Check out the updated 2017 version of this study here!
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.
In this post I’m going to give you an overview of 12 key takeaways. You can read the full report here. Or grab some quick insights from our infographic here.
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.
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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.
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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.
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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.
Optimize hard,
Alan
Man, first of all, awesome stats. I'll definitely be using them in future deck...very quotable.
I want to address something though, and it's not an issue with your research or this post per se, but more of a general industry argument... For takeaway #5, you're basically saying that SEO is responsible for Organic Search being one of your best converting channels. Whereas this may be true in this case, one does not equal the other. I've seen far too many SEO reports that make the claim that because Organic Search traffic is good, that SEO is responsible. I'm an SEO myself and I stand by it myself, but poor logic doesn't help make that argument. Proving the value is a lot harder than that unfortunately.
Hey Paul,
That's a great argument, but kind of a bummer. Would it be fair to say that good SEO is responsible for the organic results at least being where they should be? I mean that if the SEO was really bad, that channel could be broken so the SEO can at least take some credit.
Or is this still an overstatement?
Hi Paul, thanks for the comments and very good point.
I agree it's difficult to attribute all the value of organic search to the SEO activity. There could be repeat visitors coming back via branded search or it could be people visiting driven by tv advertising or other above the line advertising driving organic search. Since we've lost visibility on brand v non brand keywords the issue has accentuated.
For SEOs, focusing on the organic traffic and revenue uplift is a good place to start reporting. Particularly for any focus area keywords they have been working on.
SEOs can also compare organic traffic & revenue growth vs other channels to see if it outperforming the website average to provide further context.
A final point I'd like to make to back up Joe's response is that while SEOs can't take all the value for all the organic traffic and revenue, they are its guardian. So by demonstrating its importance to the website they go a long way to justifying their existence to safe guarding it.
HI Alan,
I simply loved reading the whole post, it was very well crafted and backed by right data pointers. Although, you are suggesting the avg conversion rate is between 1.5-2% , our ecommerce clients are having much higher conversion rates due to following techniques
- We have used personalized email-marketing (not bots) to engage our clients.
- Our social media engagement plan is combined and very well co-ordinated with customer support strategy. The communication between SM engagement staff and customer support is kept at priority, the SM staff acts as eyes and ears for the customer support.
- Our SMM strategy is really dynamic, we focus on real-time events on social media and SMM to engage target audience.
- For seo, the best content We have got for e-commerce was user-generated, so we have given that lot of focus and value.
Thanks,
Vijay
Hi Alan,
Great and deep analysis of both sectors. Worth reading it. Just aquick one, what about conversion rate of adwords as you have shared revenue share but didn't mentioned about conversion of PPC. Thank you
Hi Ikkie,
I'm glad you like the study. I'm afraid the study didn't go so far as to break out benchmark conversion rates by channel. I would expect AdWords to have a higher than average conversion rate. Bing and Yahoo might be slightly higher than AdWords as a conversion rate but way off for conversion volume. I'll keep your question in mind for the 2017 study!
Alan
Thank you for the response. Yeah, it would be interesting to see conversion % for all paid comapaigns. :)
Hi Alan
Excellent studio !!
Today are very important all the points that reflex to convert visitors into sales. In fact I believe that work around them adversely impact our results
Once again, a very interesting blog post. I am always impressed with the volume of data used for this study. I am not sure I agree with all you findings, point 11 in particular intrigues me.
Are you sure that High Traffic == Higher Conversion Rates or can be it that Higher Conversion Rates lead to more traffic?
Also you provide some very interesting findings regarding average conversion rates. Would you be able say whether sites with above average conversion rates have higher conversion rate variability than sites with below average conversion rates?
Thanks,
Nick
Hi Nick,
Nice to hear from you again. Thanks for the comment. I'll endevour to answer your questions.
Q1. Yes there is definitely a "chicken and egg" question here. I can see how a higher conversion rate would lead in turn to higher traffic as the additional converters are more likely to come back to the website again. I guess you could also argue a high conversion rate indicates it is a more user friendly website so event those who don't convert are more likely to return. I would imagine both those phenomenon are at play. However from my knowledge of the websites in the study, the bigger factor is those with high conversion rates and higher than average traffic levels is they are well known brands. Maybe they have large advertising budgets, maybe they have a prominent presence in the high street or maybe they are well established having been around for decades. But from my view on the data it appears that they are well known which leads to more traffic to the website and website traffic that is more comfortable pulling the trigger on the purchase.
