Is your website beating, meeting, or behind the industry average?
Wolfgang Digital’s 2017 E-Commerce Benchmark KPI Study is out with an even bigger sample size than ever before. Analyzing 143 million website sessions and $531 million in online revenues, the study gives e-commerce marketers essential insights to help benchmark their business’s online performance and understand which metrics drive e-commerce success.
This study is our gift to the global e-commerce industry. The objective is to reveal the state of play in the industry over the last 12 months and ultimately help digital marketers make better digital marketing decisions by:
- Better understanding their website performance through comparing key performance indicators (KPIs) with industry benchmarks.
- Gaining insights into which key metrics will ensure e-commerce success
You can digest the full study here.
Skim through the key takeaways below:
1. Google remains people’s window to the web, but its dominance is in decline.
The search giant generates 62% of all traffic and 63% of all revenue. This is down from 69% of traffic and 67% of revenue in last year’s study. In numerical terms, Google is growing — it’s simply that the big G’s share of the pie is in decline.
2. Google’s influence is declining as consumers’ paths to purchase become more diverse, with "dark traffic" on the rise.
This occurs when Google Analytics doesn’t recognize a source by default, like people sharing links on WhatsApp. Dark traffic shows up as direct traffic in Google Analytics. Direct traffic grew from 17% to 18% of traffic.
3. Consumers' paths to purchase have gotten longer.
It now takes 12% more clicks to generate a million euro online than it did 12 months ago, with 360,000 clicks being the magic million-euro number in 2017.
4. Mobile earns more share, yet desktop still delivers the dollars.
2017 is the first year mobile claimed more sessions (52%) than desktop (36%) and tablet (12%) combined. Desktop generates 61% of all online revenue, with users 164% more likely to convert than those browsing on mobile. Plus, when desktop users convert, they spend an average of 20% more per order than mobile shoppers.
5. The almighty conversion rate: e-commerce sites average 1.6%.
E-commerce websites averaged 1.6% overall. Travel came in at 2.4%. Online-only retailers saw 1.8% conversion rates, while their multichannel counterparts averaged 1.2%
6. Don’t shop if you’re hungry.
Conversion rates for food ordering sites are fifteen times those of typical retail e-commerce!
***Correlation explanation: The most unique and most useful part of our study is our correlation calculation. We analyze which website metrics correlate with e-commerce success. Before I jump into our correlation findings, let me explain how to read them. Zero means no correlation between the two metrics. One means perfect correlation; for example, "every time I sneeze, I close my eyes." Point five (0.5) means that as one metric increases 100%, the other metric increases 50%. A negative correlation means that as one variable increases, the other decreases.
From our experience compiling these stats over the years, any correlation over .2 is worth noting. North of 0.4 is a very strong correlation. I’ve ranked the following correlations below in order of strength, starting with the strongest.
7. Sticky websites sell more (0.6).
The strongest correlation in the study was between time spent on a website and conversion rate (0.6 correlation). By increasing time on site by 16%, conversion rates ramp up 10%. Pages per session also correlated solidly with revenue growth (0.25).
8. People trust Google (0.48).
According to Forbes, Google is the world’s second most valuable brand. Our figures agree. People who got more than average organic traffic from Google enjoyed a savagely strong conversion rate (0.48). It seems that when Google gives prominent organic coverage to a website, that website enjoys higher trust and, in turn, higher conversion rates from consumers.
9. Tablet shoppers love a bit of luxury (0.4).
Higher-than-average tablet sessions correlated very strongly with high average order values (0.4). However, pricey purchases require more clicks, no matter the device.
10. Loyal online shoppers are invaluable (0.35).
Your best-converting customers are always your returning loyal customers. Typically they show up as direct traffic, high levels of which correlated very strongly with conversion rates (0.35).
11. Speed matters (0.25).
Average site speed was 6 seconds. This is far higher than the generally recommended 2 seconds. There was a strong inverse correlation between average page load time and revenue growth (0.25). Reducing the average load time by 1.6 seconds would increase annual revenue growth by 10%.
12. Mobile is a money-making machine (0.25).
Websites that got more mobile pageviews (0.25) and more tablet pageviews (0.24) grew revenue faster.
13. Email pays dividends (0.24).
Email delivers three times as much revenue as Facebook on a last-click basis. Those who get more traffic from email also enjoy a higher AOV (0.24).
14. Bing CPC represents a quick win (0.22).
Websites with a higher share of Bing CPC traffic tend to see a higher AOV (0.22). This, coupled with lower CPCs, makes Bing an attractive low-volume high-profit proposition. Bing has made the route into Bing Ads much easier, introducing a simple one-click tool which will convert your AdWords campaigns into Bing Ad campaigns.
