twomey says. "It is the page that contains all of the information and the button where you put something into your cart." With Omniture, Overstock.com could value the real estate of the product page and determine which clicks were leading to actual sales. The retailer then reorganized the page to put the links that drive the most sales in the most prominent positions. Along with the marketing staff about 25 other people use Omniture's ClickMap to examine the customer's response to changes to the Web site, including page redesign and new banners. Having reworked its site Overstock.com is now experiencing a 70 percent conversion rate, as well as a drop in customer service calls regarding online checkout. Additionally, the retailer received a 2004 WebAward for "Outstanding Web site" from the Web Marketing Association. "What Omniture allows you to do is take that subjectivity of humans out," Overstock.com's Twomey says. "Omniture exposes exactly what people want." Related articles: Online Consumers Are Becoming More Sophisticated Don't Trash That Catalog Just Yet A new comScore/USPS study shows e-commerce benefits from a multichannel approach. It's All About the Customer Experience Organizations must understand their customers and adapt to their behavior.
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