When you start in e-commerce, whether as a pure player or as a 'physical' business adapting to current digital trends, it's necessary to step back from your activity to observe, analyze and ultimately to understand what's happening there.
Where some physical stores relied mainly on foot traffic, revenue generated or the number of customers, e-commerce has opened the door to detailed analysis and understanding of its results thanks to tools that are relatively simple to use.
We have listed several metrics, KPIs and statistics to boost your e-commerce sales. Let's discover them now!
7 insightful statistics about e-commerce
To stand out, boost your conversion rate and increase sales, there are many very useful tools and resources. But it's also sometimes necessary to step back and look at the numbers to get an overview of the sector. This makes you better able to make informed decisions for your e-commerce site.
1. Traffic sources for e-commerce sites
One of the essential variables for an e-commerce site is the traffic sources. It's crucial to know where your visitors come from and how they find your site.
As this chart shows, direct traffic represents 40% of e-commerce site visits. This channel mainly reflects loyal customers who have bookmarked the site or typed it directly into their browser's address bar.
Other traffic sources are therefore more interesting. Organic search accounts for 34% of visits, far ahead of referring sites (10%) or social networks (6%).
2. Channels that generate the most purchases in e-commerce
While it is crucial to know where an e-commerce site's visitors come from, it's even more important to determine the traffic sources that generate the most purchases (conversions). Indeed, this allows you to refine your web marketing strategy and focus your efforts on the most effective channels.
These figures from Custora are representative: organic search is responsible for 22% of online purchases (in 2016). It is closely followed by email marketing, which is therefore far from obsolete (20%), and by the paid search (19%).
3. E-commerce continues to grow
In a hyperconnected society, e-commerce has nevertheless not replaced traditional in-store sales. However, its gradual evolution is enough to illustrate the importance e-commerce has gained in recent years.
As this study indicates, e-commerce accounted for only 10% of total retail sales in 2015. But there are reasons to think e-commerce still has potential. Witness its rapid growth, rising from 4% in 2005 to 10% ten years later. And these numbers keep increasing! The e-commerce attracts more and more new generations of internet users, thus establishing itself as a sector of the future.
4. Social media and e-commerce
Although they do not constitute the channel that brings the most visits or conversions, social media they remain for internet users a preferred way to discover new products.
At this level, Pinterest clearly stands out. Indeed, 55% of its users say they use it to find and buy products. Its two runners-up, Facebook and Instagram, are far behind, with only 12%. It's another reason to boost your visibility on this social network.
5. The role of mobile in e-commerce
The mobile browsing has truly exploded in recent years, and e-commerce has not escaped this phenomenon.
According to this study, mobile represents 42% of e-merchants' traffic, closely followed by desktop computers (41%).
However, when looking at revenue by device, mobile's share drops to 21% (desktop taking the lead with 63%).
Thus, mobile has become an essential channel for e-merchants, since it generates the most visits. However, computers remain the preferred way for internet users to make their purchases.
6. Delivery in e-commerce
Delivery is a crucial point for any online shop, and it is moreover one of the main reasons why customers abandon their carts. Understanding internet users' expectations regarding delivery is therefore essential.
These figures highlight consumers' growing preference for alternative delivery locations:
- Store;
- Friend or family member;
- Pickup point;
- Workplace;
- Locker...
In 2016, 35% of products purchased online were delivered to these alternative locations.
7. The role of marketplaces in e-commerce
As we saw above, SEO provides a significant share of e-commerce merchants' traffic.
However, it's not always on search engines that users begin hunting for new products…
As the figures above indicate, product searches begin, in 35% of cases, on marketplaces, with Amazon at the top of the list. This confirms the importance for e-commerce merchants ofto be well ranked on Amazon and on other marketplaces.
Before tracking any KPIs, set your goals!
At first glance, this may seem obvious. In any business, goals are set to be achieved, which allows validating a good week, a good year or a good fiscal year.
Warning: Where you must not confuse business objectives with the analytics objectives, is that these analytics objectives can help condition the company's future performance.
Whether it's to better understand your website in order to improve it later, to better grasp the behavior of its potential buyers or the evolution of its communication campaigns, it is crucial to set learning objectives so that statistical analysis does not boil down to numbers merely showing the business's evolution.
Thanks to these objectives, it becomes possible to go beyond the numbers and use daily tracking to adapt communication, the structure of the website, or the offers.
Which KPIs should I monitor on my e-commerce website?
