Software Probes the Minds of Online Shoppers

Last Updated Aug 20, 2008 3:09 AM EDT

Earlier today I came upon a story that New York Times reporter John Schwartz (then at the Washington Post) wrote back in 1993 about that strange new place, cyberspace. As many as 15 million people gathered on Prodigy, AOL, CompuServe and GEnie to, as Schwartz wrote, "get news and information, to trade stocks and even shop."

Golly, shopping online. Imagine that.

Fifteen years later, with Amazon as much a code name for "shopping" as Wal-Mart or Safeway, marketers are still wrestling with a basic conundrum: online shoppers do things they'd never do in brick-and-mortar stores. Sixty percent of online customers abandon shopping carts, according to Stores magazine. Imagine that happening in Kroger or the Gap.

According to Nielsen research reported on GrokDotCom, June's highest conversion rates (percentage of visitors who buy) were found at ProFlowers.com (28.4 percent), Office Depot (25.6 percent), and FTD (24.3 percent). Most of the top 10 (including Eddie Bauer and VistaPrint) were companies known for relentless e-mail marketing. Coremetrics says the new visitor conversion rate in June was 2.02 percent -- 6.64 percent for visitors who do an on-site search -- and more than 68 percent of shopping carts got left in the virtual aisles. That's pretty pathetic.

"We knew customers were doing weird things on websites," said Mark Nagaitis, CEO of Austin-based consultancy 7 Billion People. The company's team of behaviorists, information technologists, psychologists, and software engineers developed an application called Market Maestro that tracks 15 attributes, from customer motivation to site presentation preferences, and correlates them to behaviors: visits, returns, abandons, and conversions.

"We saw that something was still missing, the emotional factor, and the psychology of buying," Nagaitis said. By constructing a neural network, the company hopes to gain some of the insights that online retailers can't get through body language or facial expressions.

  • Lisa Everitt

    A Denver-based business writer, Lisa Everitt is a veteran of daily and weekly newspapers and trade magazines, including The Natural Foods Merchandiser, Rocky Mountain News, Inter@ctive Week, San Francisco Business Times, and the Peninsula Times Tribune.