Q2. I 'm not sure I understand. Would you mind rephrase the question please?
Alan thanks for taking the time to respond.
Q2 explained:
First the general idea is that websites with low conversion rates will see sporadic conversions, whereas sites with high conversions rates will see consistent conversions.
Example, two websites each with 100 sessions a day for 10 days:
Site A Low CR (1%): (day | conversions) = (1|0), (2|0), (3|3), (4|0), (5|1), (6|0), (7|0), (8|0), (9|6), (10|0)
average conversion rate = 1% conversion rate variance = 3.87
Site B Low CR (1%): (day | conversions) = (1|2), (2|3), (3|2), (4|3), (5|2), (6|3), (7|2), (8|3), (9|2), (10|3)
average conversion rate = 2.5% conversion rate variance = 0.25
So my question to you is, can you check your data to see whether it supports this theory?
This is awesome. It's good to see the insights on site speed / bounce rate. I'm surprised e-mail does so well - I assume it's due to follow-up emails after a prospective customer views an item.
Are you allowed to say how many websites (as opposed to dollar / clicks) were involved in the study?
Hey Alex,
Yes Email was the suprise package allright.
My reading of it is:
a/ Email is a well curated list, people tend to have bought from you before or at least demonstrated an interest. So quite likely to convert.
b/ Think of your social media followers. Think of your organic reach to your social media followers, maybe 5%? Now think of your email open rate, maybe 15%. It's usually multiples of your organic reach, in this case 3x. So more traffic and revenue follows. There's also the likelyhood that 100% of your email list will see the email headline too, if you use this as an impression now your email gets 20x more impressions than social.
Nice post.
Hi Alan,
Great data, really gives me a lot to think!
There are many important social channels these days, but it's awesome and surprising to see e-mail having such a high performance. In general, it's good to keep in mind which social channels can impact each type of business.
I'd like to suggest for the next study: the impact of branded organic search vs generic keywords and its correlation with direct traffic. Would be interesting to know about this user behaviour - the percentage of people who keep using search engines even if they know which website they want to visit.
Notes taken Alan! Thanks for sharing this.
Hi Alan
Great article.Congrats on that. I have a question for you. How is the social media impact on the conversion rate and Is it also a decision maker in most cases ?
Hi Alan,
Great insights, thanks for that. With regard to your comment about digital marketing "economies of scale", is there any chart to show this changes based on scale. That would have been really nice.
Thanks again!
Great post, Alan. Does the study take into account proliferation of apps as well, as a source of mobile traffic and transactions? Or is it just restricted to websites?
And, is there an explanation for why there is such a heavy negatiove correlation betwen AOV and conversion? Especially given "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)"
Rajeev
Hi Alan
This is great stuff! Is the data from Irish websites only or is there a mix of countries in there?
- Neil
Very interesting to see Facebook traffic quadruple. Did anything change with how you approached Facebook? Is that organic or is there a paid media component to that too? And my first thought -- in previous years many in the industry would lament the fact that Facebook traffic was misreported by GA (if memory serves me correctly, it was reported as direct). Is is possible that reporting has improved as well as there being an increase in traffic from Facebook?
Great post, Alan!
DOes the study take into account the mobile transactions that are happening through apps? Or is it only mobile web? Would that explain mobile contribution of 42% traffic but only 21% of transactions?
Also, is there an explanation for the large negative correlation between AOV and conversion? Especiall if 67% of the revenues come from Google traffic and Google traffic has higher AOV.
Hi Alan
Surprising yet awesome stats!
Just a small question, As stated in point 9 Display Ads are not of much help in driving website traffic. Will Programmatic Ads and RTB of any use in it?
Dear Alan,
thanks for sharing all the insights with us.
One point is in my mind:
Is it all about B2C with a focus on travel and retail as you mentioned?
Which relevance have your insights for the B2B eCommerce?
Are there any cases, studies, experiences for B2B?
Cheers,
Stefan
Does your Google PPC data include Google Shopping? It would be interesting to see the breakdown for Shopping vs. Search ads.
Great research. Many thanks.
May we respectively request though that you use bigger Jpegs in your screengrabs though. The text in the graphs is beyond tiny.
