Better eCommerce Machine

You have to understand the business outcomes from your website and determine your goals and the desired outcome to answer business questions that allow you to take action: Do more of something or less of something or test ideas and then take action.

According to Fireclick’s benchmark index, only 10 out of 100 visitors at an average eCommerce website are truly interested in making a purchase, and only 2 of them actually make that purchase. Most eCommerce websites convert at a pretty low rate – in the 2-4% range. See The Kibo e-commerce Quarterly Report.

To increase the 2% range conversion rate, most websites focus on getting more and more visitors to their site…since, 2% of 200 means more money than 2% of 100.

But how about those remaining 8 people who were genuinely interested, but didn’t make the purchase? It can be more effective to focus on improving the conversion rate from people already visiting your site.

This means that there is a lot of potential for improving the website to increase conversion. It also means that there is a lot of visitors to the website who are not engaging, because they:

• Don’t want to buy
• Didn’t like something
• Came by a mistake
• Didn’t find the right information
• The prices were wrong
• The products were wrong
• To compaire prices
• Email – tell a friend

This article focus on how to improve your eCommerce success. What to measure and why. Both offsite and onsite website factors. Quantitative analysis will tell you what happened on your website and qualitative analysis will tell you why it happened.

What to measure and improve your eCommerce success

The below questions will give you a holistic view on how your eCommerce website is performing. Questions that all have an action attached to it, an action that can optimize your website, improve your eCommerce success and add to the revenue:

• Where are your website visitors are coming from?
• Where are the most valuable website traffic coming from?
• What content are visitors consuming on your website?
• Are you getting the right kind of traffic?
• What is the quality and engagement of your website?
• Is your website’s first impression, impressive?
• How does visitors behave on your pages?
• What content are visitors interested in?
• Are your content working for visitors?
• Are you traffic generating efforts converting at expected rate?
• What search engines are providing traffic?
• What keyword or phrases are driving traffic?
• How valuable is your home page?
• Are the visitors converting at expected rate?
• Is the website making money or not?
• What is the of return of investment, ROI?

1. What are the outcomes from your website’s existence
First make a website sales report covering product category, their revenue, their purchase units and their average selling price ASP to measure what is selling on the site. ASP is the first hint on website performance in comparison with other sales channels. It provides ideas for promotions, campaigns and insights on what can be leveraged on the website.

Secondly, observe trends of revenue metrics over time to highlight seasonality for website product sales or campaign mix to get insights on website sales efforts – for example, can different products sell during different time period and it can help you identify when to use campaigns to compensate for those product period fluctuations. By doing trends of campaign mix revenue you can also get insights on the variation of different campaigns effectiveness and how to leverage them.

2. Conversion rates
In Google analytics the Ecommerce Conversion Rate is the ratio of transactions to sessions, expressed as a percentage; for example, a ratio of 1 transaction to every 10 sessions would be expressed as an Ecommerce Conversion Rate of 10%.

A session in Google Analytics (GA) is a period of time in which a user interacts with your website. When the user leaves your site or is inactive for 30 minutes, the session ends.

As Dan Baker suggest conversion rate gets more useful as you break it down by different types of visitors with different intent and a different relationship with the retailer. Different conversion rates and average order values can then be segmented for different audiences to understand and work to improve the quality of traffic or strength of propositions, for example:

• First time, repeat visitor or registered customer conversion
• Referring channel conversion, e.g. organic search, paid search, social media, affiliates, display advertising
• Search type, e.g. paid or natural, brand, generic or long-tail
• Product category type – conversion rates are much higher for simple commodity products for example – flower purchase (double-digit percentage) compared with a higher cost product that will often be purchased in-store (for example beds or furniture which will often be less than one percent).
• Promotion type or seasonal sale – the IMRG data and Coremetrics data below shows that conversion rates can increase dramatically at these times.

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If you can figure out how to increase your conversion percentage, you’ll make more sales for the same traffic costs. Segmented generate traffic conversion rate trends to identify your acquisition strategies over time (what you are doing to generate traffic). A month by month conversion rate data on for example: Email campaigns, SEM/PPC, Search Engine traffic, Social Media traffic and the acquisition cost of each tactics to compare efficiency – this gives you the opportunity to see which tactics are generating the most traffic and have the best conversion rates.

Search Engines traffic is perhaps the most important tactic since it’s free and there is a lot of visitors coming that way.

The above eCommerce conversion funnel shows the conversion process is a useful starting point since as well as the typical average basket and sales conversion rates, it also shows the conversion rates to product page views. The sales funnel shows that, out of the total sessions (visitors on your website), nearly 50 percent will look at a product page, yet fewer than 15 percent will add a product to their carts and just over 3 percent will actually complete the transaction.

Based on typical ecommerce conversion rates, eCommerce websites can by significantly improve their product pages e.g. improve product description, details, compare, convince people to add products to their carts. More importantly, they can benefit from optimizing the checkout process so more people actually buy the products in their carts.

