Thursday, January 9, 2014

Are Discontinuous Purchasing Funnels a norm in eCommerce?


We all talk of the customer journey or purchasing funnel at some point or the other. There are models that start with awareness. And some models start at basics like ability, opportunity and motivation to define the universe before that. Then from awareness, there is interest, there's decision and action. Multiple models exist to talk about similar flows. Then there are models that talk of marketing building a flow of consumers to your store, visual merchandising bringing them inside and engaging them, supply-chain ensuring the product is on the shelf and sales to ensure the customer makes the purchasing decision. One needs to be good at all the funnel acts for awareness, or need, to culminate in a transaction.

If you have a broken link, all other good effort is wasted. Do good marketing, have bad product-development, and you only get dissonance or ridicule, but no transaction. We all believe in this.

Now the interesting aspect you see in eCommerce - what happens when your funnel is better or worse than someone else's? Can a good section in the funnel compensate for a bad section that is later in the flow? What happens if you have good awareness, a great product experience, the widest range, great decision-aids, but not-so-great prices?

In the offline world, of-course, there's a high cost for the consumer to switch. Just because the end of some retailer's funnel isn't the best, the customer won't walk out of the store, take the elevator to the basement, drive out his car after paying for parking, drive through crowds to get to another mall, park in that basement, take the elevator to another outlet, and start flowing through that other funnel. The online world, of-course, bridges distance.

There are five tabs simultaneously open.

It is no additional cost for the consumer to start product search in one tab, price search on another, feature comparison and expert advise on the third, and use a fourth tab for transactions. Post the advent of price comparison, at least for standard, definite, cataloged products, it is possible for an eCommerce platform to be best at nothing but prices and still do well on transactions versus another platform that provides the best decision-tools but higher prices. Now with the democratization of prices, offers and coupons, it has started affecting offline retailers as well, though their leakages for reasons talked about earlier are lower.

So, that is perhaps the lesson to be learnt. The parts of the funnel that contain key decisions are key. Everything else is not. When your website is good for everything else but conversion, then unpleasant as it may sound, you're not in business - you're just an affiliate.