Marketers are under pressure to improve the ecommerce experience after new research shows a drop in online shopping conversion rates. The study also finds that the average order value of online shoppers is falling, driven by reduced spend on mobile devices.
The findings are revealed in the latest Ecommerce Quarterly report by online personalisation firm Monetate. The report calculates averages from a sample of more than seven billion online shopping sessions across Monetate’s global customer base of online retailers.
It shows that the overall global conversion rate – the proportion of website visitors making a purchase – is down from 2.54% in the first quarter of 2014 to 2.32% in Q1 2015. The add-to-cart rate, where the site visitor selects an item for their shopping cart, has also dropped from 8.31% in Q1 2014 to 7.39% a year later.
Mike Harris, EMEA vice-president at Monetate, says the downward trend is indicative of consumers’ propensity to visit more sites before making a buying decision. Indeed, although conversions are dropping, people are visiting more product pages per shopping session, rising from 2.09 product views per session in Q1 2014 to 2.28 in Q1 2015.
“This includes comparing prices, delivery options and return policies,” explains Harris. “As they move between sites, this has the effect of reducing conversion rates as they browse but don’t buy.”
A breakdown of conversion rates shows the drop between the periods was most severe when people visited a website directly, down from 2.81% in Q1 2014 to 2.46% in Q1 2015. The rate also fell among people who clicked through from an email (2.29% to 2.18%) and from paid search links (2.10% to 2.04%).
However, the conversion rate for people who clicked through from social media increased from 0.99% in the first quarter of last year to 1.17% this year. This suggests that social media is becoming a more prominent channel for generating sales, albeit on a small scale.
The study also shows that the global bounce rate – the percentage of sessions in which the visitor leaves the website after viewing one page without interacting with it – has risen from 29.66% in Q1 2014 to 35.24% a year later. This suggests that marketers need to work harder at improving the landing page experience and the relevance of the marketing communications leading customers to that page.
Harris believes brands should make better use of customer data in order to create personalised experiences online. He adds that many companies are unable to extract the right data from legacy systems such as customer relationship management or web analytics platforms, or from silos within the organisation.
“For those companies that are able to access their data, many lack the ability to extract valuable segments and interpret the performance of those segments online,” claims Harris.
The amount people spend is also falling. The report records a 2% drop in average order value (AOV) from £80.13 in Q1 2014 to £78.54 in Q1 2015, converted from dollars at today’s exchange rate; AOV increased slightly on desktop from £81.60 to £82.24, but fell sharply on smartphones (£71.29 to £60.53) and tablets (£75.80 to £70.63).
This fall across mobile devices comes as its share of ecommerce traffic is on the rise, with smartphones accounting for 19.9% of global website visits in Q1 2015, up from 13% the previous year. However, tablet traffic fell slightly from 16.6% to 15.2%.
Harris suggests that many brands are failing to develop mobile-optimised strategies that meet customers’ needs. “Companies are not optimising the cross-sell or up-sell piece on mobile,” he says.
“They are also not focusing on the research part of the mobile shopping experience, which lends itself to smaller AOV. In comparison, the desktop experience is optimised with tactics such as product recommendations that are focused on increasing AOV.”
Smartphone conversion rates fell from 1.10% globally in Q1 2014 to 0.96% a year later, while add-to-cart rates on the devices dropped from 6.32% to 5.41% over the same period. Tablets saw a slight increase in conversions from 2.32% in Q1 2014 to 2.51% in Q1 2015.
Harris argues that by creating streamlined and intuitive mobile experiences, ecommerce companies can turn browsing customers into buying customers.
“Personalisation can help deliver an experience that is tailored not just to the device, but also the context, location and known preferences of the individual, removing irrelevant content and barriers in the user journey,” he says.
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