Think You Know Everything About Ecommerce Growth? Think Again
Ecommerce growth is driven by many different factors. Here are some growth drivers that you might not have thought of.
There are some absolutes when it comes to what drives growth in digital commerce.
Or are there?
To be sure, quality traffic, effective merchandising strategies, compelling mobile experiences, and attractive products and promotions all play key roles. But a new guide, Ecommerce and the Quest for Growth, uncovered some surprising, eye-opening truths that can have a big impact on growth and create separation between retail’s leaders and laggards.
The proven formula for growth includes the following key performance indicators (KPIs):
- Gross merchandise value
- Conversion rate
- Average order value
- Average selling price
- Units per order
If you think you know everything there is to know about each of these growth levers, read on. You may be surprised to learn that:
Growth in order volume has the biggest impact on revenue growth
Order volume growth, at 18%, dwarfs average order value (AOV) growth, which comes in at 2.7%. AOV’s contribution is nominal but is important in that improvements in this metric are primarily due to growth in units per order (1.9%), not fluctuations in pricing, as one might expect.
Mobile is where all the traffic growth is, but desktop revenue is still going strong
Traffic growth to ecommerce sites is much higher in mobile — in fact, desktop traffic growth is in negative territory — but ecommerce revenue in desktop was up a healthy 11% in the first half of 2018, while conversion rate improved by almost 10%. That suggests that the decline in desktop traffic may have been caused by low-quality visitors with lower propensity to convert.
Social media impact is widely varied globally
Outside the U.S., the impact of Facebook and Instagram is less potent. In Europe, half the revenue attributed from social media traffic comes from sources other than Facebook and Instagram. And, in Russia, the social network VKontakte accounts for nearly 100% of social media gross merchandise volume (GMV) and two-thirds of social media visits in the “other” category.
Google does not dominate search, organic or paid, on a global scale
Google is, of course, the monster of search in the U.S., and drives a great deal of valuable traffic to ecommerce sites, but that is not the case globally. In terms of driving orders and revenue, Baidu (China), Yandex (Russia), and Naver and Daum (South Korea) dominate their large and lucrative markets.
Mobile conversion rate does not crack 1% anywhere in the world, even Asia-Pacific
In fact, mobile conversion in APAC, an acknowledged global leader in mobile adoption, is the lowest in all geographies that we study, at 0.52%. When compared to North America and Europe, the region also has the lowest add-to-cart rate (5%) and checkout rate (29.2%), and the highest cart abandonment rate (91.3%).
Retailers err in driving shoppers straight from the product page to the checkout page
Counterintuitive as it may seem, it’s important to maintain the extra step of the “view cart” page. It gives shoppers the final opportunity to verify their orders and modify their carts including removing items, which has some of the highest interaction rates of the “view cart” page. According to Salesforce data, retailers and brands see a 14% improvement in conversion when traffic is sent to the “view cart” page vs. directly to checkout.
The guide was created to help retailers and brands pinpoint the areas that can have the biggest impact on growth, includes insights and recommendations backed by reliable data benchmarks from more than 2,500 leading retail sites and more than half a billion ecommerce shoppers — wrapped up in analysis from Salesforce retail experts dedicated to helping retailers and brands drive revenue growth.
For more insights, in-depth analysis and customer examples of ecommerce growth, download Ecommerce and the Quest for Growth today.