Petco’s John Lazarchic On Web Site Improvement
In the Darwinian world of the Web site, you either adapt, or die. Strike that. Perhaps you don’t die, and hopefully your company doesn’t either, but you can certainly lose ground to your competitors within a few dozen mouse clicks.
John Lazarchic, vice president of e-commerce for Petco, a multichannel marketer of pet food, supplies and services, was determined to avoid such a fate for Petco.com, which was originally launched in July 1999 under the name Petopia.com. With Endeca’s site search tool and Bazaarvoice’s customer review program, Lazarchic found the applications that have helped turn Petco.com into an industry leader by sorting products by customer ratings or reviews.
Target Marketing discussed with Lazarchic—who will be presenting “Implementing and Leveraging Ratings and Reviews to Drive Conversion, AOV and Traffic” at the upcoming eTail 2007 conference in August—the ways to continually enhance a Web site.
Target Marketing: How often do you attempt to improve your Web site?
John Lazarchic: Improving the Web site is an ongoing process. We’re constantly making changes based on customer feedback, things that we find, and this is continuous. There are two buckets: developers or usability managers constantly making small tweaks, and big technical development projects, such as a cart redesign or a shopping navigation redesign, which tend to be longer term.
On a weekly basis, we’re launching new content, landing pages and splash pages to support the store; for new products, we’re [updating] on a daily basis. You never stop that process of continually trying to tweak and improve the Web site. For new functionality, we probably do two to three larger launches a year; these are big, very noticeable projects that people see when they launch the Web site.
TM: How closely do you track online visitors, in terms of what they’re clicking on?
JL: We track that very closely. We use core metrics and review where people are at and what they’re using on the Web site. Weekly, we focus on immediate projects, [such as] marketing. Monthly, we look at the broader usage of the Web site over that period in terms of total users and what they’re doing. Redesign [requires] a deeper analysis of user activity over a longer time period.
TM: How much thought is given to what animals are featured on the site?
JL: We try and do what we call “an animal homepage” for each animal type, so as you’re going through the site, if you go to dog, cat or bird, each of those will be very specific to the pet. But we tend to work with dogs and cats on the main homepage because that [mirrors] the majority of customers.
TM: One of the great things about your Web site is the “Shop By Pet Type.” Is that something you’ve had for a long time and simply fine-tuned?
JL: Yes, that’s really been the strategy since the site originally launched in 1999. We’ve always segmented the shopper by pet type because you do have to treat them very differently, and obviously the products you’re promoting have to be very targeted. Other sites, such as electronics, may have much broader appeal of their product line. [But] with the pet category, it has to be very targeted; if we showed fish products on the homepage and you’re a dog customer, much of that page may be irrelevant to you. So that creates a challenge for us: getting the customer to their almost mini Web site of shopping that’s relevant to that user as quickly as possible.
TM: What are a few of the recent improvements you’ve made to your site?
JL: The push in the last year has been adding customer reviews to the Web site. It’s been about 18 months, but really exploded in the last year since we launched customer ratings and reviews. The feedback from the customers as far as how much they like them and how important it is to their buying decision has been phenomenal—to the point that through our online survey tool, customers continuously rate online reviews as the number one reason they made a purchase, or the number one feature on the Web site they like.
We integrated our review system with our site navigation and search through Endeca, so we’ve been able to give our customers the ability to shop by ratings, which makes us one of the first ones to do that.
Basically, the system now automatically puts items of a four or higher rating into a category called “top rated.” As customers are shopping, if they’re curious about what pet products are best for their pet or what other customers like, they’re able to go in and look at those. We’ve found, surprisingly for us, that the conversion rate for customers who use that category is substantially higher than customers who are shopping elsewhere on the site—somewhere in the mid-40s conversion rate than the rest of the site. And their average order value is more than 50 percent higher than customers who shop through other channels on the Web site.
Normally, customers go from, for example, dog to dog toys, and the Web site only shows dog toys. But when you go to the top-rated products, it’s all a hodgepodge; customers tends to page through page after page, so they see a whole variety of products in different categories that they may have otherwise not looked at; so it’s drastically increasing their spend. Our goal now is [figuring out] how to drive people into that area so they’re seeing all these new products.
Along the same lines, we’ve added ratings to our sort dropdown for our product listing page. Where you traditional look for sort by price, alphabetically, new items, or popularity, we’ve added ratings as one of the sort features. We’ve quickly found that that was the number one sort option that customers were using every time they used the dropdown, so we now use ratings as our default sort. Again, it’s letting the customer set the merchandise strategy.
TM: One of the inherent limitations of the average Web site has always been, once you get specific with a search, you stop seeing everything else.
JL: Exactly, that’s good for the customer who is very mission-oriented, such as the dog owner who wants a dog cage who you can throw a few cross-sell items at—but you can’t put too much in front of them and distract them from their mission. But then there’s the customer who says, ‘Hey, I’m going to look at this category.” We try to get them to see value as they’re paging through that category, so it’s more like the old ‘milk in the back of the store’ strategy. They have to walk though the aisles to get to that item and thus see a lot more product. Done right, you will see a surge in sales and conversion rates.
TM: Finally, what is Petco.com’s biggest challenge in the near future?
JL: Our biggest challenge is just making the shopping experience relevant to the user. We want to be able to make the Web site more personalized for the user. Because there are different customers for each pet, the first page can be very irrelevant to them. So the ability to personalize the site based on what we know about them, when they first get here, is really what we’re seeing as a big win down the road for us. But it remains the biggest challenge: the quantity of data and the technology behind that.