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Online Real Estate

June 11th, 2009 No comments

I know it doesn’t seem that way when you visit most stores today, (especially as you spend hours looking for an electric razor that is inexplicably no longer in the “bath” section, but rather is in the “electronics” section due to its battery powered nature; sorry I digress) but the layout and placement of items in a store is a carefully controlled science that many corporations like Coca Cola and Walmart have invested tons of money into. The reason is simple – they want to maximize what limited shelf space they have available. What they put on the shelves, where they put them, how you see them, etc. all has an effect on how you spend your money.

store_aisles

Shelf Space

There’s a widely held misconception that this shelf space/real estate limitation is no longer applicable online. Since stores are not limited by the “square footage” available to them, they feel freed from the constraints that are enforced on brick and mortar stores.

However this isn’t always true. The metaphors that e-commerce was born with, still apply – aisles become categories, and properties such as brands, price etc. that are used to determine how products are placed on shelves become refinement options.

There’s still a limit on real estate, but this time its enforced by the attention span of the visitors, and the bounce rate experienced on every click.

So how does this ‘limitation’ manifest itself.

Consider the ‘web page’ as seen in a browser window. Depending on the resolution of the viewers screen – you could have anywhere from 800 x 600 to 1200 x 900 and more real estate to work with. Everything else – whether its a click or a scroll away, is area that might not be seen by the visitor, either because they chose not to make that extra click, or they chose not to scroll down… Keep in mind that not all ‘folds’ are created equal – and some might even argue that the concept of above and below the fold is quickly becoming obsolete.

Still, for now let’s make the argument that every action required by the user has a certain bounce rate.

So – how does one maximize the use of their real estate?

The answer – as it is so often – “it depends.
So how do retailers decide how to place items, promotions, navigation elements, and creative elements on the page? What gets preference for the top spot?
The best answer is always – the data said so. Intuition, conventional wisdom, “it looks good”, and “because XYZ said so”, should all be overridden if the data points to another direction.
Data Trumps Intuition as seen in this slide from the Amazon Deck

Data Trumps Intuition as seen in this slide from the Amazon Deck

Click on the image above for the rest of the presentation that Ronny Kohavi, Director of Data Mining and Personalization and Matt Round, prior Director of Personalization gave at the Emetrics Summit in 2004.
As you’ll see – they strongly recommend A/B Testing. This, combined with detailed analytics are really the only way to be able to get data to support such insights.