Summary
1)As the fastest growing sales channel in retail, the stakes are high but the rewards of increased revenue generation are even higher for retailers who continue to develop customer friendly websites. 2)Although the Top10 e-tailers consist of some of the largest multi-channel retailers in the US(Staples, Office Depot, Sears, OfficeMax, et al), the fastest growing segment are smaller niche retailers who specialize and know what truly makes their customers tick. The internet can truly "level the playing field" between smaller, start-up companies against the giant chain retailers. 3)There are many factors of differentiation that separate the best of the e-tailers from the rest; perhaps the most compelling differentiator today is serving a "niche" customer(ex.Costco focus on high income, college educated consumer and Blue Nile who focuses on men who shop for high priced jewelry for occasions such as engagement).
Analysis
Thoroughly understanding what customer you are after and then designing a web site based on every facet of that customers needs may not produce perfection, but will provide the e-tailer with the closest offering possible of a design and operating based model aimed to attract and retain customer base. Last year, online sales reached $136.2 billion, up 25.9% from the previous year; however, what made LY different than previous years was that e-tailers in the Top 500 grew sales by 21.3%, while the rest of the pack including smaller companies, non brick-and-mortar and start-ups with sites open at least a year grew by an astounding 29.9%. These statistics prove out one thing---there is still plenty of room to grow in the industry for those who can find the right combination of product differentiation, niche marketing, demographic advantages or fad/hot offers. Perhaps the easiest way to define "best practices" would be to highlight characteristics of some of e-tailings most popular, topline revenue heavy producing websites in the multi-channel group, i.e., Staples, Office Depot, Sears, Best Buy, JCPenney, and OfficeMax amongst others. Within this group, customers have found the following advantages/differentiators and have responded loudly with the plastic in their wallets:
1)Site availability/easy navigation 24/7
2)Great everyday values
3)Free shipping
4)Limited time exclusive offers
5)Coupons redeemable across all channels
6)Expanded payment options
7)Gift registries
8)Personalization such as online chat availability
9)Pick-up of online orders at retail store locations(Sears and Best Buy)
Smaller and non multi-channel retailers have been able to grow, take share and increasingly satisfy customers through the following enhancements to big box e-tailer offerings:
1)Focus on a particular niche such as higher income/demographic web users
2)Being a specialist vs a generalist in terms of understanding product lines and the segment of the demographic most likely to use the line
3)Better command of "search" marketing like Google than their larger e-tailing counterparts
4)Niche retailing that focuses on education, income bracket, available time to shop and scheduling preferred product arrival dates on shipping if purchased as a gift
Although many best practices have already been established as differentiators, I do agree with Michael Ross's analysis that it is "too early to say whether there is a best practice". E-tailers must continually push themselves towards innovation in product, ease and appeal of website, conversion of site visits into sales revenues and ultimately, loyalty to the brand. Once this is reached, sustained success and growth is not a guarantee. New levels of differentiation will need to be constantly sought as there is little, if any, room for complacency and resting on past laurels in the fast paced e-commerce sector.
