Online sales are expected to hit $6.51 trillion this year. It is estimated that by 2040 that 95% of all commerce will occur online. Ensuring you know how to get your piece of the pie is getting even more competitive as the barriers to entry continue to lessen with tools like Woo Commerce and Etsy.

How do you know if your eCommerce business is hitting home runs or producing marginal returns? If you are not networking with like-minded business executives, you are left to wonder and search for benchmarks. And then, do you know which data is important to benchmark?

We’ve made it easy with this guide defining the metrics you should care about and what the standards of these metrics look like in 2023. Use this guide to document your baseline with goals to meet the benchmark or surpass it. This will help you identify your lowest-hanging fruit for growth and build a roadmap to get there.

eCommerce Conversion Rate

Your conversion rate is calculated by dividing your number of transactions by your number of visitors and multiply X 100; (transactions / visitors) X 100 respectively. The industry average for eCommerce conversion rates settles at 2.5-3%. Your goal is to always aim for above 3% – then you know you are doing something right and above average at closing transactions by chance.

Average conversion rate by source

 

Source: Compass E-commerce Conversion Rate Benchmarks (2018)
Note: data collected from over 10,000 online stores – top 25% = 25% of stores with the highest conversion rate.

Order source attribution

You get orders from many different places. Whether it be a friend that sent you online or an ad you saw, a blog you read, and affiliate feed or paid search – there are many ways to get customers. Business owners often wonder what a normal distribution of sources looks like. This is complicated to say the least as each business appeals to consumers differently and no two businesses are identical.

Lifestyle brands will have more affiliate, blog, and advertising break out. Whereas consumables will have more search marketing, marketplaces, and shopping site referrals. The rule of thumb here is that you do not want your orders all coming from one referral source – this is what they would call having all your eggs in one basket. You should have a minimum of 5 healthy sources and always be on the lookout for more.

Below you can see a study that shows global eCommerce averages to give you a benchmark. Note you can look at sources by traffic, by orders, and by revenue. Below you will find sources by traffic and revenue.

eCommerce Statistics: Conversion

Cart abandonment rate

The average cart abandonment rate is 69.80%. This means approximately 70% of shoppers add something to their cart that they do not buy. Talk about emotional buying.  There are many tips and tricks to reduce cart abandonment.

Business owners can use cart abandonment emails to remind the customer of the item in the basket. Some merchants offer a discount – but you have to be careful about shoppers seeking this and using it as a reliable way to get a discount.  You can also text message users to remind them to complete their purchase and get a special gift with the purchase. Or offer a discount on a 2nd item.

Customer retention

This is a very important metric in any business. How many customers buy a 2nd and 3rd time. Getting multiple purchases from the same customer decreases your acquisition cost and increases your lifetime value, providing a more profitable business model.

Customer Retention by Industry

 

Source: https://www.metrilo.com/blog/report-customer-retention-dtc-brands

Advertising Options

There are so many places to spend your money – but where is the best place? Let’s review some averages to see where other folks are advertising. The average online merchant advertises in 3.2 channels.

Top 10 eCommerce Advertising Sources Globally

  1. Google Shopping
  2. Custom Channels
  3. Facebook Product Ads
  4. Amazon
  5. Google Search
  6. Pinterest
  7. Criteo
  8. Bing Ads
  9. eBay
  10. Price Runner

Average Google Ads CTR

Google Ads tend to be a go-to for all brands. They have been around and show in-market / customers searching for products to buy. This means you don’t have to persuade them, so its less media spend to acquire these customers and a great place to find new customers – or have new customers find you. Let’s look at average Google Ad click through rate by percentile in the bell curve.

The bottom 25% of merchants see a 1.91% CTR.

The middle 50% percentile merchants see a 3.23% CTR.

The 3rd quartile at 75% of merchants enjoy a 5.58% CTR.

The top merchants in the 90th percentile enjoy a 9.5% CTR.

Remember that a click is only half the battle – now you have to sell them. This is where you will want your abandoned cart emails, SMS messages, and Google retargeting to get them back to your site.

Average Email Marketing Open Rate and Click Rate

Merchants need to be using email marketing – this is the most affordable source of sales. Once you have someone on your list, it’s practically free to market to them. Simply create a weekly sale and get it front of your subscribers and voila – you’ll see repeat revenue start rolling in. The average email open rate is 15.68%.  The average click rate is 2.01%. with the average unsubscribe rate being .27%.

Average Email list value

As referenced above, there is extreme value in your email marketing list – these are customers who already know you and have requested emails from you. Each recipient can be considered a monetary value based on known average responses. This is measured by average revenue per recipient. Companies that have larger revenue make more money through their email marketing by nature of being more mature and having more subscribers.

Merchants that earn less than $100K can expect an average return of $.06 per subscriber.

Merchants that earn between $100K – $1M can expect an average return of $.06 per subscriber.

Merchants that earn between $1M – $10M can expect an average return of $.11 per subscriber.

Merchants that earn above $10M can expect an average return of $.21 per subscriber.

Now that you are armed with benchmarks and averages across the globe, you are ready to compare your own results and set goals. Each of these benchmarks come with tips and tricks to leverage opportunity for improvement. Read our guide on Omnichannel Marketing.>>

Wishing all merchants a very healthy 2023. Reach out to Contest Factory if you need any customer engagement solutions.

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