5 Ecommerce Metrics You Should Be Tracking

AUGUST 8, 2013 • FERAS ALHLOU

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When it comes to ecommerce analytics, business owners and marketing managers typically focus on metrics like conversion rates, number of transactions, and average order value.

These are valuable, and should be monitored. After all, measuring such outcomes is what directly impacts revenue and the bottom line.

Thanks to Google Analytics as well as Mixpanel, Flurry, Site Catalyst, and other analytics platforms, these ecommerce metrics are readily available to site owners.

Conversion rates, number of transactions, and average order value are easy to measure.

While focusing on the outcomes is key, close attention to tracking user behavior and interaction with the site or mobile app will also yield significant incremental improvements. Here are five interactions you don’t see a lot of people measuring, when they really should be.

1. Product Categories

You can easily report on top products, what’s selling, and what’s not selling on your website. However, go beyond that and consider rolling up your reports to the product category level. As can be seen in the screenshot below, some categories can be driving more revenue than others. In this example, it seems that men — or those who buy gifts for men — spend more money on watches.

Setting product categories can help you determine which products are selling best.

Once you have your categories identified, segment one layer deeper to get insights on product categories by traffic channel, campaign, or even by keyword. See what’s driving high-ticket items and categories, and where the marketing dollars should continue to flow

2. Product Comparison

Many ecommerce sites allow shoppers to list products next to each other for ease of comparison — dimensions, features, pricing, and other features — and also for an opportunity to upsell the higher value products.

Create a metric to track product comparison data.

If your site has thousand of products, or even hundreds, it’s not practical to list them all in a comparison table. What you typically see is a selector box for shoppers to check on the products they want to see next to each other.

One useful measurement technique in this scenario is to track the specific user interaction — with an “event” if you are using Google Analytics or Mixpanel. From there, you’re able to track the products that are getting compared. You can then run reports on what products are purchased and each product’s presence — or lack of presence — in the comparison interactions, and assess any correlation between the two.

In addition, you may find there are products you prefer to be considered yet aren’t getting selected by users for comparison. Now that you have this information, you can take action. For example, you might promote your preferred products on banners, on your home page, or in your email marketing campaigns.

3. Live Chat Tracking

You have probably seen live chat features on sites more often than not. You come to a site to check out a service or a product and you’ll see an invitation — sometimes a pop-up — asking if you would like to chat with a customer support agent. I’ve seen ecommerce businesses where the average order value is 25 to 30 percent higher when a purchase included a live chat.

This is not a general recommendation for each site owner to run live chat. Test it in your environment to assess what works for you.

If live chat is a service you offer, or are considering, it’s important that you track how many of your visitors are using live chat and of those visitors, determine:

• Conversion rate;
• Average order value;
• Overall generated revenue.

If you implement live chat correctly, you can further measure the impact on product purchases in specific categories. For example, if there’s a high correlation between high-ticket purchases and live chat interactions, it might be profitable to hire additional staff for extended live chat hours.

4. Shopping Cart Removes

While it’s common to measure “Add to Cart” clicks to track which products are added to the online shopping cart and track based on where that action occurred — whether they are on the product page, promo page, or a product modal — it’s also useful to also track cart removes, or the products that visitors added to cart and then later removed.

Let’s say you sell trampolines and want to sell add-on items such as safety nets. If you start seeing a lot of cart removes of safety nets, maybe it’s time to consider offering a discount on the combination of the trampoline and the safety net or send follow-up emails with a promotion to shoppers who didn’t complete the purchase of the safety net.

5. Know Your User Segments

If you follow my articles, you know I emphasize segmentation. In actuality, I don’t think I emphasize it enough. Real gems are found in zooming in on a segment of users along with the purpose of their visits. If you are new to the concept of segmentation, write down the various types of customers that buy from you.

For example, you might be primarily a consumer product store, but also have a reseller or a distribution channel. These resellers are identified upon login and your system will present the pricing and discounts that are unique to them. When tracking transactions and revenue, it’s important to segment your reports by these user types. Otherwise a large order at a highly discounted price for one of your resellers will skew your revenue and conversion data.

Below is a screenshot of data from an ecommerce site in the education industry. The site segments the visitors by graduate and undergraduate, and reports on the sales numbers accordingly. You can see that while the graduate visits are roughly 19 percent of the total, the revenue from those visits is roughly 30 percent of the total. If the reporting was just on aggregate visits and aggregate revenue, the site would have no idea about how each of these segments are performing and its contribution to the bottom line.

