eCommerce in the Downturn

eCommerce in the DownturnHow design can create opportunityJanuary 2009 • Bill Westerman, Principal

Copyright © 2009 Create with Context, Inc. All rights reserved. 2

We are a strategic design and research firm focused on web, mobile, desktop,and consumer electronics applications

We help companies with complex, strategic innovation projects: reinventingexisting digital products, inventing entirely new digital products, and bridging thegap between physical products and the digital world

Consumer and business-to-business behaviors Ecommerce and social commerce Social media and communities Internationalization and multi-cultural experiences Multiplatform products

Our clients range from the Fortune 500 to technology startupsFounded 2005, with headquarters in Santa Clara, California, USA

Who is Create with Context?


Make it resonate

Background

Make it work


Background

Over the course of the last year, we’ve done hundreds ofin-home, in-depth customer research visits across the US

We’ve had the chance to speak in detail with peopleabout their lives within the context of digital design …

… and we’ve seen first-hand how the changing economy isaffecting the online purchasing behaviors of the American consumer

Goals andunderlyingmotivations

Behaviors Attitudesand beliefs

Wantsand desires


Background

Hispanic

Asian

Black

White US-born

Immigrant

Urban

Suburban

Rural

Chicago

AOL user

MSNloyalist

SF Area

20's

30's

40's

50's

Bookkeeper

Stay-at-home mom

Poet

Ex-convict

Human rightsactivist

Social worker

Dentist

Physician Public TV

GreenAccountant

Actress

Single mom


Background

We’ve found that the changing economy is affectingonline purchasing behaviors in two main ways:

We’ll start out by exploring how to makeecommerce resonate with customers in this economy

Make it workTraditionalecommerce concerns,such as usability andtrust, continue to beimportant factors inecommerce success

Make it resonateBut importantly,financial worries arealso changing howcustomers perceiveand interact withcompanies online


Make it resonate

Background and perspective

Make it work


Consumption is becoming more logic-drivenPeople are looking for things they require

Not as open to ‘lifestyle’ impulse buys

Tone down the big glossy frivolous picturesInstead, make it more transactional, more logicalProvide messaging about savings and longevity

Transition from emotional to logical

Aspirational contentdoesn’t resonate aswell with customers


Emphasize ‘good’ purchases

People are concerned about their jobs and their futures,but they’re willing to spend money on things that they

see as an “investment” in themselves,something that can make them more marketable

Highlight those aspects of your product that cater to this“investment” mentality, rather than improving their quality of life,

making them happier, making them more efficient, etc.

Implies that buying thisproduct can “empower”you to perform better

in your job

Doesn’t mention keyselling points: value,learning anywhere,getting things done


Very large discounts fall down a slippery slopefrom ‘great bargain’ to ‘something must be wrong’

Consumers don’t want to own something froma vendor they fear will go out of business

Don’t make sales feel desperate - rather, helpconsumers feel like you’ve always been doing the right thing:

watching costs, being economical, being their advocate

Don’t seem desperate

“60% off?Something must

be wrong.”


But make sure to provide bargains

At the same time, people are increasingly lookingfor bargains, discounts, and deals

And often the first place they go on ecommerce sites(and sometimes the only place) is to look for these bargains

Make it easy for consumers to find your bargains

However, keep in mind that having too many simultaneous deals(for example, free shipping + buy one get one free + percentage discount)

can be overwhelming from a usability perspective

Highlighted deals

Clearance browser


Difficult times mean customersʼ mindset shiftsMake sure your product responds accordingly

Banking, for example, is suddenly a source of stress:people are sad, mad, worried, and scared - all very strong emotions

Recognize customersʼ emotions and be supportiveProvide tools, forums, and reassurance to address their issues

Consider the customer’s mindset

These don’t conveysolidity and stability;they show happiness

and family values


Be up-front with everything

Trust in big companies is fading; companies can seemirresponsible, not trustworthy, and can disappear overnight

People think companies are trying to ̒ trickʼ them:added taxes, shipping and handling, batteries not included, …,

which has a visceral negative effect

To combat this, make relevant information easy to find,state costs and extras up front

+ shipping

Clear return policy In stock Free returns


Source:newnetworks.com

Be up-front with everything

And when companies do seem to be hiding things,people are going to get upset and tell others


Shipping feels like an extra “tax”, a frivolous charge thatcustomers are willing to pay for the convenience of online shopping

But in a down economy, this can be the final detractor

Provide free shipping, even if you have to reduce discounts to compensate

If you do charge for shipping, be up-front about costsWhen people find shipping is more expensive than expected

after entering their information, they get upset and leave

Free shipping is big. Really.


Promote online shopping as thrifty

One of the original promises of ecommerce was that loweroverhead resulted in lower prices; however, this message has

largely been lost over the years

Promote online shopping as the low-cost channelProvide web-only deals

Communicate to customers that you’re able to provide lowerpricing on your website due to lower overhead than physical stores

Airlines have focusedon driving traffic to their

own sites through‘lowest fares online’ “You’ll always get the

lowest … price,guaranteed.”


