The online shopping extravaganza that occurred on Cyber Monday reconfirms e-commerce as a lucrative, growing field. Since Building Keystones is passionate about empowering people to succeed in this ever growing industry, we continue our mission to bring you digital e-commerce expertise on a wide range of topics with the November Blogger’s Digest.
This past month we gave advice about optimizing shopping carts for customers across the globe, provided tips for guiding traffic with domain name portfolios, shared some best practices in analyzing business performance, and highlighted the benefits of social media for special holidays.
Additionally, we are currently offering you the Gartner Magic Quadrant report for e-commerce, so go ahead and click that link to receive your free download.
As always, we encourage you to take part by asking questions or sharing your experiences in the comment section.
Occam’s Razor – Smarter Data Analysis: This is a complicated read that requires some active participation, but it is well worth it. Google’s recent changes to their Analytics service now lists a significant amount of your keyword traffic as (not provided). Although we cannot determine what keywords comprise this new group of traffic sources, Avinash Kaushik has provided a few handy custom reports to help us understand how that traffic is performing.
Practical Ecommerce – Google + Launches Pages for Business: Earlier this month, Google opened their social networking site to businesses. This post examines the benefits this change brings to message segmentation and SEO, as well as the challenges of monitoring and updating yet another social networking site.
Personal Dividends – Are You Pricing your Products TOO Low: Here is some food for thought about the value of partnering with daily deal sites versus offering your own coupons. This post also discusses the importance of matching the price of your product with your brand image.
Hubspot – Why YOU Are Your Business’ Most Qualified SEO Expert: Don’t assume the keywords you target are optimal just because they seem natural to you. As with many business decisions, you must test your hypothesis against actual results to ensure they are correct. One key take away from this article is that even similar keywords can yield vastly different search results, so go ahead and start googling yourself.
GigaOM – With Friends Like SOPA, Who Needs DMCA & IdeaLab – Why Backers of SOPA Say It Should Pass: Without taking a stance on either side of this debate, I felt it was important to draw everyone’s attention to an important piece of legislature that is currently being debated in the US Congress. If this bill passes, it will certainly change the way individuals and companies interact online, so we encourage you to take the time to research this issue and formulate your own opinions.
We hope you all had a terrific Black Friday / Cyber Monday week and that your successes carry on into the holiday season and beyond!
Go ahead and “Like” our Facebook Page or follow us on Twitter. We’re going to be offering more e-commerce news, trends, tips and tricks throughout the coming weeks and months.
Psychological pricing research suggests that product prices should be rounded to odd numbers (9, 5 or 0) in order to decrease e-commerce friction. A Marketing Bulletin study from 1997 found that 97 percent of all product prices ended in one of those three numbers. Considering the global reach of digital product e-commerce, pricing your product in local currencies is also important to prevent lost sales.
Most people go about their day-to-day lives carrying around one currency in their pocket. They are familiar with how much things cost or are able to make a value judgment at a store as to whether they can afford (or are willing to pay) the advertised price marked on a product.
In the online world, it’s very likely that people will shop outside their region without even knowing, because there are few borders for international selling. With this in mind, what does someone, who is used to seeing one currency, do when confronted with an unfamiliar currency? Most users at least pause, if not abandon, because a product’s price is not shown in their familiar currency.
The vast majority of U.S. customers are unfamiliar with spending money in any currency other than the U.S. Dollar. Seeing a Canadian Dollar, Euro or British Pound price will surely cause at least the 72 percent of Americans without passports to struggle to calculate what the cost is in U.S. Dollars, facilitating cart abandonment.
Similarly, the 75 percent of Japanese who don’t own a passport would also pause when presented with a U.S. Dollar, Euro or British Pound product price. Furthermore, the German population with 71 percent not owning a passport will probably be pretty unhappy about paying in British Pound, U.S. Dollar or Japanese Yen.
On the other hand, 76 percent of the UK population didn’t have passports in 1984 compared to just 20 percent not holding a passport today. So, are British citizens less sensitive to prices set in currencies other than the British Pound?
Passport Penetration by Country
During the first wave of e-commerce, selling globally in a single currency was accepted. Companies required customers pay in the currency from where the company was based. The obvious drawback is customers’ unfamiliarity with the real cost of the “foreign currency.”
The second wave of e-commerce resulted in many companies using a floating exchange rate to automatically calculate the price of a product based upon that day’s exchange rate. This practice addressed the issue of customers knowing how much a product costs but results in unfriendly “crooked” prices (see image below). Depending on how you manage product marketing pages, this practice becomes a management challenge because the prices may or may not be pulled from the same place in your system, resulting in duplicate work.
Smith Micro Cart with "Crooked" Prices (click image to enlarge)
Your customers should see product prices in clean, rounded numbers to further simplify the purchase decision-making process. If you show a European Union customer a product priced at €23,81 rather than a more customer friendly price of €25,00, you are increasing e-commerce friction unnecessarily and making them aware of the fact that your company is obviously not located in their home country.
VMWare Cart with "Crooked" Australian Dollar Prices (click image to enlarge)
Once you decide to price your products in clean, round numbers, the next thing to consider is pricing your product not only based upon the exchange rate of that local currency, but also based upon what the local market will bear for your product.
Keystone: Decrease e-commerce friction and cart abandonment by setting prices in clean, round numbers in every local currency, and don’t forget to price your products appropriately for the market.