SRO - Where the E-Tail Rubber Meets the Road
BY MAURICIO CUEVAS
In my last several posts, I’ve discussed some key developments in online retail (e-tail) and how these are impacting the ability of website operators to increase time on site, conversation rates, average order value, etc. These include the emergence of social networks as a primary source for sharing buying recommendations, the inability for consumers to shop together online as they do in the brick-and-mortar stores and the lack of tools for capturing online shoppers’ buying sentiments.
This leads us to today’s a topic: Social Revenue Optimization or SRO.
SRO is a concept that sums up how e-tailers can increase revenues, improve profit margins, and deepen user engagement byunlocking the deep reserves of business intelligence that exist on their sites. The ability to mine buyer sentiment is what will ultimately enable e-tailers to move past the current status quo and surgically optimize pricing, promotions, and products. The richness of this data, which is unavailable in brick-and-mortal retailing, can directly help boost revenue, average order value, and conversation rates when used effectively.
So what makes up SRO analytics? Essentially, it is broken down into four categories that are supported by visualization techniques for easy identification of trends, opportunities, etc.:
Sentiment: Structured and unstructured data about how customers feel regarding products and pricing. This data enables e-tailers to use positive and negative predispositions in order to personalize product placement and pricing per customer.
Revenue: By closely tracking changes in incremental conversion rates, revenue per visit and average order value that result from real-time adjustments made based on customer sentiment and social signals, e-tailers can reliably assess the success and failure of individual pricing and promotion strategies.
Margin: Every dollar invested in SRO generates on average approximately $3 in incremental revenues. Through the dynamic analysis of positive, negative, and neutral price changes, e-tailers can precisely pinpoint what worked and what didn’t in order to achieve optimal price elasticity.
Engagement: Allows e-tailers to link the ability of customers to collaborate with friends without leaving the website and increases in time-on-site and pages viewed.
With SRO, e-tailers can extrapolate actionable intelligence from user activity to make real-time adjustments to pricing, promotions, and inventory that will immediately boost revenues and margins. Next time I will discuss how e-tailers can extract SRO data from their web properties.








