Speed Equals Dollars

I recently returned from a conference where I was told by an attendee that as a result of listening to me talk at a conference a few months back I had made his company “millions of dollars”. I’d helped his team reduce their website’s average page load time from 6 seconds to 2 seconds. Now I can only assume he was referring to the future benefit of the impact of my recommendations but it’s led me to write this post and share some of my thoughts.

Website speed is the most underrated and least prioritised thing in eCommerce. Companies are starting to focus on user experience but are forgetting that speed is one of the cornerstones of user experiences.

Speed Equals Dollars
According to Kissmetrics, 47 percent of visitors expect a website to load in less than 2 seconds, and 40 percent of visitors will leave the website if the loading process takes more than 3 seconds.

There are further studies that show the correlation between conversion rate and load times. Our own real world experience has shown that by decreasing page load time by 1 second we were able to achieve a 1% increase in conversion rate. If a company has annual revenues of $10 million this would equate to an additional $100,000 revenue. Small improvements in speed can yield significant results to your bottom line.

So what are my recommendations?
There are countless websites / blogs dedicated to explaining technically how to speed up your website so I’m not going to repeat any of that here. However I do have two recommendations for the non-technical and if followed makes much of those technical instructions less important.

Use a Content Delivery Network (CDN) and Content Accelerator
A CDN allows your website to be cached on servers around the world and closer to the users. This means that load times are faster regardless of where the user is. However, more importantly using a CDN means that your server is not being contacted for a high percentage of requests and therefore under periods of high load you don’t need to worry about having to scale.

A content accelerator optimises your website content on the fly. So what the technical website will tell you to do can mostly be done by a third party content accelerator meaning less of your developer’s time spent worrying about speed optimisation and more time building out new functionality. (A content accelerator will only speed up your front end (HTML, CSS and Javascript). Your developers must still ensure the backend is optimised for speed and efficiency)

We use section.io for both our content acceleration and CDN. I highly recommend them. They are very hands on and provide a great level of support at all hours of the day (and night).

Educate Your Graphic Designer
Make sure your Graphic Designer understands the importance of website speed and is optimising all the images that are being loaded onto your site. Do not rely on third party plugins to reduce images sizes. Make sure your images are the correct size and quality for your website.

Speed Equals Dollars

The Future of (Mobile) eCommerce: A Few Predictions

I often think to myself what’s next for eCommerce and I have all these wonderful and crazy thoughts. So I’ve decided to put some of these ideas down in ones and zeros so that I can come back to them in 10 years time and see how far off I really was!

The Future is Mobile
Let me start by saying the future of eCommerce is mobile. You don’t need to be a futurist to see that one, the data speaks for itself. As we see mobile eCommerce having such strong growth I believe innovations in eCommerce will be skewed towards mobile in an effort to improve user experience and increase conversion rates.

Contextual Advertising and Personalisation
Location based advertising is already here with platforms such as Google Adwords already offering location based targeting. However I think people are going to become a lot more strategic and creative when using location based advertising. One idea I’ve had is to identify if someone is show rooming from within or even near a competitors bricks and mortar store and offering that customer an incentive to convert on your website instead. In the near future I think that location based and future targeting is going to transition from advertising to highly optimised on-site personalisation.

I also predict this advertising and personalisation is going to become a lot more contextual. By adding a customer’s current velocity (speed and direction) to an already known location we can detect whether a mobile customer is walking or travelling on another medium. By tracking this movement we can detect if they are travelling by road towards or passed one of our stores or are they travelling on a train to a station or flying on a plane to an airport or city where we have a store.

We may also know through analytics that a customer on a plane is less or more likely to convert than a customer on foot and therefore be able to direct our marketing dollars more effectively.

As devices evolve I believe we will be able detect the environment in which the customer is browsing. By monitoring temperature and humidity in a customer’s location we will be able to offer a very high degree of personalisation displaying winter or summer items.

