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CRO in a connected commerce world

Why effective optimisation needs to be defined and led from the very top

Boosting conversion is at the heart of any retailer’s business and it’s no surprise since small changes can deliver big results. “For me it’s one of the most important things I look at right now,” says Brian Mak, chief marketing officer at Wauwaa. “If you have 1,000 people come to the site and five purchase I have a .5% conversion rate but if I have a 1% conversion rate I have doubled my revenue without doing very much,” he says. And of course this is the pure principle of CRO – done correctly it’s much easier – and more importantly cheaper – to optimise your conversion than it is to send more – and perhaps irrelevant – traffic to your site.

The focus has long been purely about the sale but increasingly retailers are concerning themselves with conversions such as account creation, email sign-up, the creation of an account, an app download or even micro conversions such as a Facebook Like.

At ShopDirect the company has been working hard to bring CRO to the heart of its business over the last couple of years. Jonathan Wall, group ecommerce director at ShopDirect, admits it’s no easy task. “Most of the retailers we speak to are moving down this road but none stand out as nailing it yet I’m afraid. It would seem the smaller the better and the major retailers are just getting the basics right, such as which testing platform to use,” he says.

Defining CRO

Of course retailers can’t deal with conversion rate optimisation until they have actually defined what it means for their business, but many are still struggling to understand. “The label CRO is only a few years old, and although it’s clear and catchy it risks limiting itself by its label. Optimisation can be applied far outside conversion” says Paul Postance, former group head of ecommerce conversion at ShopDirect and latterly head of digital conversion at EE. He believes that optimisation should be embedded in any business as a constant iterative improvement mechanism, not an after-thought or someone’s pet project.

The strict definition embraced by many is simple: “A conversion in its simplest sense is based on the ratio of sales to visits, specifically the number of orders divided by the number of visits to our various web, mobile and other sites (apps for example),” says Robin Worthington, multichannel director at Office. “Whilst customer behaviour and the ecommerce landscape have changed enormously, using this basic measure of conversion is a constant that allows us to track and compare performance over time. Conversion rate optimisation is therefore hugely important,” he says.

But even Worthington admits this is too simplistic a definition for those choosing to embrace it across their business in the connected commerce world rather than just online. “In practise, the definition of CRO is far more complex, as every action we take across the customer journey is in some way designed to optimise conversion; from the text we run in Google Ads to the position of buttons during site checkout. It is the combination of many interwoven factors that results in the final ‘sales’ conversion,” he says.

“Conversion is not just a simple calculation of visits divided by transactions.”

Kevin Sears, Bathstore

Kevin Sears, head of online at Bathstore, says it’s a more complicated measure. “Conversion is not just a simple calculation of visits divided by transactions, we have many other metrics we measure such as visits to the store locator, design consultation requests and installation requests to name a few,” he says.

“The reality is that customer journeys are not so simple; the path to purchase can involve multiple visits over many days and potentially on different devices,” says Stuart McMillan, deputy head of ecommerce at Schuh. “Not all visits to website have the potential to convert,” he says.

At ShopDirect the business doesn’t much care for the CRO label. “CRO as an acronym doesn’t get used much within our business as we call it experimentation but it has the same output of improving conversion rates and experience for our customers,” says Wall.

Sam Barton, head of user experience at ShopDirect, explains why. “CRO suggests one or two or few large-scale measures. Experimentation is more longer term looking at a programme of activity across the whole website,” he says.

At Majestic Wine online optimisation manager Stephen Green also takes a broader view of CRO, preferring to refer to it as optimisation instead. “To me optimisation is about improving all business processes in order to reach the maximum number of potential customers at the lowest cost and offer them the best possible service and experience. I find the term ‘conversion rate’ can be too restrictive, especially within a multi-channel business, and often focuses attention on the checkout funnel or does not consider the post-sale experience,” he says.

At optimisation efforts have delivered huge benefits for the business and Ollie Scheers, optimisation manager at the company, says this is largely to do with the fact that its optimisation activity is not just focused on conversion. “We view our activities as more aligned to customer experience optimisation, which can cover anything from increasing average order value through targeted cross-selling, improving the ability to contact sellers, increasing social sharing, encouraging repeat visits, etc,” he says.

McMillan also believes that a more sophisticated view needs to be taken. “Where I’d like to be is the situation where we measure conversion rate per visitor not per visit, and in fact I’d like to measure conversion rate per prospect instead of per visitor, where we consider whether the visitor has any intention of making the sale. So, 100% of visits definitely won’t turn in to a sale, but a higher number of visitors should turn in to a sale, and an even higher number of prospects should turn in to a sale. This is something all retailers should be working towards — a much more nuanced understanding of their traffic,” he says.

