Bad Usability Vs. Good Usability

While there is much discussion on this topic identifying one from the other is not so hard:

Good Usability

Bad Usability
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What Is The Next Channel Opportunity?

There has been a lively discussion on the true identity of the online shopper.  One of the most prevalent beliefs is that if all the potential shoppers were grouped they could be neatly divided into two groups, one that shopped online and one that didn’t (with little or no overlap).  I have a problem with this theory for two reasons: one is that it forces marketers to deploy two different strategies because the assumption is online shoppers have a different set of motivations.  The second reason I am in opposition to this dichotomized view is that it’s flat out wrong.

There is significant overlap between online and offline shoppers.  I’d go further and say that the ‘overlap’ is the fastest growing segment.  I’d go even further and describe this ‘overlapped’ demographic: I believe these customers first shop offline and then (gradually) migrate online.  This migration represents a significant strategic opportunity for retailers not only because it’s a more efficient channel but also because it is completely measurable.  Therefore, I would invest a big chunk of my budget toward facilitating this migration.  Defection at this stage is the most dangerous kind because it represents a permanent change in behavior.  Of all the metrics available to retailers the “% catalogers that transitioned online” and “% store shoppers that transitioned online” is the most important.

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Nearest Store Location

While trying to find the nearest store location for a footwear company I was given the following options:

Are you selling magic shoes?

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What Heinz Discovered

Retail merchandising strategy is almost completely governed by the principle of price elasticity.  It follows that if price of a product is increased overall units sold drop and vice versa.  But this is not always the case.  Heinz discovered by increasing the size of ketchup bottles from 24oz to 36oz sales increased with no reduction in buying frequency.  Turns out consumption of ketchup follows its own convention.  Mothers buy ketchup for kids so when there’s less than 3/4th left they ask their kids to go slow and consumption rate falls.  With the 36oz bottle 3/4th is still a lot.  When consumption was viewed side by side it was discovered they got over at approximately the same time.  The replacement of 24oz with 36oz helped Heinz increase ketchup sales 13%.  Kaching.

Related article: Price Elasticity Parabola

 

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Not Either Or

Every time the cash register rings two kinds of analysis are possible. The traditional way is to look at the transaction itself (size, frequency, category etc). The alternative is to measure everything leading up to the purchase; things like, other products considered, time taken to make purchase decision, customer history etc. Retailers should look at both.

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Offline Vs. Online

My previous post about bluenile.com has gotten me thinking. The fact that an online retailer (with 0 offline stores) is able to generate 5 times the online revenue of its closest rival (which happens to have 2,700 offline locations) should be a lesson to retailers who believe selling online is hard because browsers can do a Google searches to find cheaper alternatives. Maybe it’s just me but when I find the right product I don’t try any harder to find price alternatives online than what I would in a retail store. If that were the case I’d have set walmart.com as my homepage. The truth is that online customers are no different from their offline brethren.

The other fact that retailers often forget is that brand loyalty is not something that only benefits them; it also benefits discerning customers because it allows then to build a trusted network of sources for products and services. To assume the same customer would be loyal offline but not online is flat out wrong.

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The Cardinal Rule

Compelling online experiences (not traffic) drive sales. Consider a company like BlueNile.com which is able to generate annualized web revenues of $169 Million through just 739,000 online monthly visitors. Translation: every customer that walks into bluenile.com (with or without an intention to buy) ends up spending $19 dollars (and change) at the store. That’s a really big deal and I believe it is heavily influenced by BlueNile’s ability to create a truly compelling and differentiated online experience. Instead of throwing money at just bringing people to their site BlueNile has chosen (quite wisely) to focus on making sure that those in their store end up buying.

Update: Since I wrote this post I received serious flack for my elders. They attribute this $19/visit to the expensive items at bluenile.com. I disagree. This figure was derived by a numerator (revenue) and a denominator (buyers). Because wedding rings are a high consideration item it follows people look around quite a bit. This inflates the number ‘just browsing’ visits (denominator) to bluenile.com thus effectively canceling the effect of the numerator. Comments? opinions? please share.

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Valentines Day Scam

Retailers pay a lot of attention to store walk-ins; in fact they can rightfully claim to be experts. But they don’t know diddly squat about customer service. An example. Through I steer clear of the Valentines Day scam this year I decided to get something from RedEnvelope. Click click and I was at the shipping options page (this was turning out to be easier than I thought). The system presented 3 options, slow shipping, quick shipping and delivery on Valentines Day. I clicked option 3. Obviously. Imagine my shock when last night (on the 13th) I get my ‘thank you for the lovely gift’ call. I paid RedEnvelope 90% more (for shipping) to do just one thing and they screwed that up. Why spend 6 bucks on customer acquisition when service is so bad that customers have no incentive to return?

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Personalization

I’m not much of a gift giver but when I do end up gifting I like to make it as personalized as possible. For Valentines Day I bought love ‘fortune cookies’ from redenvelope.com which I thought were very cute. I would have liked it even better if I could have attached a handwritten note with the gift, something to show the gift was beyond the convenience of online shopping. If RedEnvelope presented an option for me to write a note, scan and upload it it would have made the buying experience that much more special.

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Incompetent Customer Service

Shipping notification email –

According to UPS the Package was delivered on 1/9:

Considering FTD.com gets 2.1 Million visitors a month I would say this is a pretty big problem.

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