Great article. I'm curious to know more about instagram's effects on e-commerce.
Hey Martin,
Thanks for the question, it's a good one. I've 2 points for you.
1/ Instagram didn't register as a traffic source in the study. That means it drove less than 1% of traffic.
2/ We've been using Instagram advertising since it launched via Facebook about a year ago. While Facebook is fantastic for driving cheap targeted website traffic we've found Instagram users love to engage with an ad on Instagram, but are loath to click away from Instagram. My take is, this is how they interact with the organic content so that's how they will interact with the ads. Jutt like we are accustomed to clicking on an article on facebook and leaving our newsfeed to read it, we are happy to visit websites from ads on Facebook.
Alan,
Great information - thanks for sharing. It looks like you didn't see much traffic or conversation from social channels besides Facebook. Is that correct?
Thanks,
Tim
Hi Tim,
Yes that is correct.
The study focused on direct response. Did the medium generate traffic and did it generate sales.
A lot of the value offered by social media happens on social media in the form of likes, comments and shares.
Search marketers tend to snigger at fluffy engagement metrics.
I used to too. Now I understand that an engagement can translate into Organic Brand traffic or direct conversions down the road.
Maybe we need to follow up with a social media engagement study?
Really love this study, great job! But...am I missing something? Your traffic & revenue charts add up to more than 100%. Sorry if I'm just reading it wrong.
Hey Soccer Corner.
Yes it is confusing allright.
So for each of the individual participant websites the charts add up to 100%.
But when you put them all together they will add up to more.
Lets say half the respondents didn't use email at all, they would have 100% of traffic accounted for and 0% for email.
Then there will be a positive average figures for all those who do use email.
I hope that makes sense.
Got it! Thanks for the clarification!
Hi Alan,
great study.
Is the data you've researched worldwide or only data from US websites?
Thanks Claerhout,
By and large the traffic is European, there is US traffic in there too.
Last time I dove into the date I found the average KPIs are generally consistent between US & Europe.
Very good study
But how do you say that bounce rates have zero correlation with conversion rates? Bounce rates denote that users leave the page immediately after opening the page, so by this point, it can be easily associated with conversion rates.So, I feel a bit confused in that point. Can u clear my doubt??
I am shocked that your study revealed that the average conversion rate is that low. Only 1.48%!
My take on why mobile has a 42% share of traffic but only a 21% share of revenue, is because, in part, so few site have fully updated to Accelerated Mobile Pages to better target mobile buyers and are maximizing the use of structured data.
Another issue that online shopping carts have to content with when it comes to mobile shopping is the typical short attention span of mobile customers. It is challenging enough with desktop users - it’s difficult to hold an individual's focused attention for longer than a couple minutes. The bounce rate of users on mobile devices may be even higher, as they more often switch back and forth between multiple sites as well as search engines. Being on-the-go shoppers means marketers must take their behaviors and preferences into keen consideration.
Thanks for creating and sharing a great post.
Hi Jeannie,
Thanks for your input.
What would you expect an average conversion rate for a travel or retail e-commerce website to be?
On the AMP point, Yes I agree that faster websites will increase conversion rate.
However, while structured data is an organic coverage factor I don't see structured data as a conversion rate factor. Google's Chief Economist Ha Varian studied ad placement on the SERP and it's impact on conversion rate and found no correlation. The corollary of this is that organic position wont influence conversion rate eg your conversion rate will be the same in position 4 as position 2.
I think the major issue with mobile conversion is directly related to the size of the average thumb. People simply hate entering credit card details on a phone. Removing this point of friction with an Amazon type "buy with one click" will unleash mobile conversions in my opinion.
Hi Alan,
Great research and nice article. Keep posting!!!
Hi Alan
Thank you for writing this article
your study is awesome insightful!!
I guess your effort for ths study is very hard...
so I hope translate this to korean
would I translate this??
I personally think, though google adwords dominate a lot on google but Seo can still survive and compete in the long term.
I do love a good e-commerce study around conversion rates. Some good points were made, I especially agree around display ads and email ROI. Nice work.
I do however, disagree that a high Bounce rates will have little effect, when bounce rates have been improved - for me in pretty much all cases it has resulted in an increase conversions. I could be an anomoly though :)
Cheers
Tim
beautiful article which is informative also. the points reveals that the digital marketing have been increasing and it is very important for business promotion.