Groups with fewer visits sometimes generate more revenue.

via Practical Ecommerce » Articles http://www.practicalecommerce.com/articles/4137-5-Ecommerce-Metrics-You-Should-Be-Tracking

Shopping Cart Usability : Why a simple, honest checkout sequence (usually) wins

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by Toby Biddle

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When it comes to e-commerce sites and shopping cart flows, usability testing is more than good practice. It’s a precious tool that helps uncover missed opportunities and dollars left on the table.

I’d like to present a handful of case studies and A/B tests that indicate a streamlined, “no BS” e-commerce flow with elegant user experience—where the site is honest and clear with visitors about how checkout works and what happens next—usually takes the cake for best conversion rate. The caveat is, keep on testing. As the last case study will suggest, there are always surprises.

Lesson 1: Do what you say you’re going to do

In business and in life, integrity is key and we often prefer people who do what they say they’re going to do. Why should buttons be any different?

Curious Country Creations, with the help of their digital agency, benefited from a nearly 88% lift in clickthroughs to the next page in the purchase process when they swapped their original button text on the page below from “Submit” to “Go to Payment Options.”

What do they sell? Dried plants and flowers for home decor.

“Submit” button

“Go to Payment Options” button

The takeaway here is, if you’re wondering what’ll convert best on that button, ask yourself: does this button do exactly what its text suggests? The visitors in this test knew exactly what they were in for when they clicked the “Go to Payment Options” button, and I’ll bet when they hit the payment options page, they were anything but surprised, which recalls another powerful checkout usability maxim: keep the surprise factor low! It’s a shopping cart, not a birthday party.

Lesson 2: Eliminate distractions, tempting as they may be

It’s a tough choice. You know it’s useful for your customer to see an order summary before checkout—perhaps it’s even the more transparent and “honest” approach to checkout UX—but it dominates a large swath of real estate.

Is it better to provide an order summary during checkout, or minimize distractions during the purchase process?

In this case study, Windstream, a provider of high-speed Internet service, saw a 5% increase in purchases when they removed an inline order summary sidebar on their final checkout page.

Inline order summary

No order summary

This single study doesn’t tell the whole story when it comes to order summaries (we all know Amazon swears by theirs) but it’s important to consider what your site visitors might consider distracting. For Windstream, it turned out the summary was just that: a distraction.

Lesson 3: Give them the whole enchilada

There are good reasons to break the order process into bite-size pieces: it’s less overwhelming, more organized, and cleaner in the design phase. But a number of studies like this one have shown that, perhaps counter-intuitively, a single-page checkout can perform better than a multi-step purchase process.

Charmandising, a French e-commerce site that sells pop music memorabilia, discovered that a single-page checkout process increased purchases by a whopping 67%.

Single-page checkout

Multi-step checkout

Lesson 4: Surprises lurk, so keep on testing

Yes, much of the common (empirical) lore suggests that your e-commerce site will convert better if you keep a streamlined, clean checkout flow with minimal distractions and no friction. But Dell ran quite an interesting test to the contrary.

The Dell team decided to test whether sales might be helped by a small lightbox creating some friction for users who decide to leave the shopping cart screen. As it turned out, the triggered overlay increased Dell’s sales by 4.4% while decreasing the number of items being removed from the cart.

Triggered “are you sure” overlay

No overlay

One nuance to consider in this test is that most of Dell’s products are “high consideration” products. People tend to research the computer they’re going to buy with some gravity and time investment as compared to, say, a t-shirt or a toaster. So the “are you sure” triggered overlay for this type of customer may help create real second-guessing and embattle the decision a bit, whereas a buyer of products of “lower consideration” may not behave the same way.

Conclusion

In these case studies, three companies won customers by: setting and fulfilling clear expectations of how their e-commerce website will behave; favoring a clean house free of distractions over increased detail about the purchase; and doing on a single web page what many shopping cart flows insist on doing over several.

It’s important to remember that, between retail category, visitor demographics and savvy, and changing trends over time, there’s a lot of idiosyncrasy to any single case study. And of course, as Dell’s bold triggered overlay test illustrates, there are exceptions and surprises, and we have to keep on testing to uncover them.

Image of shopping carts courtesy Shutterstock.

Cart remarketing: The secret behind online conversion

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By Fiona Swerdlow, Head of Research, Shop.org | Published: April 3, 2012

 

How would you like to add real dollars to your bottom line? Increase conversion? Boost sales? Bump up that AOV? Of course you would. Now, ask any retailer what their top three barriers to conversion and sales are, and you are sure to hear “shopping cart abandonment” somewhere on that list.