3. Website performance and goals
Determine your eCommerce website goals and the desired outcome. Basically, a eCommerce website goals could be an yearly 4% increase of website revenue or conversion or the most important KPIs from month to month. It’s recommended that you have goals for monthly revenue, monthly unique visitors for the top 3 acquisition strategies and monthly conversion rate for the top 3 acquisition strategies to identify their trends.

These reports will help you understand the website behavior tied to tour goals. This will result in a great deal of focus on what you will be looking at and also improve the chances that you will be able to affect your bottom line.

4. Measurement of onsite efforts
Most eCommerce websites have implemented tools to sell more, cross-sell and up-sell to give the website visitor the opportunity to buy more than the core product and improve conversion rates, for example, “Frequently bought together”, “Customers who bought this item also bought”, “Consider buying this related item with your new purchase” and “Special offers and product promotions for this product“.

These onsite efforts happens internally on the website (versus externally efforts such as generating traffic to the website) to get your customers to buy more and therefore it’s important to measure the effectiveness of these onsite factors.

Is your website more or less effective over time at selling these “related” products and services when the customer is onsite buying the core product? Analyze your top 20 selling products merchandising effectiveness – their conversion rates – over time to identify trends and get insights into consumer preferences – some “related” products are selling and some are not – to take action to change onsite efforts and hereby website effectiveness.

5. Top referring URLs and top keywords
The goal is to understand where the traffic is coming from, what search keywords or phrases they used in finding the website and what keyword led to this sale.

Analyze the top referring URLs to understand where visitors come from and learn what kind of traffic the website is getting – any web analytics software will tell you this. Also, set-up the top URLs performance against goals for referring traffic – your goal could be leads or the “Thank you for your purchase” page, to understand the value of each referring website that is sending traffic.

Reporting this over time will weed out some of the weaker-performance referring website and invest in those that do better to increase referring traffic. Check referring websites to ensure that your messages and call-to-action are accurate.

Analyze the top keywords or phrases that are being searched in search engines (Google, Yahoo!, MSN, Ask etc.) that are sending traffic to the website. The keywords can give you a picture of the intent of your customers and looking at key phrases is like reading the minds of your visitors – leading indicators of their interest.

Time spend on leverage the power of search engines – basic search engines optimization – can have a huge impact on getting traffic to your website. Ensure at least, that the top keywords or phrases that defines your business and that describes your products/services is placed in specific headings, copy, pictures alt tags and meta tags (used to specify webpage description, keywords etc.).

The idea is to get ownership of specific keywords or phrases in relation to website content – making your website more relevant to the visitor (finding a relevant website in relation to keywords or phrases used) and thereby hopefully gain a higher position in the search engine results page and in return creating more traffic to your website.

One step further, would be to monitor your competitor’s websites to identify their major traffic sources – which websites are responsible for sending traffic to their pages, search engines and the search keywords used.

6. Website content popularity
After knowing where the traffic is coming from and what search keywords or phrases visitors used in finding the website, it makes sense to know what pages they are visiting and how well the website is working.

Analyze the top 10 pages viewed for unique views, page/views, average time on page and the exit percentage to identify what content is being consumed by the customers. Use this information to determine what is appealing to the visitors and where you should promote on the website. Obviously, put the most compelling promotions on the top 10 pages to get maximum awareness.

Analyze the visitor retention rate (measuring the percentage of returning visitors) and the percentage of new visitors – loyal visitors are frequently highly engaged with your website and a high number of multiple visits indicates good customer/visitor retention and a high number of new visitors indicates strong visitor recruitment. The more returning visitors, the better retention rate, the better website content and the more loyal customers.

7. Home page visits
About 50% or less of a websites traffic sees the home page – what about your home page? Check the percentage of visitors that see the home page, average time on home page, average time to home page, home page entry and home page exit to understand how valuable the home page is. For example, low percentage home page visitors and high exit from home page means it’s not doing a great job – take action and optimize. Do the same analysis for the top 10 webpages viewed to dig even deeper.

8. Website overlay
The website overlay or click density display your pages as the users see it and shows a click-level indicator next to each link and call-to-action button. The website overlay reveals click density behavior and use it to optimize the website by experimenting with the website’s layout, content, navigation and call-to-actions. If a promotion have a low click-density it’s time to change it is call-to-action. The result of the changes will show up in tomorrows website overlay. Perform A/B testing with A as current webpage and B as A with changes and review the result.

9. Website bounce rate
The bounce rate gives you the number of visitors who stayed on the website for just a few seconds. A bounce rate report analysis the top 10 page entrances by entrance number, bounce number and bounce rate to measure visit quality and engagement – a high bounce rate generally indicates that website entrance pages aren’t relevant to your visitors. The more compelling the webpages, the more visitors will stay on your website and convert. You can minimize bounce rates by tailoring webpages to each keyword.