Touch, Feel and Smell
Looking a little further into the future one of my other predictions that people often gawk at is the thought of customers being able to touch our products via their mobile device. While this requires major innovations in hardware I don’t believe it’s beyond the realm of possibility for a device (maybe using small electric currents?) to be able to simulate different touches and feels. Imagine if you can feel the thread count of that linen or stroke that suede jacket, how much would that increase a website’s conversion rate by?

And while we are talking “crazy” ideas, how good would that new book smell be during the checkout process on Booktopia.

Wearable Devices
No discussion on the future of the internet could be complete without wearable devices. I believe both wearable and possibly embedded devices are the future of the internet and will play a role in the future of eCommerce. It will definitely mean more data points for retailers to consider but while I don’t think Google Glasses are going to go beyond the tech community I do think user experience and interface thought will need to be given to the contact lens and other wearable devices.

The future of eCommerce is endless and this blog could continue on forever. What do you think lies beyond the horizon for eCommerce?

The Future of (Mobile) eCommerce: A Few Predictions

3 Reasons for Online Retailers NOT to offer Free Shipping

Free Shipping may be offered by a lot of online retailers these days but is it really the right thing to offer on your site? Are businesses going to be able to sustain this blanket offer or are we going to start seeing more conditions placed on the “Free Shipping” offer?

Below I outline 3 reasons why I don’t believe Free Shipping is right for most eCommerce sites and also give some quick thoughts on where I think online retailers are heading with these blanket offers.

1. Your average basket size will decrease with a Free Shipping offer
It’s natural for shoppers to seek value for money and it’s no different when paying for shipping. When shoppers are required to pay a fixed shipping cost they tend to want to get value for money, and this tends to mean buying more. If a customer doesn’t have to pay for shipping they will tend to purchase “on-demand” meaning placing multiple orders sometimes very close together or waiting till they actually need an item before purchasing it. Not only does this increase your postage and handling costs, but also means you could lose the subsequent sales to a competitor.

An alternate to offering a blanket fixed postage cost is to offer Free Shipping for orders over X dollars. If X is set at a correct value greater than your current average basket size this offer will increase your average basket size significantly enough to warrant the shipping cost to your business. My thought is that as we move forward into 2014 and beyond we will see more online retailers retracting their blanket Free Shipping offers in favour of these basket size dependent offers.

2. You lose your ability to have Free Shipping promotions
Free Shipping promotions are a great way to reengage dormant customers or incentivise first time customers. By being selective with who you offer the promotion to you can lure dormant customers back or acquire new customers while not affecting your postage revenue from customers who are happy to engage with you without this added incentive.

Free Shipping promotions also give you another reason to market to your customers and allow you to promote new features of your store. For example “Download our App and receive Free Shipping on your next order” or “Subscribe to our newsletter and receive Free Shipping on your next order”.

There are many more ways you can use Free Shipping as a promotional tool, the above only serving as some examples, and if you already have a blanket Free Shipping offer across your site you lose these tools.

3. It doesn’t make money
Based on my discussions with online retailers that offer blanket Free Shipping most acknowledge that the additional volumes generated from the offer are not paying for the postage costs they are incurring. Many justify it as a customer aquisition tool and therefore attribute the cost to marketing. Moving beyond 2014 I believe we are going to see less of these blanket offers as retailers establish themselves and no longer require Free Shipping to acquire new customers.

But remember, there’s no such thing as Free!
On a number of the larger international sites shipping may appear to be free but in reality it isn’t. Rather based on your location these sites are including shipping in the cost of the product. The added amount is usually based on the retailer’s average basket size meaning that if you as a customer place an order which is larger than the retailer’s average basket size, you actually end up paying more for shipping than you would if it wasn’t free.

So what do you think about offering Free Shipping? Is it working for you? What do you think the future is of blanket Free Shipping offers?

3 Reasons for Online Retailers NOT to offer Free Shipping

Think Cost Per Conversion not Budget when Advertising Online

Many of my discussions with businesses new to cost per click (CPC) advertising starts with the person saying “I have X dollars to spend” or “Look how good this is it’s only 10 cents per click”, but they are totally unaware of what their ROI is and they are not alone. This is the most common mistake people new to online advertising make.

