This article treats the major trends in e-commerce according to a study conducted by Marketing Sherpa, a research firm specialized in reporting marketing stats, and Magento, one of the most popular e-commerce platforms in the world. The study also gives insights on other issues like managing marketing channels, allocating budgets, business models and other aspects concerning the e-commerce market.
These findings should concern every e-commerce business director or marketer because it involves surveying over 4000 subjects, from all of the continents. Almost a half of the respondents target the B2C market.
Before starting to look into trends, here is a list of 5 metrics that matter the most to determine success for an e-commerce website:
Customer Lifetime Value – reveals the profit that one customer brings to your business
Conversion Rate – transactions/visits to your website
Customer Satisfaction Index – scalable measurement of satisfaction with products, offers, delivery, shipping costs and other important elements of your e-commerce website
Net Promoter Score – scalable measurement of customers satisfaction and their likelihood to recommend your website to their friends
Marketing ROI – profits generated by your marketing efforts
Data Analysis represents the infrastructure for any marketing strategy, even if you like it or not. The reason to analyze data is clearly obvious: no one could ever guess the impact of an action over someone else’s behavior. In e-commerce, data is the key element to formulate a theory about the customer’s behavior. Unlike brick-and-mortar stores, e-commerce websites need to gather as much information as possible about the customers while they’re visiting the website. Thus, make sure that your web analytics software is reporting the correct data and then have a clear procedure to follow whenever you have to start applying something new on your website.
Let’s take a look at how do e-commerce companies approach Analytics:
More than 40% of the respondents declared that they DO NOT use a clear procedure as a routine, but they follow some guidelines and they approach data analysis as an informal process. This finding is surprising given the fact that without looking into data it’s impossible to measure any progress made, nor to see where should the investments go in the future.
Some tips on performance measuring:
> identify the segments of traffic that bring 80% of the company’s profits
> address to these segments with personalized and dynamic content on-site
> optimize the landing pages that target these segments of traffic
> measure the efforts based on measurable goals
Conversion rate optimization and testing
The times when the marketer’s experience and instincts ruled the world are gone. Nowadays, the technological progress offers to marketers professional tools to get the most out of their efforts. Conversion rate optimization is not just a cool trend everyone talks about, but a truly effective tactic to make sure your website always react to the customer’s moves. One of the best methods to optimize a website is A/B testing, a technique that will improve the performance of your website step by step, based on real time results.
How do e-commerce companies approach optimization and testing:
Conversion rate is the third metric that these companies monitor regularly. Why do they consider CR a vital metric for their business?
Here is a list of the benefits of focusing on conversion rate to measure your website’s performance:
> it reveals the amount of people who actually buy from your website
> it can be measured for particular segments of traffic
> any increase in conversion rate usually leads to an increase in sales
> if it is monitored on the long run, it will assure the profitability of the e-commerce website
> it helps marketers to adjust their traffic acquisition policy and to lower costs with paid traffic
> it implies website testing, which means no more arguing over how a webpage should look like
The impact of website testing on the e-commerce companies success or failure
Companies that approach conversion rate optimization with website testing are certainly on the way to success. As the study’s findings reveal, companies that test changes before implementing them on the website are the ones that obtain a higher success score. Let’s try to explain these results.
When you decide to make a change on your website, you have to accept that it involves taking some risks:
> the change can lead to a decrease in the website’s conversion rate or sales
> the change takes time, money, a programmer and a web designer, but you don’t even know if it’s going to be successful
> you cannot measure the change’s impact on the website’s performance immediately, nor in real time
> your website’s visitors may not like your new design
A/B testing eliminates these risks instantly because it involves real time reporting, based on the customer’s moves on site. Their reaction to a design or content change will be shown in results: they either complete the transaction or not. The conversion rate is the key metric to measure the impact of a change on your website. As far as the costs are concerned, you don’t have to pay for programming or design services given the fact that you can set up an A/B test within 10 minutes with an A/B testing software that can be used starting from 19$ per month.
Finally, the moves to determine success for an e-commerce business are:
> make sure that you analyze the correct data
> set up your goals
> monitor the right metrics
> test any change that you intend to make on your website
> choose a conversion rate optimization software and use it wisely
Consider as a solution Omniconvert, an easy-to-use tool for marketers. It allows you not only to do A/B testing, but to generate data about the customer’s preferences and behavior and to personalize their experience through creative display on site.
It is not enough just to analyze data, but to start to take action. Once you’ve decided what are the right metrics to monitor, start testing your hypotheses and observe what is the impact of these changes over the metrics. From this moment, you can consider yourself on the right way to determine success for your e-commerce business.