7 Stats Ecommerce Retailers Can't Ignore in 2017

7 Stats Ecommerce Retailers Can't Ignore in 2017

You click “Buy now.” Your fingernails drum the desk. Your eyebrows furrow at the blank screen before you. You breathe in deeply.

You glance outside the window, then back to the screen. Ugh. It’s still loading.

*Bing*

Ah, a new notification pops up on your screen.

You leave the semi-loaded cart page. You’ll buy it some other time.

A two-second delay in your page’s load time could increase abandoned cart rates 20%. And a third of your customers won’t complete a purchase because they found a better deal elsewhere.

It’s frightening to think your online store could lose so much business simply because it’s not delivering what your customers want, where, and when they want it. Luckily, recent research sheds some insight into how people buy stuff online.

Your store isn’t immortal. It’s competing constantly. And it has its weak spots which, if ignored too long, will be the cause of its demise. (Think of it like how tooth decay can cause death… sounds absurd, is incredibly unlikely, but very much a possibility.) Use this recent research to identify your store’s fundamental weak spots and opportunities for growth in 2017.

1. People Spend 51% of Their Time on Their Mobile Phones (in Contrast to 42% of Their Time on a Desktop)

Image via: Kleiner Perkins Caufield & Byers, Slideshare (Slide 14)

Next time you set foot outside, sit on a bench and people watch for a few minutes. If you’re on the bus, at the mall, or at the park, you’ll notice a pattern — everyone is on their phones. Even if people are walking around, their eyes are still glued to their screens. Heck, while you’re people watching, even you might feel the uncomfortable urge to check your phone. If you don’t have store that visitors can browse on mobile, you’re really far behind.

In 2015, Mary Meeker wrote about how people spent 51% of their time on their mobile phones in contrast to 42% of their time on a desktop when they were consuming digital media (see slide 14). This trend directly applies to ecommerce as well, as we’ve previously written about the moment we saw 50.3% of traffic coming from mobile (40.3% from mobile phones, 10% from tablets) and 49.7% from desktops.

It’s incredibly convenient for buyers to browse your store on mobile in short, quick, sessions during the spare pockets of time they have throughout the day.

Naturally, your store should be mobile optimized or responsive. However, you must also consider optimizing for quick shopping sessions. If people can’t browse in quick spurts on mobile, they won’t find products they want to buy. Your store misses out on those potential sales.

People should be able to browse in two-minute chunks. When my friend Shan (who now works at Shippo) and I worked at Pivotal, we shared four potential questions you could use to more accurately track mobile ecommerce ROI:

  • How many customers started their basket on smartphones and returned on another device to purchase?
  • What is the average time between a smartphone visit and a return visit on another device for purchasing?
  • What is the difference in basket size for customers who started pre-shopping on smartphones vs. another device?
  • How many “micro session” visits does it take before a customer returns to purchase?
Image via: Frank Body

The Frank Body website is designed well for both desktop and mobile. It’s scroll friendly for thumbs, mice, and trackpads alike, and it’s very visual. It’s not particularly text-heavy, and buyers can directly add items to cart from the home page without clicking on an item page.

As the New Year settles in, allocate more resources and energy to creating a great mobile user experience. As we’ve covered previously, this could involve tactics like:

  • Use a fixed navigation bar
  • Position your product photography front and centre
  • Minimize your use of text on product pages
  • Influence action with a sticky “Add to Cart” button
  • Use real photography for your product variants

If you’re prepared to invest in mobile, consider working with a development or design firm to build a mobile-first design. If you use Shopify, you can also use a responsive theme to ensure your website works well on mobile.

2. 59% of Customers Want Personalized Promotional Offers

Communicating with customers is a touchy subject. Just because you can talk to them at anytime, doesn’t mean you should. And if you bug them too often, they’ll just ignore you entirely. You’ll have to your work cut out trying to win their trust back.

Accenture conducted a survey and discovered that, “When it comes to personalized online experiences, the most popular [factors] were website optimized by device (desktop, tablet, mobile) (64 percent) and promotional offers for items the customer is strongly considering (59 percent).”

Basically, customers expect personalized experiences, and they want to get deals for items they intend to buy. And if you don’t offer these promotions, they’re likely to shop around on your competitors’ sites to find a better price.