Think Cost Per Conversion
Setting a budget in your advertising platform is important in case things go south but you must also measure your adverts performance and the best way to do this is to track your cost per conversion.

The cost per conversion can be measured as the cost per sale for eCommerce sites or cost per lead for lead generation sites and is as simple as calculating your total spend divided by the number of sales / leads it generated.  Most advertising platforms such as Google Adwords provide code snippets to help you track this metric.

Think about it this way, if my average order is $100 and I am happy to spend $20 per order then as long as we maintain a $20 cost per conversion I should have an unlimited budget because for every $20 spent on CPC advertising I am receiving $100 which based on my above premise is satisfactory.

At Booktopia, we don’t have a budget on our Google Adwords and we constantly remind our Google account manager of this. We would be happy to spend double the amount we currently spend as long as we can maintain (or better decrease) our current cost per conversion. This holds true for any new advertising platform that pitches for our business,  if they are confident they can meet our cost per conversion target, we are happy to give them a try.

Setting Your Target Cost Per Conversion
Every business’ “target cost per conversion” will differ dependent on their product’s margin and it should be costed in the same way all your other business costs are. Whatever you decide make sure you are clear on this target from the outset so you can measure your performance and review and adjust your advertising strategy as required.

Think Cost Per Conversion not Budget when Advertising Online

Mobile App or Mobile Site? A new thought from IRCE 2013

At IRCE 2013 one of the hottest topic this year was “2013, the year of the mobile”. With the penetration of mobile internet usage peaking over 48%*, and M-Commerce making up 11%* of online retail spend for Q1 of 2013, everyone agrees it’s finally here.

Of those attending the conference there were two camps, those who have a mobile strategy and those who don’t. For those of us that do have a strategy it was great to see the different debates that were taking place such as responsive vs non-responsive, a topic for a future blog, and outsourcing development versus hiring internal resources.

But for those just getting started on their mobile journey or reevaluating their current strategy, the mobile site vs mobile app debate was very interesting. There were the standard pros and cons presentations which I will summarise below, however there was a new thought put forward which was given very little attention and I believe is one of the most important points that you need to think about when getting started on your mobile strategy.

The Pros and Cons
The basic pros and cons of a mobile site and mobile app are well known and widely published however in the interest of completeness I will quickly summarise the main points here.

The main pros of a mobile site include:

  1. It’s easy for customers to access as they just need a web browser
  2. Can be integrated into your site and CMS easily
  3. Provides a cohesive experience for your customer
  4. Your developers only need a single technology skill set.

The pros of a mobile app being:

  1. The ability to access hardware functionality of a smartphone such as cameras and accelerometers
  2. The constant reminder to your customer of your brand as the app icon sits on their phone
  3. The ability for push notifications

With the cons of each of the above being the converse of the others pros.

The new thought, where does your traffic come from?
The new thought briefly touched on at IRCE but I think the most important is where does your traffic come from? Whether you decide to go mobile app or mobile site really should depend on how you are acquiring traffic and how frequently your users are returning to your site.

If your primary traffic acquisition strategy includes organic search or search engine marketing such as Google Adwords and Product Listing Ads then a mobile site is for you. This is because it is easier to direct a customer from these sources to a mobile site then it is to take them through an App Store and hope they download your app. A mobile site can also be optimised for SEO to give you more possible search listings then a single app download.

However, if your site has a high percentage of frequent visitors and could make good use of push notifications then maybe an app would be better. The benefit you get with an app is that it provides a customer with single click to access to your content and provides you with functionality to notify your customers of an event. A good example of a business that would meet this criteria would be a daily deals site which customers like to check daily. The push notifications allow the business to notify their customers of deals as they are released.

At Booktopia we have recently released our mobile site and chose this strategy for all the reasons mentioned above. We were able to develop our mobile site relatively quickly due to the close integration with our website which allowed for reuse of our website’s business logic. We also benefitted from our developers already having knowledge of all the required technologies as they are the same as our site. But most importantly, close to 70% of our traffic comes from search and therefore a mobile site is the best way for us to provide mobile content to our customers coming from these sources.

