The Role of Trust in E-Commerce Sales

E-commerce businesses have long struggled with finding the best strategies for optimizing the performance of their sites in terms of minimizing shopping cart abandonment and maximizing overall site conversions. These are laudable goals, but for many sites, focusing only on these issues and not looking at the bigger picture means leaving money on the table.

I spoke about this issue at length with Nigel Ravenhill, Director of Marketing Communications at ScanAlert, the people who offer the HackerSafe service. This service audits and certifies your Web site’s e-commerce infrastructure as being secure. Putting their logo on your site assures the consumer (or your B2B customer) that the information they submit to your site will be protected from, well, hackers.

Ensuring Web Site Security

HackerSafe has been subjected to A/B testing by a large number of retailers, where half of their visitors see the HackerSafe certification, and half do not. What were the results of these tests? Visitors who saw the HackerSafe logo converted at a 14 percent higher rate on average. Pretty significant.

ScanAlert has published additional research that provides further visibility into shopping behavior on the Web. What ScanAlert did was examine in detail the elapsed time between a user’s first visit to an e-commerce Web site (measured by setting a cookie), and the visit in which they purchased something (latent conversion delay). To make this more interesting, they started measuring this back in May 2005, and have continued to measure it through May 2007, allowing us to see how this behavior has changed over time. ScanAlert has participated in 480 tests by 470 organizations covering a wide range of e-commerce activities.

First, the basic numbers about the study:

Total Transactions 2,652,795
Total Visitors 128,264,941
Conversion Rate 2.07%

As you can see, the total number of transactions involved should be plenty to provide statistical significance. Also of interest is the aggregate conversion rate of 2.07 percent. This might be a number to keep in mind if you are looking to start a new e-commerce business. I would bet that 99 out of 100 business plans for e-commerce sites assume a larger number; however, 2.07 percent is more or less the state of the industry. That’s just a fair measure of how often people are ready to buy when they visit a site.

Here is a table showing the Latent Conversion Delay, and how it changed from 2005 to 2007:

Delay 2005 2007 % Increase (2005-2007)
>1 hour 50% 57% 14%
>3 hours 40% 44% 10%
>12 hours 35% 37% 6%
>1 day 28% 30% 7%
>3 days 21% 26% 24%
>1 week 14% 18% 29%
>3 weeks 4% 6% 50%

A few interesting points emerge immediately:

  1. Purchases taking less than 1 hour dropped from 50 percent to 43 percent. These are the purchases that may have taken place on one visit.
  2. Purchases taking longer than 3 hours grew from 40 percent to 44 percent. The majority of these purchases were probably multi-visit in nature.
  3. 30 percent of all purchases took more than one day. So if you are an e-commerce site, know that there is a lot of money on the table when it comes to capturing people for multiple visits to your site.
  4. People requiring more than three days went up 23 percent (from 21 percent to 26 percent).
  5. 18 percent of purchases took more than one week, a 28 percent increase from 2005.

So, what does all this tell us? Arguably, most of e-commerce purchases are based on more than one visit to an e-commerce Web site. Why would this be? Most likely, it’s because of comparison shopping in action. More and more consumers have the Web savvy to understand how to compare options, and they look at other places where they can buy the same goods.

The Importance of Trust and Safety

ScanAlert also did some additional tests of the impact of its HackerSafe service on these latent conversions. ScanAlert’s data show that for those people requiring more than three days to buy (24 percent of all purchases measured), the HackerSafe logo resulted in a 34 percent lift in purchases, as compared to a 14 percent lift overall. What this suggests is that trust and safety are major factors in the behavior of these more hesitant shoppers. So price is not the only issue at hand.

This suggests online retailers should look at strategies for projecting trustworthiness. For example, what does your About Us page have on it? Will it frighten users away or convince them that you are the real deal? Nigel also suggests that offering users an option to provide you with an email address is a smart idea. Users who are not ready to buy may be willing to hear what you have to say, and may well provide you with the opportunity to get back to them. Following up with an email containing a special offer is an excellent way to increase that latent conversion rate.

Finally, an additional note on the methodology. Given that cookies played an important role, we need to remember that this is a source of error in the study. However, a cookie deletion would result in the measured user time between first visit and conversion to appear lower than it actually was. In other words, some of the people who appear to have purchased in less than 1 hour in the study, in fact, took longer.

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