Leading from the top

However you want to term it CRO needs to be embraced across all thinking of the business. “CRO needs to be granular, every single interaction with your customer needs to be optimised, while at the same time maintaining a unified, consistent experience,” says McMillan. This means that retailers need to embrace CRO at the highest levels.

At Wauwaa Mak says it’s something he champions. “I’m always pushing this topic and will continue up to the point that CRO is exceeding 10% – then there’s not much to do but until then I will keep pushing it within everyone in the business from top to bottom,” he says.

Our interviews showed that for most retailers CRO is the main concern of the marketing and ecommerce teams but real success comes from empowering all within the business. At Office each individual in the multichannel team has responsibility for CRO within their own area of experience. “For example, the PPC and SEO teams are responsible for ensuring the customer journey from search is optimised to the point of conversion. Likewise, the CRM team will test multiple versions of emails to ensure the highest click through and sales rates. And they in turn will work closely with the site designers and UX specialists to ensure that the commerce sites themselves are set up in the best possible way to aid conversion,” says Robin Worthington, multichannel director.

The realisation, throughout the company, that small gains in conversion percentages can mean significant additional revenue means that conversion is discussed at every level – including the board who will sign off significant new CRO initiatives.

The same is true at footwear retailer Schuh. “CRO is appreciated at the very highest levels within Schuh,” says McMillan. “UX and CRO have been equated to good customer service which is one of the main pillars of our business,” he says.

Green says the senior and more junior staff within his business actually look at CRO – or optimisation as he terms it – quite differently but both still realise its importance. “Optimisation, especially when tied to revenue, really sits at the heart of any business. Whilst board-level directors can appreciate optimisation as an ongoing strategy, colleagues discuss it in terms of projects, their involvement and the success they generate,” he says.

However whilst retailers realise the importance of discussing and pushing CRO from the highest levels of the business only a small minority actually had dedicated optimisation staff – showing perhaps that more recognition is needed yet.

Paul Rouke, founder and director of optimisation for full service conversion optimisation agency agency PRWD says that retailers can face a challenge into making the cultural changes required to push such projects and to embrace the testing philosophy that allows CRO to be maximised. “We have seen some retailers do some testing and then not any for six to nine months but testing is a cultural change and is something that needs to be embedded in the business. It needs changes to the cultural mindset and mentality of the company,” he says. Instead he says successful projects should be led by a senior person that is able to make effective change. “Most successful projects have a senior champion to do the testing and get the buy-in,” he says.

It seems the more senior that person the more likely that strategy is to succeed.

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How to begin a retail CRO project

With roles that have included head of digital conversion at EE as well as having also worked as head of ecommerce conversion at ShopDirect CRO and implementing CRO is a key part of Paul Postance’s expertise. However he admits putting in place a CRO strategy – and ensuring it sticks across the business can be tough. “I always start with a gap analysis of what resources exist or are needed, inputs and building key relationships, then make an agreed approach and plan deliverables – but in an agile way and as rapidly as possible,” he says. “The point is to start grabbing the low hanging fruit. I calibrate analytics with AA tests then go for simple but high impact splits and use the results to educate and gain interest internally,” Linking testing with marketing spend, product managers, design and development communities and others is vital. The more data inputs the better informed tests will be – from click activity, heat maps, web chat into slower but more qualitative sources like focus groups and research panels,” he says.

Although external expertise and support is vital internal expertise is also important for making CRO work, according to Postance. “I always advocate having as much skill inside the business as possible and building a knowledge archive. Dedicated internal staff have the relationships and knowledge to help bring CRO into hearts and minds rather than be an external ‘add-on’ someone manages. In a very small organisation this could be just one person, or in a large one heading up a whole department,” he says.

When it comes to reporting it’s a case of the more metrics the better, as long as it’s not prohibitive to report on them or take action. But equally a good CRO strategy shouldn’t ignore common sense and other factors too: “A fantastic process I worked with was at Shop Direct where an internal tool showed customer level split test results as well as the third party tool we used. One account creation split test showed a conversion increase (measured by onsite activity), but longer term customer analysis with our internal tools showed the effect was actually a decrease in profitability as those new customers became dormant or churned more than before. This wouldn’t have been found going by the split test tool alone,” says Postance.

For the most effective implementation of and increased likelihood of success for a CRO strategy plans, decisions and results must be shared to ensure everyone in the business is kept up to date with progress. “I find that as long as people can see the roadmap and where their favoured test is or why it isn’t on it, they are engaged and it’s a collaboration not a contest,” he says.

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