Mele’s Musings

In E-Commerce, More Is More

We’ve been hearing this for a long time, but ecommerce sites need to be more than just transactional sites – customers want information, and those who can give it to them will win.

Article excerpt: Many business leaders, disappointed by online sales growth, see Web consumers as disloyal and unwilling to spend. But that’s because the managers are not exploiting what customers value most: engagement. Online automobile shoppers want information about cars, yes, but they also want to learn about such other topics as travel, sports, apparel, and finance, our research shows. Online shoppers for upscale clothing might typically want information on art or even business. Most firms limit their sites to providing narrow information about the products or services that are for sale. Indeed, the majority of managers we spoke to in our global study told us they believe that a broad array of information diverts attention from the core offerings. But we found it helps customers search for solutions, invites them to think of all the ways the core products might add value to their lives, wins their loyalty, and entices them to buy. In fact, we found that exploiting consumers’ desire for engagement is the single dominant driver of superior shareholder value for e-commerce companies.

The rest: http://harvardbusinessonline.hbsp.harvard.edu/

Musing: Well, if Harvard says it’s true, you know it’s true! I love that they use Tobin’s Q (thank God for the EMBA program) to prove the value of deeper information on related products and services. (A good, simple explanation of Tobin’s Q is here http://www.investopedia.com/terms/q/qratio.asp). I also love that the article points out the value of consumer control – rather than guessing what content they want, ask them, or let them tell you. We have to start embracing the real power of this internet thing! Whadda you think?