Analyze even deeper – segment bounce rate for traffic generating campaigns, top 10 webpages with high bounce rate and top 10 referring URLs to understand how valuable traffic is arriving at your website – is the traffic useful?, are you being linked to in a way that doesn’t actually reflect your website? and why are visitors so disappointed arriving at your website? Bounce rate reports gives room for change and opportunities for website both onsite and offsite optimization.

10. Shopping cart abandonment
A key metric is the shopping cart abandon rate – a measure defined by dividing the total number of shoppers who actually purchased by the far larger number of those who merely put something into their cart. According to a MarketingSherpa survey the average reported cart abandonment rate was 59.8%. Roughly one out of every two visitors who adds an item to their shopping cart ultimately abandons it instead of completing their purchase. Obviously, it’s a critical indicator of eCommerce website performance.

Nowadays, we can assume that web shoppers are familiar with the standard step-by-step shopping cart flow, so the alarming high shopping cart abandon rate is primarily a marketing issue. Analyze your shopping cart abandon rate over time to follow it’s development and take action with further tests. To reassure your customers, make shopping easier and reduce shopping cart abandons, consider:

• Promoting your return/exchange policies more clearly – a “Returns Are Easy” link next to the order confirm button in your shopping cart.
• Place reassuring security icon(s) on your shopping cart and test which icon(s) works for your customers.
• Place your privacy and trust policies next to fields asking for personal data – a “We Value Your Privacy” link next to the form field where shoppers are asked to enter their email addresses.
• Feedback from abandoned visitors. Get feedback form visitors who abandons a cart by exit pops, emails (for example, a note email – items are waiting in your cart… or the cart is about to expire…) or make survey emails by asking “why didn’t you buy? or “what did we do wrong?”.
• Test your step-by-step shopping cart flow – is it easy or too complicated. Check time spend on each step-by-step to identify and optimize which step that creates problems.
• Introduce online chat that’s triggered to help customers right when they need it most.

11. Customer surveys
The goal here is to measure how customers feel about their experience visiting a website and what would they want us to know or fix about those experiences.

This research on a eCommerce website provides the qualitative data that can makes your website better. Conversion rate and clickstream data can be limited for finding opportunities for improvements. Customer satisfaction questions can elevate your website understanding to a much higher level – ask questions like:

• If you were here to buy today and did not, please explain why?
• How can we improve you website experience to make it more effective for you?
• If you were not able to complete your task, what were you trying to do?

A MarketingSherpa survey asked shoppers: “Which factors keep you from doing more online shopping?” and they answered:

• Site/cart too complicated: 14%
• Return/exchange policy: 41%
• Fraud/Identity theft: 49%
• Sharing personal info: 53%

What does your customers say?

eCommerce Latest Trends

Here are some of the latest trends in eCommerce:

• Increased Adoption of Mobile Commerce: Mobile commerce (or m-commerce) has been steadily growing over the past few years, with more and more consumers using their smartphones and tablets to make purchases online.
• Rise of Social Commerce: Involves selling products directly through social media platforms. With the increasing use of social media, more and more businesses are starting to adopt social commerce as part of their eCommerce strategy.
• Personalization: Has become an important factor in eCommerce, with businesses using data to provide personalized content, product recommendations, and offers to their customers.
• Artificial Intelligence (AI) and Machine Learning (ML): AI and ML are increasingly being used in eCommerce to provide personalized experiences, improve product recommendations, and automate tasks such as customer service.
• Voice Commerce: Such as Amazon Alexa and Google Assistant are becoming increasingly popular, and businesses are starting to adopt voice commerce as part of their eCommerce strategy.
• Augmented Reality (AR) and Virtual Reality (VR): AR and VR are being used in eCommerce to provide immersive shopping experiences, allowing customers to visualize products in their homes before making a purchase.
• Sustainability: With increased awareness around environmental and social issues, more and more consumers are looking for sustainable and ethical products. Businesses that can demonstrate a commitment to sustainability are likely to be more attractive to these consumers.

Staying up-to-date with the latest trends and incorporating them into your eCommerce strategy can help you connect with your customers and achieve your business goals.

To summarize

Remember that, the existence of a eCommerce website is justified by the ability to generate revenue and sales. Determine your goals and the desired outcome to answer business questions that allow you to take action: Do more of something or less of something or test ideas and then take action. There is 2 ways to improve your eCommerce website success: Offsite website factors to increasing site traffic for higher conversion rates or onsite factors with the visitor in-mind to optimize the website for higher conversion rates – doing both will boost sales.

More information

To analyze deeper, Avinash Kaushik have published – Definitions: Goals, Metrics, KPIs, Dimensions, Targets – which provides metrics for content, lead generation and KPIs for key website processes such as reach, acquisition, conversion and retention.

Smart Insights – E-commerce conversion rate benchmarks – 2023 update

Forbes – 13 Practical Tactics To Avoid Shopping Cart Abandonment

Baymard Institute – Top 12 E-Commerce Usability & Optimization Resources

Kibo – Kibo e-commerce Quarterly