Embrace coupons, sales, and email

Especially today, people are looking for dealsSaving money, getting value for their spend

Provide easy-to-find coupons and discountsLet people share deals they find with their friends

Reward repeat customers: give them a personal discount code (People like to think they’re getting something that others aren’t)

And you’d be surprised how many people use unsolicitedemail as a way to find new online stores and deals


In the downturn, people are subdued, concerned, pensive;they’re watching their wallets, tentative, and worried

Bold, happy-go-lucky design no longer resonatesVisual design needs to ‘tone it down’ to match;

it should be calming and logical, not jarring or bold

However, feeling yoga-like or ‘zen’ can seem frivolousbecause time spent on relaxation is money wasted

Tone down the visuals

Calm andstraightforward

Possibly tooyoga-like,

too inspirational


Establish new guiding principles

An early step in the design process is to describethe feeling of the thing you are trying to create

Often, this is captured through two lists:what we want to be, and what we donʼt

Typically, these closely mirror the brand positioning;however, in a downturn they are more subdued:

YesStableSecure

ResponsibleRationalCalmingRelaxing

StraightforwardLogical

Not nowLifestyle-centric

OpulentFrivolous

Over-the-topVibrantExciting

ImpulsiveExtra


Make it resonate

Background and perspective

Make it work


Make it work

While functionality and usability has always beenimportant, it becomes essential during the downturn

People used to be willing to put up with a bit of confusion andinconvenience in their quest to make a purchase

But today, consumers are skittish, thinking about every dollarthey spend; the decision to make the purchase is hard enough,

especially if the product is optional in their lives

When the buy impulse comes, companies need to haverock-solid functionality and usability

Anything that gets in the customer’s way is enoughto break them out of the impulse mindset and let them

think “wait, I don’t really need to buy this”


Don’t give a reason to give up

It can take very little for the customer to give upEven minor glitches in usability or slightly confusing task flows

through the site, can break the flow and lose the sale

Server issuecauses page to only

partially load

Error messagedoesn’t “pop”, lookslike other non-error

text on the page

Error fields aren’thighlighted; people

aren’t always willing togo searching for them


Product forward, UI back

Consumers come to ecommerce sites topurchase things; everything else should be secondary

The experience isn’t about the brand, the logo, the message, thesplash screen, the store, or the fancy interface - it’s about the product

The user interface is simply a frame for the product


Engages the customer,encourages browsing

and serendipitouspurchases

Product photos arelarge and plentiful -making it easy tobrowse and buy



Lots of navigation, butlittle product to capture

the attention



Keep people in the purchase funnel

While shopping, makeit as easy as possibleto find (and bump into)

more product


But once they hit thecheckout, remove all

distractions fromcompleting the process


In the past, the checkout process was a common placeto present the user with other products to purchase

However, in a down economy, we want to ensure that peoplemake it all the way through the funnel to checkout,

by removing distractions from the process



Notice that all thechrome is gone,

leaving only things thatprogress the purchase

Product navigation hasbeen replaced by aprogress indicator

Open-ended ‘browse’navigation is replaced

with clear, specificinstructions



Like the previous site,this one also provides

various options fornavigation



But they remain visibleduring checkout,

distracting customersfrom completing the

purchase


Customer is required toprovide email address

to continue

Customer can buywithout registering,and register later if

they want

Don’t require registration

In customer visits, we often find that mandatory registrationcauses customers to drop off and never complete the purchase,

especially if the person isnʼt sure theyʼll use the site again


Cross-sell and up-sell after checkout

It is often recommended that companies put cross-sell and up-sell opportunities into the purchase

process flow in order to increase basket size before checkout

However, in todayʼs economy, this can derail the purchase process;one may think “wow, maybe I should be buying the better one”, or

“I really should get the accessory kit; maybe I̓ ll hold off until I can afford both”

Instead, move cross-sell and up-sell to be immediately after checkout;allow customer to instantly ʻupgradeʼ their existing order

Frame it as a reward: “thank you for your order - wenow have a special discount for you - would you like to add

this to your purchase as well?”

Find product Add to cart CheckoutPresentcross-selland up-sell


Use the confirmation page to drive signup

Now that the purchase is complete,attract customers with additional deals

More nowCross-sell and up-sell

More laterRegister with the site,sign up for email alerts

for deals; send them thecross-sell and upsell


17 rules of thumb for ecommerce in the downturn

Make it resonateTransition from emotional to logicalEmphasize 'good' purchasesDon't seem desperateBut make sure to provide bargainsConsider the customer's mindsetBe up-front with everythingFree shipping is big. Really.Promote online shopping as thriftyEmbrace coupons, sales, and emailTone down the visualsEstablish new guiding principles

Make it workDon't give a reason to give upProduct forward, UI backKeep people in the purchase funnelDon't require registrationCross-sell and up-sell after checkoutUse the confirmation page to drive signup


Our proven process provides a clear path from research to design, drawing oncustomer insights to generate things that people will want and use

For further information or to receive periodic reportssuch as this one, please [email protected]

For new business inquiries, please contactBill Westerman, [email protected] +1 408 834 7601 ext 24

DesignDeliver keydesigncomponentsand helpensure userfocus duringdevelopment

ConceptingRender ideasinto tangibleconcepts foruser testingand funding

IdeationGeneratedozens ofideas andselect thosethat are mostcompelling

ResearchUnderstandthe customerand businesscontexts

StructureDefine thebusiness needand structurethe project

How Create with Context can help you

Thank you!Find us on the web at createwithcontext.com

Websites and products mentioned in this report are shown as examples, and their inclusion does not necessarily indicate that these companies have been clients of Create with Context.Images and other materials incorporated into this document may be copyrighted by their original owner, and are included within under the doctrine of “Fair Use”.

eCommerce in the Downturn

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