How many daily retail site visitors purchase? Maybe ten percent convert to a purchase, but that leaves nine out of every ten visitors leaving to continue their research and possibly purchase elsewhere. It’s for this reason nearly every online retailer is obsessed with its conversion to sale metric. They look at every site change under this lens.

However, that may not be the right way to approach an ecommerce site. Digital shoppers are perennially in research mode, soaking up every bit of information to make an informed decision. Retailers are therefore digital publishers, aggregating large audiences who are coming to be educated and exposed, to learn, and to purchase products. Thus digital is a channel that needs user segmentation, rich content, promotional elements, and a holistic yield approach to best serve both visitors and bottom line margin.

Segmentation

Nearly every retailer does some form of site visitor segmentation. This may be simple using content management tools like Monetate to rotate promotions and constantly A/B test the site experience. Others layer in buying habits and category preferences for users. Today collaborative filtering is standard for major retailers.

The late 2000’s saw a proliferation of product level content such as ratings and reviews that drove higher conversion to sale because it provided a user confidence with their purchase decision. Currently there is a wave of incorporating manufacturer feedback such as question and answer functionality and third party buying guides into the experience. Each of these trends are driven by micro but real conversion gains, and each have improved the online retail shopping experience. But they still leave approximately ninety percent of visitors to reach from a margin standpoint.

Content/ advertising

That brings us to promotional content. Fifty-seven percent of consumers are open to ads while on shopping sites, compared to only 25% while reading information, news, or blogs. Why is this? For the same reason that product reviews, ratings, buying guides, and other forms of content help consumers decide what to buy, advertising in both traditional form (banner ads) and native (text links, brand showcases) are welcomed by shoppers looking for purchase validation and options.

Deep product content and advertising not only complement the shopping experience, but also deliver the right message to the shopper when they are most in need of that message. They reach the shopper when they’re already in “buying mode,” and in the process work together to help maximize revenue per visitor.

Shopper media

Shopper media or commerce advertising channels are still nascent but rapidly evolving. The concept is far from untested as Amazon reportedly generates more than $500M in advertising revenue, and eBay has been on a tear announcing various aspects of its advertising strategy as a fast follower. These two demonstrate a trend that purchase funnel advertising is highly valuable and synergistic with both your users and manufacturer vendors, driving value for the entire ecosystem. That’s the important point: Advertising should be considered part of the site content, rather than an intrusive interruption to the shopper experience. Along with the other content components leveraging user segmentation, it provides a holistic revenue approach to all visitors.

Personalization

In the future the product, shopping cart, and confirmation pages will all be dynamically generated based on the past behavior of the shopper. The unique content will be user-generated content, manufacturer content and promotion, competitive pricing, and advertising that’s contextually relevant and synergistic to the individual shopper. Amazon (a competitor to most online retailers) has long customized the shopping experience based on what a shopper views and purchases, and in 2007 they added advertising as a way for brands to communicate with shoppers. They found that by offering advertising they could improve the utility of their site for visitors and brands, and in the process increase monetization for the overall business that they can invest in new products.

Even generic segmentation (loyal, high value customer vs. first-timer) applied to a publisher centric revenue model can be a huge. It allows retailers to provide a unique promotional experience to a user who hasn’t purchased before vs. one that routinely visits several times before they make a purchase. The revenue from selling this ad space to vendors can be used to increase customer acquisition or reduce product pricing to compete in the marketplace.

Still, many aren’t thinking about a holistic revenue approach to segmentation that optimizes not only for conversion but total site yield, incorporating the value of internal promotions, vendor promotions, and traditional advertising. Digital conversion rates will always significantly trail offline rates; it’s a core unique trait of the channel. Customizing the site experience and re-investing incremental revenue from shopper media will make up for those lower online sales, increasing the bottom line.

Retailers that don’t offer a holistic content and monetization approach to their users will find the marketplace more and more competitive, as their competitors funnel higher margins into technology, marketing, and better financial results. Start thinking as a publisher in digital by adding more content and advertising, and view every visitor through the prism of who they are as an individual.