At Booktopia, we do have an app for both iOS and Android which supports our eBook business allowing our customers a seamless way to read their purchased eBooks, however our primary mobile strategy to provide customers access to purchase product from Booktopia is centred around our mobile site.

I hope this has helped those of you starting on your mobile strategy and would love to hear from others on your strategy and the reasons behind your choices.

*All statistics quoted are for the North American market. Australian usage is slightly lower but it gives us the advantage to see what’s coming.
Mobile App or Mobile Site? A new thought from IRCE 2013

Click Frenzy 2012

In the lead up to Mother’s Day Click Frenzy 2013  I was going through my notes from last year and found some of our statistics on how the Booktopia servers performed.

I thought it would be interesting to share this with those of you who are also busy getting ready for the hopeful onslaught.

Peak requests per minute: 19 000
Average requests per minute: 10 000
Average response time: 240ms
Average database calls per minute: 100 000

Good luck to all those involved this year!

Click Frenzy 2012

The Power of Trust Logos : The Proof is in the Numbers

Recently at Booktopia we performed an A/B test in order to ascertain whether our trust logos at the top of our site were still necessary. The following is a discussion of the testing process and the subsequent results. My hope is that by sharing these results you can understand the importance of trust logos on your site.

The Hypothesis
At Booktopia we don’t just A/B test things because we can, there is always some reasoning to justify the effort. This particular test was driven with the thought that removing our awards from our header would make it look cleaner and less cluttered. (Ask most graphic designers their opinion of our header and that’s the first thing they say).

A less cluttered header would make our search easier to find meaning more people would be inclined to search our site to find what they are looking for. With Booktopia fast becoming a well known name online our thought was that such visible trust icons were no longer necessary to convert customers.

The Variations
For this test we had the original page (the control) and a single variation with the trust logos removed. We setup the test to run for all users who visited our site, excluding crawlers (eg GoogleBot) splitting users 50/50 between the variations.

Original. With Trust Icons
Original Header

Variation
Variation. Without Trust Logos.

The Measurements
In this test, as with all our other testing, we measured a range of “Goals” however the most important for us in order to reach a conclusion were conversion rate, revenue per visitor and the percentage of customers who found and used the search bar.

The Sample Group
Our test ran across 194 817 unique visitors meaning approximately 97 000 people viewed each variation, which we believe was a big enough sample group to reach a conclusion.

The Tool
For those of you with your own sites who are interested in what tool we used to perform this test read on, for those who couldn’t care click here to skip to the results.

For all our A/B testing at Booktopia we use Optimizely. Optimizely is a dedicated A/B testing platform with a range of plans for the biggest sites right down to one man operations looking to have a bit of fun with their site. The most impressive thing about Optimizely is that once initially setup, you do not have to have any technical know-how to perform a test with the majority of testing requiring zero input from your web developers. To setup a test it’s all point a click including the moving, removal and adding of objects to a page. While this is no advert for Optimizely, I highly recommend them!

The Results!
The results were that our conversion rate decreased by 2% when the trust logos were removed and our revenue per order also decreased by 6% without the trust logos. Search use increased by 0.5%.

Conclusion
Our conclusion was to leave the trust logos in place. The fact that search did increase was actually irrelevant as conversion rate is the number metric I use to track our sites performance. Since conversion rate was impacted upon negatively there is no use even thinking about the removal of the logos.

We were actually quite intrigued that even though we are now a well known name in the online space, people still get a sense of comfort from seeing other more trusted brands like Telstra and BRW on our site. This just shows you that all trust logos including awards can have a dramatic effect on your website’s performance. So while they may not always look good they are definitely serving a purpose being there.

Future follow up for us here at Booktopia is to look to see if we can move our awards to another prominent place without effecting conversion rate. This would allow us to benefit from an increase in search while still maintaining our sales.

The Power of Trust Logos : The Proof is in the Numbers