According to Statista, 36% of shoppers didn’t complete their purchase because they found a better price elsewhere. Track abandoned carts to see what items people meant to buy. Then, reach back out to shoppers who’d intended to buy with a special offer, and reward the ones that do. If your store is hosted at Shopify, you can use a plugin like Smart Exit Offers by Optprice to make an offer before the customer exits the page.

Consider how Alibaba takes it biggest spenders on all-expenses-paid trips around the world. Granted, your most loyal shoppers might not spend upwards of hundreds of thousands per year with you, but the principle is there: reward them with discounts and recognize their loyalty.

Merchology uses Shopify Scripts to offer and display automatic discounts, and optimize its site for mobile. As a result, the company increased its revenue per mobile device by 340%, and saw a 40% lift in mobile conversion rates.

3. Most People Prefer In-store Shopping in Every Product Category Except Books, Consumer Electronics, and Office Supplies

A huge chunk of your potential buyers and customers likely prefer to shop in physical stores simply because they enjoy it more. You might invoke the “showrooming” argument, but have you heard about the opposite phenomenon — webrooming? Basically, more people between 18-48 year olds have researched products online and bought them in store, than the other way around.

Walker Sands discovered that asides from books, consumer electronics, and office supplies, most people preferred shopping in-store. Roughly a third of Shopify’s users also sell in the physical world, either through a permanent store, a pop-up shop, or at a group venue (like a farmer’s market or bazaar). According to PopUp Republic (as seen in Retail TouchPoints), the pop-up shop industry has grown to approximately $10 billion in sales.

If your company wants to test this in a low investment way, try selling items through pop-up shops or events. You can use services like Breather or This Open Space to find spaces.  

Image via Oak Street

If you’re interested in offline presence with wider reach, experiment with catalogs. A few years ago, 9 of 10 of the highest converting ecommerce companies had catalogs. Frank & Oak takes this tactic a step further and created their biannual Oak Street Magazine.

Once you set up your brick and mortar presence, you can experiment with combining online services with offline ones for a more effective supply chain and delivery methods.

For example, Home Depot launched a pilot test to see if customers would be interested in picking up their ecommerce orders in stores. Now, over 40% of Home Depot’s online orders are picked up in stores.

4. 79% of Consumers Would Use Drones if They Could Receive Packages in an Hour

In October 2016, Uber's self-driving truck made its first delivery — 50000 beers. If trucks can drive themselves in today’s world, it’s not too farfetched to imagine drones making deliveries not too far from now. Walker Sands discovered that 79% of consumers would choose delivery via drone if that meant they could receive packages within an hour.

Don’t let the drones distract you, though. The main key here is that the most frequent shoppers really want to receive packages in an hour. Instant gratification — whether it’s humans in cars, cheetahs on jetpacks, or drones — is what they really want. And they will go elsewhere, with a competitor if they have to, in order to get it.

Your company needs to look into its supply chain to make quick turnaround delivery possible. It also means planning and potentially creating an entirely new section of the chain for same day delivery. Many companies have started figuring this rapid delivery out to some degree — Postmates, Instacart, Shyp, etc. —  and sure, if that means drones, go for it.

Image via: Nathan Lam via Medium

Sakara Life partnered up with UberRUSH to provide organic food on-demand to top designers during Fashion Week. “Our lunch boxes sold out almost immediately. And thanks to UberRUSH, we were able to deliver them quickly and flawlessly to our customers across NYC,” says Jordan Crofton, a sales and product manager at Sakara Life.

Food is a natural fit for same day or by-the-hour deliveries, but so are audiences who don’t do a good job of planning. Campus Protein built an entire business based on the fact college kids like to get fit and healthy, but don’t tend to plan ahead for when they need to restock on protein.

5. Fraud, as a Percentage of Revenues, Has Risen from 1.32% to 1.47% in a Year

 

As your sales grow, so does the amount of fraud at your site. Fraud is slowly increasing throughout ecommerce as a whole. That’s not a good sign — ideally, it should be decreasing. Business Insider reported that fraud had cost U.S. retailers $32 billion in 2014, up from $23 billion in 2013.