15. Pinterest can be powerful (0.22).
Websites with more Pinterest traffic enjoyed higher AOVs (0.22). This demonstrates Pinterest’s power as a visual research engine, a place where people research ideas before taking an action — for example, planning a wedding, designing a living room, or purchasing a pair of pumps. The good news for digital marketers is that Pinterest recently launched its self-service ad platform.
Black holes
We used Google Analytics to compile the report. Once installed correctly, Google Analytics is very accurate in the numbers it does reports. However, there are two areas it struggles to report on that digital marketers need to keep in mind:
- Offline conversions: For 99% of our data set, there is no offline conversion tracking setup. Google is introducing measures to make it easier to track this. Once marketing directors get visibility on the offline impact of their online spend, we expect more offline budget to migrate online.
- Cross-device conversions: It’s currently very difficult to measure cross device conversions. According to Google themselves, 90% of goals occur on more than one device. Yet Google Analytics favors the sturdy desktop, as it generates the most same-device conversions. The major loser here is social, with 9 out of 10 Facebook sessions being mobile sessions. Instagram and Snapchat don’t even have a desktop version of their app!
Google is preparing to launch enhanced reporting in the coming months, which will give greater visibility on cross-device conversions. Hopefully this will give us a clearer picture of social’s role in conversion for our 2018 study.
The full report is available here and I’d love to answer your questions in the comments section below.
Great article. Above all, I found the Bing Ads option to be very useful, since it is normal for us to forget about this search engine and focus on Google. I will definitely try to create campaigns in Bing to see what effect it has on sales. I agree that Google is currently the biggest, but there are many alternatives that can be more effective now that there is not so much competition.
I will reread the article more slowly to test options for our customers.
Thanks!
Hey Richard,
Thanks for the comment.
Yes Bing seems to be a no brainer offering cheaper clicks, higher AOVs and a one click adwords to bing campaign create.
Tor Thompson the head honcho on Bing revealed at a conference recently that implementing the 1 click campaign create solution has been one of Bings most successful projects in recent years.
Very interesting stuff, love the correlation calculations you did and I'm suprised that Google traffic is on the decline. I guess that can be explained by people doing more research, etc and accounting for "dark traffic" that you mentioned. Awesome post Alan!
Cheers Nicholas. In numerical terms Google traffic is most certainly growing. It's just it's share of the pie that is in decline, ie other channels are growing faster. tx for the kind words.
What an amazing study! Loved it last year and loving it this year too! The thing that surprised me last year was the fact that bounce rate was not correlated to conversions. The thing that caught my eye this year is that Facebook Organic drives ~3X more traffic than Facebook CPC for almost all categories. Organic posts get so little mileage on Facebook. What really surprised me is that Facebook CPC has 0% share of revenue across all categories. I can't believe that is true! What's the implication then? That paid social is ineffective? Or that it is not measured correctly?
Google Analytics understates Facebook's role in driving conversions from a Last Click Attribution basis. Even on a first click basis, we often see it under-reporting conversions that we know are coming from Facebook or Instagram.
This is very much in line with your comment about Dark Traffic. In fact, we assume that as a brand new startup with limited brand awareness, any Direct Traffic/Conversions coming from a New Visitor is Facebook traffic. That's 90% of our 16% Direct Traffic!
Our e-commerce conversion rate is 1.64% (rising to 5% on a good day!) Consistent with your findings, we find a higher correlation between revenues and number of pages viewed and average duration on site. (We find purchasing customers viewing 20 pages, spending 30 min on site!)
In Singapore, most of the browsing happens within the Facebook mobile app, so attributing traffic and conversions to Facebook accurately is a big challenge for us.
What would be interesting for next year perhaps would be to layer in a survey question about Facebook ad spend as share of revenue so we can compare that number with traffic and revenue generated!
Would also be interested to see a breakdown of the companies surveyed in terms of size, country and industry!
Hey Debbie,
Yes the Facebook figures are unfortunately not as robust as we'd like them to be. Google Analytics doesn't measure social or app traffic well. Hopefully the upcoming attribution report solves the cross device issue.
We are actually working on another study right now (beyond Google Analytics) in which we are seeing if we can link social activity with conversion.
I'll keep you posted.
I suppose this study will be a B2C but when we talk about a B2b the data
changes as they enter a series of variables, that a purchase is not
impulsive but is reflexive and clear before performing a conversion
before the client has been able to enter 4-5 times in the store to compare price among the competition.
A greeting and good post
Great study Alan! Interesting to see the power of Pinterest and the declining of Google's power. Thanks for sharing!
Good post Alan!
From my point of view and in my place, an e-commerce, we must continue giving the same importance and taking care of both the mobile version as a dessert. Visits go up in mobile version, conversions arrive more through the PC ... But what will be the next trend? Will mobile conversions exceed desktop conversions? What do you think?
