Online shopping is becoming increasingly popular. It’s now more important than ever to understand how your eCommerce business is doing compared to others. Benchmarking helps you measure your success against industry standards, identify areas for improvement, and set realistic growth goals.
In this article, we’ll explore eCommerce benchmarking and how it can give your business a competitive edge in the online marketplace.
Table of Contents
What Are eCommerce Benchmarks?
A company can select the right eCommerce benchmarks for their business. They do this by:
- Considering internal and external comparisons.
- Utilizing relevant data points like:
- Customer retention rate
- Sales conversion rate
- Customer lifetime value
- Customer acquisition cost
- Abandoned cart rates
- Average order value
- Bounce rate
- Net promoter score
Analyzing visitor traffic and engagement on an eCommerce site involves key metrics such as:
- Traffic sources
- Device type
- On-site engagement
- Transaction path length
- Average order value
- Conversion rate
Ecommerce benchmarks help in:
- Understanding customer retention
- Improving conversion rates
- Providing valuable insights for:
- Setting goals and expectations
- Identifying areas for improvement
- Making informed decisions to enhance sales and marketing performance
Setting Your Benchmarks: How to Choose What Works
Benchmark Examples: From First Visit to Regular Buyer
First-time visitors usually follow these steps before becoming regular buyers on an ecommerce site:
- Browsing products
- Adding items to the cart
- Creating an account
- Making a purchase
- Receiving follow-up communications
Regular buyers usually emerge after multiple interactions with the site, like making repeat purchases or subscribing to newsletters. To boost this conversion rate, ecommerce businesses can:
- Implement personalized recommendations
- Offer loyalty programs
- Provide exceptional customer service
In ecommerce, customer retention rates often fall behind initial acquisition rates. However, strategies such as targeted email marketing, proactive customer support, and exclusive offers can enhance customer retention.
Looking at Traffic: Where Are Your Visitors Coming From?
Website visitors come from various sources such as organic search, paid search, direct traffic, referrals, and social media.
Different sources impact conversion rates by influencing visitor quality and intent. For instance, organic search visitors may have higher conversion rates due to specific search queries and intent.
To attract visitors from different sources, effective strategies include optimizing website content for search engines, running targeted advertising campaigns, creating engaging social media content, and building strong referral partnerships.
Each source needs a tailored approach to attract and retain visitors.
Device Types: Phones, Computers, Tablets, Oh My!
Customers use phones, computers, and tablets to access ecommerce websites. This affects online shopping behavior by influencing factors like screen size, connection speed, and user interface.
To optimize the ecommerce experience for users on different devices, businesses can use responsive web design. This ensures that websites adapt to various screen sizes and resolutions.
Additionally, mobile-friendly navigation, fast loading times, and easy checkout processes can enhance the user experience for phone and tablet users.
Similarly, optimizing website performance for computers, including ensuring compatibility with different browsers and operating systems, is crucial for providing a seamless shopping experience.
Engaging on Your Site: Keep Visitors Clicking
To keep visitors engaged on an eCommerce site, companies can use various strategies:
- Create compelling and relevant content.
- Offer personalized recommendations.
- Optimize website navigation for easy product access.
- Provide a seamless and intuitive user experience.
To optimize the transaction path:
- Streamline the purchasing process.
- Offer multiple payment options.
- Reduce friction at every stage of the transaction.
Tactics to improve customer retention:
- Implement loyalty programs.
- Send personalized follow-up communications.
- Provide exceptional customer service.
- Offer exclusive promotions and discounts to repeat customers.
The Journey to Buy: Understanding the Transaction Path
An ecommerce transaction consists of several stages: product discovery, consideration, and purchase.
Conversion rates can be improved by optimizing the user experience, offering convenient payment options, and providing personalized product recommendations.
To encourage customer retention, businesses can implement strategies like loyalty programs, email marketing, and excellent customer service.
Counting the Cash: How Much Are Customers Spending?
The article has lots of data about how much customers spend on ecommerce sites. It can tell us about the patterns and trends in customer spending habits by looking at industry benchmarks and averages.
This information can help businesses understand their customers better and make smart decisions.
Getting Visitors to Buy: Improve Those Conversion Rates
- A/B testing
- Optimizing website speed
- Simplifying the checkout process
- Providing detailed product descriptions
- Offering multiple payment options
Improving conversion rates for eCommerce websites can involve various strategies. Reducing the number of steps, removing distractions, and having a clear call-to-action in the transaction path are also important. Industry benchmarks for conversion rates can help set realistic improvement goals and evaluate performance. Industry standards generally range between 2% to 5%.
Keep Them Coming Back: Customer Retention Explained
Strategies for keeping customers returning to an eCommerce site:
- Offer loyalty programs
- Provide personalized recommendations
- Ensure excellent customer service
- Send targeted email campaigns
Customer retention can be measured using:
- Customer retention rate
- Customer lifetime value
- Net promoter score
Customer service is essential for eCommerce customer retention. It includes:
- Providing a positive shopping experience
- Resolving customer issues promptly
- Building a strong, loyal customer base
How Much Can You Make? Understanding Ecommerce Margins
Typical eCommerce benchmarks for sales and profit margins include:
- Customer retention rate.
- Sales conversion rate.
- Customer lifetime value.
- Customer acquisition cost.
- Abandoned cart rates.
- Average order value.
- Bounce rate.
- Net promoter score
A business can select appropriate benchmarks for their industry and market by analyzing and comparing internal and external data points.
By using real-time and accurate benchmarking data, businesses can make informed decisions to improve their average margins.
Google Ads: How They Stack Up
Ecommerce benchmarks can help businesses improve sales and marketing. They provide insights for comparing performance against industry standards and competitors. Google Ads has advantages like wide reach and targeting options, but also limitations such as high competition and costs. However, businesses can improve conversion rates and customer retention using Google Ads. They can focus on relevant keywords, create compelling ad copy, and optimize landing pages for a seamless user experience.
The World Beyond Google: Exploring Other Ad Platforms
Some other ad platforms to consider beyond Google are social media platforms like Facebook, Instagram, Twitter, and LinkedIn, as well as Amazon and Bing Ads.
These platforms may offer a more targeted audience based on user behavior, interests, and specific demographics, compared to the broader reach of Google Ads. They can provide a more personalized and engaging user experience, potentially leading to higher conversion rates.
Businesses can effectively use multiple ad platforms by understanding their target audience and tailoring ad content to each platform’s unique features. Also, tracking and analyzing performance data from each platform can help businesses optimize their advertising efforts and allocate budget and resources more efficiently.
Converting Emails to Sales: Can You Beat the Average?
E-commerce businesses can use strategies like targeted emails, promotions, and compelling calls to action to boost sales.
Email marketing tends to have higher conversion rates than social media and display advertising.
Important factors for successful email campaigns are catchy subject lines, quality content, mobile optimization, and sending emails at the right time.
