Online commerce accounted for nearly $518 billion in revenue in the United States alone last year. The growing number of online marketplaces like Amazon and eBay will command 40% of the global retail market in 2020. As the number of digital offerings — not only marketplaces but also online storefronts and company websites — available to consumers continues to grow, the primary challenge for any online platform lies in setting itself apart.
The central question for how to accomplish this: Where does differentiation matter most?
A customer’s ability to easily (and accurately) find a specific product or service with minimal barriers helps ensure they feel satisfied and confident with their choice of purchase. This ultimately becomes the differentiator that sets an online platform apart. It’s about coupling a stellar product with an exceptional experience. Often, that takes the form of simple, searchable access to a wide variety of products and services. Sometimes, it’s about surfacing a brand that meets an individual consumer’s needs or price point. In both cases, platforms are in a position to help customers avoid having to chase down a product or service through multiple clicks while offering a better way of comparing apples to apples.
To be successful, a company should adopt a consumer-first philosophy that informs its product ideation and development process. A successful consumer-first development resides in a company’s ability to expediently deliver fresh features that customers actually respond to, rather than prioritize the update that seems most profitable. The best way to inform both elements is to consistently collect and learn from customer feedback in a timely way — and sometimes, this will mean making decisions for the benefit of consumers versus what is in the best interest of companies.
Taking a customer-driven approach to platform improvements
According to research from Salesforce and Publicis Sapient, 57% of customers say that, with price being equal, customer experience drives where they shop. Customers surveyed in the report cited product availability, variety and even inspiration as top drivers. Marketplaces like Amazon and eBay draw an increasing number of those customers thanks to the respective front-end experiences they offer.
To continue to attract consumers (or win them back) with experience, marketplaces and other online platforms need to understand which obstacles stand in the way of users quickly finding what they want or need — and then work to remove them swiftly. Whether these obstacles are rooted in uncertainty of the product itself or anxiety over the purchase process among other common online-shopping obstacles, a company needs to quickly identify and take steps to remediate these issues. This can be accomplished through a number of mechanisms such as usability studies, that help developers see, during early iterations of a feature or update, how a test group of consumers respond to given solutions on the site — and see if they run into challenges or confusion. Additionally, A/B tests help developers compare feature variations for viability on the site.
This rapid iteration approach to making site improvements or develop new features can and should be applied by all consumer-facing platforms that are looking to remove obstacles impacting user shopping experiences. For example, uncertainty regarding quality is often an obstacle for consumers in the buying process. A better experience on the site can help consumers feel more confident in making a purchase — but removing their anxiety can be done in a variety of different ways, from providing better transparency in the listing itself to product reviews to a selection of products broad enough to ensure consumers feel confident that their ideal product is not “somewhere out there” if they leave the platform. So which should companies pursue?
At CarGurus, we constantly work to ensure our platform removes as many anxiety-inducing obstacles as possible — whether that involves ensuring we have the largest amount of inventory, providing price transparency or promoting listings that correspond to proven dealers. Removing obstacles during the testing phase is as much of a continuous exercise in improving a product as it is a core company and product value proposition that guides future development efforts.
Tapping into customer data without invading data privacy
The simplest, and most important, ethical guideline to follow when leveraging customer data (and this is reinforced by many of our data privacy and data-handling regulations): Avoid using any personally identifiable information when conducting platform-wide analysis and ensure all such personally-identifiable data has appropriate access restrictions in place. Any private data from individual users that does come through should be stored separately and securely from the data used for bulk analyses. From there, observe that full stream of user events and look at it as a whole body of activity and determine intent of users. Analysts can then take that full body of data and look through it for trends and commonalities, making judgment calls along the way on how to surface or spot trends.
Still, sometimes bulk analysis falls short. Platform development teams today often require a much more intimate view into what motivates an individual user navigating an online experience to truly personalize experiences. This can pose a challenge as companies try to balance accessing an individual-level understanding of how people interact with digital experiences and protecting the integrity of personal data at all costs.
Meanwhile, corporate teams can play an important role in finding consumer groups that provide important and voluntary user feedback. For example, at CarGurus, we have a customer insights team that focuses on recruiting test subjects to try out new features and answer questions about what they want to see from new platform updates. In our experience, collaboration between corporate and development teams has led to improved user experience on listings pages, as well as shaping emerging products by carefully prioritizing features that offer incremental value to potential customers.
Successful A/B testing during the process relies on a company to interpret user intent when determining why one test was more successful than another. User acceptance testing conducted by corporate counterparts can provide valuable insights that someone on the dev team who might be “too close” to the product may not consider.
Instilling a culture of continuous feedback (and improvement)
How organizations implement consumer insight programs and testing mechanisms will depend on their stage of evolution. Larger platforms like an Etsy or a major brand allow engineers to craft studies that leverage their inherent high-traffic volume to enable quick experimentation. Startups can still leverage traffic-volume-based testing to get directional information about a given product idea, but they may have to rely on other more personal means of testing due to limitations in gaining statistically significant results. Finding success starts with a culture where testing and feedback are ingrained into the development process. Rather than initially building features through early analysis built off of assumptions from market experts, for example, teams should be using different consumer-driven testing methodologies as much as possible throughout the iteration cycle.
At CarGurus, we gather customer feedback to confirm or reject initial assumptions put forth by our team members. For example, maybe a developer has an idea for a new page or feature that they think customers might be interested in. We’ll do a test where we’ll put a callout with a corresponding tracking link up on that site to see how many clicks it gets to assess the demand there is for that feature — we call this a “vapor test.” If we see a critical mass of clicks, we’ll move forward to develop that page (and continue testing as we go). In this way, ideas are introduced and thrown out or implemented swiftly, within hours and days, not weeks or months. The approach is critical not only for rolling out improvements expediently, but also for staying nimble and being able to meet customer expectations as they evolve.
Adopting an iterative approach to product definition, testing and execution requires a mindset and company-wide cultural commitment to frequent testing of incomplete ideas for taking a customer-driven approach to development. From large, established market leaders like Amazon to the newest online shopping startup, the best way to ensure competitive positioning is to find creative and meaningful ways of validating feature improvements to sites or products that are guided by real-world user engagement and feedback.