Posted by Alan_Coleman
Is your website beating, meeting, or behind the industry average?
Wolfgang Digital’s 2017 E-Commerce Benchmark KPI Study is out with an even bigger sample size than ever before. Analyzing 143 million website sessions and $531 million in online revenues, the study gives e-commerce marketers essential insights to help benchmark their business’s online performance and understand which metrics drive e-commerce success.
This study is our gift to the global e-commerce industry. The objective is to reveal the state of play in the industry over the last 12 months and ultimately help digital marketers make better digital marketing decisions by:
- Better understanding their website performance through comparing key performance indicators (KPIs) with industry benchmarks.
- Gaining insights into which key metrics will ensure e-commerce success
You can digest the full study here.
Skim through the key takeaways below:
1. Google remains people’s window to the web, but its dominance is in decline.
The search giant generates 62% of all traffic and 63% of all revenue. This is down from 69% of traffic and 67% of revenue in last year’s study. In numerical terms, Google is growing — it’s simply that the big G’s share of the pie is in decline.
2. Google’s influence is declining as consumers’ paths to purchase become more diverse, with "dark traffic" on the rise.
This occurs when Google Analytics doesn’t recognize a source by default, like people sharing links on WhatsApp. Dark traffic shows up as direct traffic in Google Analytics. Direct traffic grew from 17% to 18% of traffic.
3. Consumers' paths to purchase have gotten longer.
It now takes 12% more clicks to generate a million euro online than it did 12 months ago, with 360,000 clicks being the magic million-euro number in 2017.
4. Mobile earns more share, yet desktop still delivers the dollars.
2017 is the first year mobile claimed more sessions (52%) than desktop (36%) and tablet (12%) combined. Desktop generates 61% of all online revenue, with users 164% more likely to convert than those browsing on mobile. Plus, when desktop users convert, they spend an average of 20% more per order than mobile shoppers.
5. The almighty conversion rate: e-commerce sites average 1.6%.
E-commerce websites averaged 1.6% overall. Travel came in at 2.4%. Online-only retailers saw 1.8% conversion rates, while their multichannel counterparts averaged 1.2%
6. Don’t shop if you’re hungry.
Conversion rates for food ordering sites are fifteen times those of typical retail e-commerce!
***Correlation explanation: The most unique and most useful part of our study is our correlation calculation. We analyze which website metrics correlate with e-commerce success. Before I jump into our correlation findings, let me explain how to read them. Zero means no correlation between the two metrics. One means perfect correlation; for example, "every time I sneeze, I close my eyes." Point five (0.5) means that as one metric increases 100%, the other metric increases 50%. A negative correlation means that as one variable increases, the other decreases.
From our experience compiling these stats over the years, any correlation over .2 is worth noting. North of 0.4 is a very strong correlation. I’ve ranked the following correlations below in order of strength, starting with the strongest.
7. Sticky websites sell more (0.6).
The strongest correlation in the study was between time spent on a website and conversion rate (0.6 correlation). By increasing time on site by 16%, conversion rates ramp up 10%. Pages per session also correlated solidly with revenue growth (0.25).
8. People trust Google (0.48).
According to Forbes, Google is the world’s second most valuable brand. Our figures agree. People who got more than average organic traffic from Google enjoyed a savagely strong conversion rate (0.48). It seems that when Google gives prominent organic coverage to a website, that website enjoys higher trust and, in turn, higher conversion rates from consumers.
9. Tablet shoppers love a bit of luxury (0.4).
Higher-than-average tablet sessions correlated very strongly with high average order values (0.4). However, pricey purchases require more clicks, no matter the device.
10. Loyal online shoppers are invaluable (0.35).
Your best-converting customers are always your returning loyal customers. Typically they show up as direct traffic, high levels of which correlated very strongly with conversion rates (0.35).
11. Speed matters (0.25).
Average site speed was 6 seconds. This is far higher than the generally recommended 2 seconds. There was a strong inverse correlation between average page load time and revenue growth (0.25). Reducing the average load time by 1.6 seconds would increase annual revenue growth by 10%.
12. Mobile is a money-making machine (0.25).
Websites that got more mobile pageviews (0.25) and more tablet pageviews (0.24) grew revenue faster.
13. Email pays dividends (0.24).
Email delivers three times as much revenue as Facebook on a last-click basis. Those who get more traffic from email also enjoy a higher AOV (0.24).
14. Bing CPC represents a quick win (0.22).
Websites with a higher share of Bing CPC traffic tend to see a higher AOV (0.22). This, coupled with lower CPCs, makes Bing an attractive low-volume high-profit proposition. Bing has made the route into Bing Ads much easier, introducing a simple one-click tool which will convert your AdWords campaigns into Bing Ad campaigns.
15. Pinterest can be powerful (0.22).
Websites with more Pinterest traffic enjoyed higher AOVs (0.22). This demonstrates Pinterest’s power as a visual research engine, a place where people research ideas before taking an action — for example, planning a wedding, designing a living room, or purchasing a pair of pumps. The good news for digital marketers is that Pinterest recently launched its self-service ad platform.
We used Google Analytics to compile the report. Once installed correctly, Google Analytics is very accurate in the numbers it does reports. However, there are two areas it struggles to report on that digital marketers need to keep in mind:
- Offline conversions: For 99% of our data set, there is no offline conversion tracking setup. Google is introducing measures to make it easier to track this. Once marketing directors get visibility on the offline impact of their online spend, we expect more offline budget to migrate online.
- Cross-device conversions: It’s currently very difficult to measure cross device conversions. According to Google themselves, 90% of goals occur on more than one device. Yet Google Analytics favors the sturdy desktop, as it generates the most same-device conversions. The major loser here is social, with 9 out of 10 Facebook sessions being mobile sessions. Instagram and Snapchat don’t even have a desktop version of their app!
Google is preparing to launch enhanced reporting in the coming months, which will give greater visibility on cross-device conversions. Hopefully this will give us a clearer picture of social’s role in conversion for our 2018 study.
The full report is available here and I’d love to answer your questions in the comments section below.
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