Hey Banshe,
I think the barrier to buying on mobile phones is credit card numbers disagreeing with fat fingers. Once people can "buy with one click" on their mobile easily we will see mobile conversion rates on e-commerce websites rocket. Amazon's "buy with one click" patent expired very recently so I'm expecting to see it become much more prevalent on e-commerce websites.
Brilliant post! We should not be stick with only Google since there are lots of another growing options to go for. I think we should focus on every terms have been discussed in this post like Bing CPC or Pinterest.
Thanks for the kind words Pratibha. It's exciting times to have more channels coming to the fore.
Hi Alan
The truth is that I've never tried a campaign on a search engine other than Google and it might be interesting.
Thanks for the post
Hey Luis,
Lots of digital marketers are in the same boat. Managing an AdWords campaign effectively is very demanding so it easily absorbs all your time and budget. I'd love to hear how people get on putting a bit of search budget on Bing and on Pinterest, the visual re(search engine).
Great Study it is!!! Ecommerce Website Development have a great boom in Market. Thank you so much for sharing this wonderful article. Keep Posting always.
I am surprised YouTube is not specifically mentioned with it being the #2 source of traffic and all!??? Hopefully that means not many people have figured that out yet,
"Mobile earns more share, yet desktop still delivers the dollars." Yea I find that to be true as well.
Thanks for sharing that info!
That surprised to me too :)
Hey Oldest & Luis, Im guessing you are referring to the fact that YouTube is the worlds second largest search engine. The study measures website traffic. So although Youtube generates lots of video views that activity happens on YouTube. It's not so hot for sending traffic direct to e-commerce websites. Does that answer your question or did I get the #2 part wrong?
Hey Alan,
I really liked the second point about "Dark Traffic"!
With increase in regular use of apps like WhatsApp and Messengers it can be really confusing to identify the real sources of your direct traffic.
Really appreciate you covering and highlighting this point.
Extremely useful and interesting post. Thanks a lot!
"Reducing the average load time by 1.6 seconds would increase annual revenue growth by 10%." - This is huge!
Hell yeah Vesa.
The average 6 second page load speed was the biggest problem the study uncovered.
While the offline shopper will tolerate traffic lights, car parks, trolleys, crowds and queues, the online shopper will ouke and bounce if you put 4 extra seconds between them and their purchase!
My two Cents: Google attaches a great deal of priority to "Call to action " and the "Above the fold content" apart from Speed. Expedia is a classic example to this anecdote. The company made an extra 12 million just by adjusting extra button on their website thanks to the feedback from their analytics.
Thanks Alan, great summary.
I'm a little surprised to see no mention of the impact Amazon's growth as a shopping search engine has had on Google. They have done a phenomenal job of becoming the default for many online shoppers in the last couple of years.
Hey Igor,
Great point. Lots of people see facebook as Google's arch rival but Amazon have to be right up there too.
The reason they dont show up is we are tracking traffic to e-commerce websites.
So either traffic doesn't flow from Amazon direct to websites OR it ends up as dark traffic.
Awesome post!! I read your post and I like 15 essential tips but last 2 tips are important apart from Google. Now I will try Bing CPC and Pinterest for E-commerce site.
Hey Viral,
I'd love to hear how you get on with those channels. How does volume of conversions and cost per conversion cpmpare to Google.
I have a couple of eccomerce clients and some of the above data is going to be very useful in explaining to them our strategy. Especially the one around searching on mobile but buying on desktop.
Great stuff SEOVP. Delighted the study is helpful to you.
Thanks for this great post. We recently conducted a small study on how top 50 eCommerce website organizes their product category pages. The way they formatted thier pages, it's obvious that Google still holds the highest trust factor.
Hi! Is that small study public? I'd love to know your conclusions!
me too
I think for a new e commerce choosing facebook as primary traffic source will be more profitable source
Great article Alan – and thank you. I am sharing this one with my followers. All the best, – Klaus
Thank you for the great data!
Thanks for this great post, Alan. I have punted on starting a project with Pinterest for a while now, but it seems that I may need to rethink that avenue. Everyone focuses on Facebook and to a lesser extent Twitter and Instagram, but the new ad platform may help in drawing folks in on there.
Hey Scott, Id love to hear how your Pinterest project goes. The great thing is a lot of the creative formats that you use on Facebook, Instagram and Snapchat also work on Pinterest, so it's easy enough to put one campaign out across all the channels.
As you've said, I see the biggest challenge in cross device conversions measuring as well. For example, I get pinged by add on Facebook Mobile but, in the end, I buy via Search on Desktop. Really great study and insights how the channels perform in different fields.