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Monday, Apr. 9, 2007 at 5:43 pm

eMarketer: “Few Convert at Retail E-Commerce Sites”

By Robert Gorell
April 9th, 2007

Ah, yes… Spring is here (well, mostly). It must be time for some new E-Commerce Conversion Rate numbers!

Okay, so maybe it’s not that exciting. eMarketer has the scoop:

Online merchants convert an average of 2%-3% of their site visitors into buyers, according to the e-tailing group‘s “Sixth Annual Merchant Survey.”

That’s about the same as last year. And the year before that.

The group says that driving the right customers to sites and increasing sales and retention all require more targeted tactics every year. It points to analytics and data mining as the way to make this happen.

Fair enough. But as Future Now’s Holly Buchanan points out, data can only tell you WHAT visitors do, not WHY they do it.

Year-after-year, our ability to capture and report data has gotten better and better. Why, then, are Conversion Rate averages still down overall since their tepid peak of 3.2% in 2001?

Would a 24.5% CR by any other name smell as sweet?

Or, better yet, while so many sites convert so poorly, why is ProFlowers.com leading the pack at 24.5%? That’s 10X the industry average!

What’s their secret? Aside from having a great product–which never hurts–ProFlowers routinely looks beyond the data in order to provide a better customer experience.*

So, does this say more about ProFlowers or the sad state of online marketing in general? We’d love to see your comments…

As for eMarketer, they seem to agree that “retailers with industry-leading conversion rates are doing more than just looking at numbers.” Says eMarketer Senior Analyst Jeffrey Grau:

Online retailers who go beyond using traditional Web analytics data to truly understand their customers’ intentions, perceptions and concerns will be rewarded with higher conversion rates.

If you’d like to look beyond the data for real-world insight into how to improve online conversion and customer loyalty, please join us next week in New York City for our Call to Action and Persuasive Online Copywriting seminars.

Wouldn’t it be great to see your site’s name on that list once next spring rolls around?

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Comments (16)

  1. I note the large percentage of catalog companies in this chart, don’t think that is an accident…ordering from a web site with a catalog in hand has to increase conversion.

    Also, repeat buyers are going to convert at a higher rate, yes? I bet if you looked into the customer bases of these companies you would find they also have some of the highest repeat buyer rates in the industry.

  2. Jim,

    I’m sure you’re right on both accounts. A common thread among them seems to be that they use either catalog, email or other multi-channel efforts to stay relevant to their customers. For instance, ProFlowers sends highly-targeted emails that help remind forgetful people (especially guys like yours truly) of birthdays, anniversaries, holidays and so on. Seems they always have a discount right when I need it. Coincidence? ;)

    Some might say I don’t buy enough flowers, but one thing’s for sure: I don’t buy flowers anywhere else.

    Regardless, all of the sites on this list could do even better! We’ve even used some of them as examples of what not to do within certain contexts (image views for some LL Bean products, for instance). But this is exactly why companies need to figure out what’s best for their customers; to find their own “best practices.”

  3. It is interesting that in some of the “high conversion cases” that these industries also have high “offline” conversion rates too. In other words, very few people “browse” a flower shop. It is a very specialized retailer. At the same time… most of these higher conversion rates… ARE from multi-channel retailers… which typically take advantage of the multiple touch points to increase overall experience awareness. In the end though, it is superior customer experience that “wins” the conversion game. There are a LOT of elements that make that up however. cheers, .bb

  4. Bill,

    It’s definitely true that customer experience requires a lot of elements over a variety of customer touch-points. This is why we recommend our clients focus on improving their “overall conversion.” There’s plenty one can do from a tactical level to improve online conversion without improving the customer experience. But that’s not where the real money, or the real value, lives. I think Jim nailed it when he mentioned repeat purchases.

    Besides, customers don’t care if they buy from you directly online, in a store, over the phone, or online six months after they first considered your product. It should feel like a continuous experience from their perspective. (Thanks for bringing up this point!)

    Yet ProFlowers isn’t LL Bean… In other words, their brand has been built entirely online and entirely by word-of-mouth/mouse (someone please correct me if I’m wrong). To become the top-converting e-commerce site and engender so many repeat customers is a big deal for a new brand. To be remarkable, a brand has to transcend being just specialized and start being special.

  5. [...] a sucker for great copy, but I'm not the only one. That's why ProFlowers converts 10 times better than most e-commerce sites; they know how to connect with fickle shoppers, even procrastinators like [...]

  6. [...] put this in perspective, most websites are converting less than 3% of their visitors and are therefore pushing away 97% or more of their visitors. If they can just [...]

  7. I’m always surprised at QVC being so high. They make you register to buy anything. They don’t make you aware easily (to me, anyway) of returns, guarantees, shipping times (did see the option to check that in the end), stock availability. I found their contact details hard to find, although they have a sales number, but it wasn’t the most obvious part of the page.

    Their product descriptions and images, though, certainly make up for these points.

  8. Tom,

    Very good points, and I know what you mean. If they didn’t have an entire network dedicated to moving their products, I don’t think they would convert nearly as much as they do online. It’s not a brand that appeals to a very web-savvy demographic, so customers are also more likely to spend more time on the site to find the products they want. In other words, they’ve established themselves as THE place to get particular deals, so visitors dropping-off to pursue similar deals on other sites seems less likely.

    Still, it definitely shows the power of strong mulit-channel planning. I’m sure they must be updating the site constantly to make sure that the products visitors see on the site match what they see on TV.

    I’m sure that even QVC, at 16.8%, is leaving plenty on the table.

  9. Thanks for the response, Robert.

    Interesting analysis of it all, and I’d have to agree. Perhaps their main benefit is that they don’t have to do Adwords or SEO, so those entering are already more qualified.

    Their site architecture must work well for them as well, as their search feature does not have any form of spell checking enabled either, so you’ve gotta get it exactly right. But, it can’t be removed from them that this is a company evidently aware of selling products to people without them being physically present. Going from retail to the Internet often results in a fair number of myths as to what works, but their route and research results in some very interesting and valuable intellectual property.

    Still, I think they could benefit from some Persuasion Architecture ;-)

  10. [...] a look at the buttons of the top converting websites to see what they have in common (read my analysis below the [...]

  11. [...] Which sites are currently beating the industry average? … from emarketer [...]

  12. [...] value of first impressions. Funny/sad stuff, ain't it? No wonder e-commerce conversion rates stink!) Technorati Tags: Amazon, buying process, checkout process, Get Elastic, [...]

  13. [...] suck. While allowing shoppers to shop online and purchase offline is still a vital health metric, we've watched average online conversion rates stand still (according to Shop.org and eMarketer), staying within one standard deviation for several [...]

  14. I strongly suspect those conversion rates are inflated either by the way Nielsen collects the data or by the companies themselves.

    Also, return on ad spend or ROI is a superior metric to conversion rate for measuring most online marketing efforts.

    You can have a fantastic conversion rate, but if you paying to much per conversion, you won’t last long…

  15. It would be interesting to also include data of other types of conversions, such as newsletter subscribers, who are likely to come back and convert into a customer at another time.

  16. With any new platform it will take longer than 12 months for a significant shift in market activity. Business who are looking for quick return will not achieve this. Those businesses would not have survived in the traditional market either. Marketing campaigns must be holistic and strategic. There remains a huge learning curve for all involved in this new approach to marketing, sales and service.

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