What’s the connection? In two words – cart remarketing. SeeWhy did some research and found that:

• On average, 8% of customers return to a site to buy if the company does no remarketing. With a remarketing program in place, however, that average jumps to 26%.
• Yet – incredibly – just 37% of the retailers do “something” as follow up to a customer visit (though usually something like asking customers to sign up for a newsletter). Only 12% did some cart remarketing of any kind, and even fewer truly personalized that follow up.

All in all, that’s some serious money left on the table.

We gathered several experts – Charles Nicholls of SeeWhy, Charlie Cole of Lucky Brand Jeans, and Nancy Miller of Woodcraft for the latest Shop.org Webinar, “Shopping Cart Abandonment Research and Insights”, broadcast on March 28, 2012. While I couldn’t possibly capture in one blog post all the great information and lessons that the panelists shared, here are a few highlights to whet your appetite and entice you and your team to listen to the playback today.

Cart abandonment may be at an all-time high… At first glance, the industry benchmarks aren’t encouraging: the current average shopping cart abandonment rate is 72%, according to Nicholls. Brace yourself: that number is only likely to increase as consumers continue to change. Among brand new (first time) visitors, their research revealed that a mere quarter of one percent (that’s 0.25%) “…will go through and actually complete their purchase on the spot in that first visit.” Put another way, more than 99% of first time visitors will “fall off your single track.”

…but now is actually “part of the purchase journey.” Before you despair, consider this: Nicholls characterized shopping cart abandonment as both a problem and an opportunity – and, no, that’s not marketing spin. Retailers tend to think of “conversion = good; abandonment = bad”, Nicholls noted, but – as with many issues – it’s not remotely as “black and white” as all that. Why? Consumers are fundamentally changing. Likening the purchase path to a multi-stop vs. single trip rail pass, Nicholls explained that many consumers now stop and start multiple times – and in multiple venues (web, smartphone, tablet, in store) – on their path to buying a given product. In other words, that old single track purchase funnel is obsolete.

Why consumers abandon carts: price *and* unique attributes. Per a Forrester Research study, when a consumer abandons a cart, the leading reasons reflect either a price objection (e.g. shipping costs) or a timing objection (the consumer wants to do more research, they aren’t ready to buy yet, etc.). Between August 2011 and March 2012, SeeWhy analyzed over 600,000 visitors and 250,000 transactions to dig deeper into this issue. The study confirmed that cart abandonment can, in fact, “be part of the purchase cycle” – especially for carts that are quite small or once the value jumps to between $100 and $150. “$100 is a psychological mark where everything changes,” Nicholls noted, so, for example, retailers should consider setting their free shipping promotion at the $99 – vs. $100 – threshold.

Cart remarketing benefits the whole business. A well executed cart abandonment strategy provides additional benefits to the business overall, among those: helping retailers learn more about their business, products and customers along the way. For example, while price can have a significant impact on cart abandonment rates, every item has a unique abandonment rate depending on its (unique) attributes. By examining more closely products that have high abandonment rates, retailers can adjust those product detail pages to perhaps direct customers to stores to see the product in person, and/or put in place shipping options (e.g. free returns shipping) to assuage customer concerns about making the “wrong” purchase.

The first 12 hours after a first visit (and abandonment) are critical for remarketing. SeeWhy found that, among consumers who didn’t buy initially, the average elapsed time between that first visit and actual purchase is 19 hours – but that 72% of those who ultimately bought did so within the first 12 hours after that first visit. “Leads do go cold pretty quickly,” Nicholls underscored. Beware launching a quickly-hatched blanket email remarketing program. There are three secrets of success to cart remarketing: timing, tone, and personalization. The panelists also discussed the role of emotion as well as potential pitfalls in a remarketing strategy: how frequently should you follow up via email? How can you use a return site visit to remarket a cart? When – if ever – should you include an offer as part of a remarketing campaign? What’s the right way to personalize? What are the right goals for each email in a remarketing sequence?

Invest and reap the rewards. To learn more about how to best set up and execute your cart remarketing strategy, you’ll have to listen to the webinar playback. And if you’re still not convinced a cart remarketing strategy is worth your time, consider this:

• Charlie Cole of Lucky Brand Jeans emphasized that remarketing accounts for 3% of their $40MM business – that’s $1.2 million, just for executing their remarketing strategy in a smarter, more timely and personalized manner.
• Nancy Miller of Woodcraft reported that, “The abandoned cart campaign is number 1 in terms of conversion rate, ROI and per visit value. Comparing this campaign to all other direct email campaigns, the conversion rate is 618% higher, and the per visit value is 675% higher.”

With stats like that, what are you waiting for?