Posted by Alan_Coleman
Hey Moz Blog readers.
I’m delighted to share with you a big body of work the Wolfgang team has just completed. It’s our E-commerce Benchmarks 2016 study. We dove into Google Analytics insights from over 80 million website sessions and over one-quarter of a billion dollars in online revenue for travel and retail websites, calculating average e-commerce website key performance indicators (KPIs) for you to use as benchmarks.
I hope these findings help you benchmark your KPIs and gain deeper insights into what you can do to boost conversion.
There are a number of unique features to this study:
- We’ve divvied the results up into overall, travel, and retail. Within the retail cohort, we’ve broken out results for our "online only" retailers and "multichannel" retailers. The KPIs are distinctly different for the two sets of retailers.
- We’ve conducted a correlation study in which we correlate all the factors of the study with conversion rate and with average order value.
- We’ve expanded the scope of the study since last time and based on your comments, we’ve included site speed analysis, as well as more info around paths to conversion and assisted conversions.
1/ The average e-commerce conversion rate is 1.48%.
- Retail websites averaged 1.36%.
- Online-only websites converted almost twice as well as their multi-channel counterparts with 2%, compared to 1.12%.
- The travel websites in the study averaged a 2.04% conversion rate.
It was notable that the travel websites enjoyed higher conversion rates but lower engagement rates than the average retailer. This spiked my curiosity, as that just seemed too darn easy for the travel retailers. After deep-diving the data, I found that the committed retail customer would visit the one retail website multiple times on their journey to purchase. On the other hand, the travel shopper does a lot of research, but on other websites, review sites, via online travel agents, travel bloggers, etc. before arriving at the e-commerce website to merely check price and availability before booking. This finding illuminates the fact that the retailer has more influence on its customers' journey to purchase than the travel website, who's more dependent on an ecosystem of travel websites to warm up the prospect.
2/ The death of SEO?
The data states it emphatically: "Hell no!"
Google organic is the largest source of both traffic (43%) and revenue (42%). SEO traffic from Google organic has actually increased by 5% since our last study.
There was also a strong correlation between websites with a high percentage of traffic from Google organic and higher-than-average Average Order Values (AOVs).
From this finding, we can infer that broad organic coverage will be rewarded by transactions from research-heavy, high-value customers.
3/ AdWords is the king of conversion
The strongest correlation we saw with higher conversion rates was higher-than-average traffic and revenue from AdWords.
In my experience, Google AdWords is the best-converting traffic source. So my take is that, when a website increases its spend on Adwords, it adds more high-conversion traffic to its profile and increases its average conversion rate.
AdWords accounts for 26% of traffic and 25% of revenue on average.
4/ Google makes the World Wide Web go 'round
When you combine Google organic and PPC, you see that Google accounts for 69% of traffic and 67% of revenue. More than two-thirds! Witness the absolute dominance of “The Big G” as our window to the web.
5/ Facebook traffic quadruples!
In our last study, Facebook accounted for a meagre 1.3% of traffic. This time around, it's leapt up to 5%, with Facebook CPC emerging from nowhere to 2%. When better cross-device measurement becomes available in Google Analytics, I expect Facebook to be seen as an assisted conversion power player.
6/ Don’t discount email
Email delivers 6% of traffic, which is actually as much as all the social channels combined — and treble the revenue. In fact, with a 6% share of revenue, Google is the only medium that delivers more revenue than email. Digital marketers often lust after shiny new toys (hello, Snapchat!), but the advice here is to look after the old reliables first. And this 40-year-old technology we all use every day is about as old and reliable as it gets.
7/ Site speed matters most
This section was added to the study after comments from you, the Moz Blog readers, last time around, so thanks for your input. The server response time correlation with conversion rate (-0.31) was one of the strongest we saw. It was dramatically stronger than engagement metrics, such as time on site (0.11) or pages viewed (0.10). We also found that for every two-tenths of a second you shave off your server response time, you'll increase conversion rate by 8%. Don’t forget that site speed is a Google ranking factor, so by optimizing for it you'll benefit from a "multiplier effect" of more traffic and a higher conversion rate on all your traffic. Google’s page speed tool is a great place to start your speed optimization journey.
Check out our conversion rate correlation chart below to get more insights on which metrics can move conversion rate.
8/ Mobile is our "decision device"
2015 was finally "the year of mobile." Mobile became the largest traffic source of the devices, but seriously underperforms for revenue. Its 42% share of traffic becomes a miserly 21% share of revenue, and it suffers the lowest average conversion rate and AOV. Despite these lowly conversion metrics, our correlation study found that websites with a larger-than-average portion of mobile traffic benefitted from larger-than-average conversion rates. This indicates that the "PA in your pocket" is the device upon which decisions are arrived at before being completed on desktop. We can deduce that while desktop remains our "transaction device," mobile has become our "decision device," where research is carried out and purchase decisions arrived at.
9/ Digital marketers are over-indexing on display advertising
Despite accounting for 38% of digital marketers budgets (IAB Europe), display failed to register as a top ten traffic source. This means it contributed less than 1% of e-commerce website traffic.
10/ Bounce rate don’t mean diddly squat
Bounce rate actually has zero correlation with conversion rate! Digital marketers feel a deep sense of rejection when they see a high bounce rate. However, as an overall website metric, it’s a dud. While admittedly there are bad bounces, there are many good bounces accounted for in the number.
11/ Digital marketing "economies of scale"
Interestingly, websites that enjoyed more-than-average traffic levels enjoyed higher-than-average conversion rates.
This illustrates a digital marketing version of "economies of scale"; more traffic equals better conversion rates.
The corollary of this is lower CPAs (Cost Per Acquisitions).
12/ People are buying more frequently and spending more per order online.
Average conversion rates have increased 10% since the last study. Retail average order value has shot up a whopping 25%! This demonstrates people are migrating more and more of their shopping behavior off the high street and onto the Internet. There’s never been a better time to be an e-commerce digital marketer.
You can deep-dive the above digestibles by reading the full study here.
How do these benchmarks compare to your personal experience? Anything you're surprised by, or that confirms your long-held suspicions?
I’d love to hear your thoughts in the comments below.
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