To guide observation and simplify thewebsite analysis, we have chosen to present 5 key KPIs for an e-commerce site, which make it possible to understand the evolution of one's business activity and performance.
1. Bounce rate
Beyond the traditional metrics that can be observed on a website (traffic, revenue generated, number of page views, etc.), the bounce rate will allow observing the behavior of visitors who arrive on the site.
Expressed as a percentage, the bounce rate defines the number of visitors who leave the website after viewing only a single page. The lower this percentage, the fewer people leave the website without visiting a second page, and consequently without taking more interest in the site's content.
The bounce rate is a quality indicator in the eyes of Google and analysts. Indeed, when it is extremely high (80% or more), it can indicate the presence of a spam site that does not match its description or the advertising made for it at all.
By monitoring this rate, it will be possible to judge the quality of landing pages of your visitors (home page, offer page). You can thus adjust the messaging, the structure, or the communication that lead to these pages in order to be as transparent as possible with users and prevent them from landing on a website whose content does not interest them.
A significant variation in this bounce rate over a given period can, in particular, indicate a bug on the website or a targeting problem with a communication campaign.
2. Conversion rate (or transformation rate)
The conversion rate is one of the essential KPIs in e-commerce. Where you have a number of visitors (or page views) and revenue generated on the website, it is possible to obtain a conversion rate that defines the ability to turn a visitor into a lead (if they give information to the company) or into a customer (if they buy a service or product).
The goal is to keep or improve this percentage as high as possible.
For example, a 5% conversion rate indicates that 5 out of 100 visitors bought a product on the e-commerce site. This information then makes it possible to estimate potential for the coming months and to observe the impact of marketing campaigns on the evolution of this rate.
This metric is extremely interesting but must be correlated with another: the average order value.
Also read: E-commerce: 4 marketing strategies to implement to boost your sales
3. Average order value
Indicating the revenue generated on average by a buyer on the site, the average order value allows you to gauge the value associated with a customer.
This metric must be linked to the conversion rate. Indeed, it indicates the company's performance in a more global way than if it were considered in isolation. For example, during sales periods the conversion rate may double or even triple, while the average order value will decrease because of attractive price reductions.
Therefore, changes should be considered together because some irrelevant conclusions could be drawn without an adjusted view of the numbers. One objective that can be set is to increase clients' average order value. How? By offering them, for example, associated sales, which increase revenue generated without having to acquire additional customers.
4. Cart abandonment rate
If one looks at the conversion rate, then one must also look at the rate ofcart abandonment.
The e-commerce giants have understood this well. The conversion funnel is one of the biggest challenges for a website. Indeed, it comprises the critical stages of adding items to the cart, account creation, and the buyer's reaction to the final price they will have to pay to place their order.
During this phase, many factors can negatively affect the user and give them more reasons to abandon their cart than to complete their purchase.
We could mention, among others:
- A slow website;
- An unclear conversion funnel;
- Difficulties entering payment information;
- A lack of reassurance about delivery or banking privacy, etc.
There are many reasons for abandoning a cart. And this percentage should be at the heart of any analysis of an e-commerce site's performance. The website can perform extremely well up to the final stage. But losing 70% of people ready to place an order means you need to understand, using exit pages and a behavioral study of your purchase funnel, what causes this dropout.
5. Customer acquisition cost
Let's step away from pure analytics for a moment and try to better understand how users arrive on the website to place orders.
What can be useful here is to focus directly on the user, the offers, and the advertising used to attract them. By matching budgetary spending to the current offers and comparing that to the number of buyers on the site, it is possible to obtain the customer acquisition costThis allows you to observe the profitability of the actions taken and keep only those that are effective.
Warning: If it is higher than the average order value, the acquisition cost indicates negative performance. This does not apply to business strategies that involve aggressive customer acquisition to gain market share.
This indicator can therefore support various interpretations and analyses depending on business objectives and how the market evolves.
Conclusion
As you can see, there are a multitude of KPIs for observing, analyzing, and understanding the performance of your e-commerce website.
The most important advice we can give you is to build your analysis plan carefully from the start and decide which indicators you want to monitor and for which end goals.
You need to look for weaknesses in the analysis plan and potential interpretations that might not be relevant depending on certain factors. Only then can you trust the statistical data related to your site and rely on it to make your decisions.
Want to get started in e-commerce? Are you looking for a specialist to create your online store? Find a freelance e-commerce developer on Codeur.com.