There are many ways to keep your eyes peeled for fraud. Comcast cloud architect Travis Truman, who used to develop at an ecommerce platform, writes at Quora:

  • Not allowing shipments to an address other than the billing address for the credit card used or flagging such orders for manual review by a fraud prevention team
  • Holding all orders over a certain amount for manual review. This is most typical if the order is the first placed from that user.
  • Requiring entry of the CCV/CVV number printed on the card.
  • Holding orders shipped to certain higher crime postal codes for manual review.
  • Manually review orders for very high quantities of items
  • Identifying when multiple user accounts are created by the same originating IP
  • Identifying user accounts that have a high number of different credit cards associated with them

We’ve previously looked at ways to improve your store’s online security and customer data. Make your store PCI-compliant. Use a service like Sift Science or Stripe Radar as a layer of fraud prevention for your store. Make sure you also use trust messages to build credibility with skeptical customers.

Also, train your staff to stay vigilant against phishing and fraudulent attacks. When hackers got ahold of just a few eBay staff accounts, they were able to download a database with “a large number” (by their own admittance) of eBay’s 148 million accounts.

Increasing your security isn’t just a good loss prevention measure, it also enhances visitors’ and customers’ (particularly millennials) trust in your company.

6. A Two-second Delay in Load Time Increases Abandonment Rates by 20%

People are desperate for instant gratification. Hell, they’d even trust drones with delivering their products. Can you imagine what happens when your webpage takes even just a few seconds to load?

A study by Radware discovered that “a two-second delay in load time during a transaction resulted in abandonment rates of up to 87%. This is significantly higher than the baseline abandonment rate of 67%.” Across U.S. ecommerce sites, they estimated that slow pages cost over $3 billion in lost sales.  

Slow pages lose sales. This is particularly important for mobile pages as well (see point #1). We’ve previously suggested tools to diagnose whether your website is running up to par:

  • PageSpeed Insights (Google’s online tool, also built in to Chrome’s developer console)
  • YSlow (A browser plugin for Safari and Firefox)
  • WebPageTest.org (My new favourite tool, with lots of advanced options).

Speed up all your pages, but pay particular attention to your checkout process. Make sure it loads as quickly as possible. Here are some tactics we’d previously covered in detail to speed up your website:

  • Use Google Tag Manager
  • Consider measuring and improving your time to interact (TTI) speed
  • Optimize your images
  • Use fast and reliable hosting servers
  • Include breakpoints for mobile

Moreover, if host your store on Shopify, you can optimize your theme.

Image by Marketing Sherpa

When Yankee Retail made its sites, Home Decorating Company, faster and more responsive, the company was able to increase its conversion rate by over 16%.

7. Online Sales in the U.S. Are Forecasted to Reach $523 Billion by 2020, Up 56% from $335 Billion in 2015

I’ve always been a sucker for happy endings, so this particular stat isn’t that scary. Internet Retailer wrote, “Online sales in the United States are expected to reach $523 billion in the next five years, up 56% from $335 billion in 2015....”

What does this all mean for the future?

Ecommerce is thriving and still growing extremely rapidly, but it’s happening beyond the U.S.

Ecommerce in India is projected to hit $136 billion by 2020 (up from $18 billion in 2014).  That’s a fraction of the $523 billion the U.S. is forecasted to make by 2020, but a much faster growth rate in comparison as the U.S. was sitting at $298.3 billion in 2014.

Things are still growing drastically for ecommerce, but it’s important for you to set your eyes beyond North America and consider the rest of the world. Growth rates are drastically higher elsewhere, and there are plenty of opportunities to expand.

International expansion can be costly, but it’s worth it. When PUMA expanded its ecommerce operations worldwide, their global head of ecommerce Tom Davis reported, “traffic and revenue jumps 10-12% within days of each successful “unified site” market launch.”

He elaborated at the eTail East conference in Boston, “Ninety percent of the world’s internet population lives outside of North America, with 46 percent residing in Asia, and, more specifically, China. Within China alone, there are 700 million internet users — and that’s only 50 percent of the total market.”

Make 2017 the year you explore international expansion, and devise a plan to tap into the rest of the world.

Final Thoughts

Just remember, these scary stats and scenarios affect you, but they also apply to your competitors too. Much like how you have weaknesses, so do they. And with each weakness or challenge comes an opportunity to set yourself apart from the rest of the ecommerce retailers.

Competition is getting stronger. Make 2017 the year that you get ahead of the pack, develop customer relationships, create better experiences for them, and stack a whole lot of cheddar.

About the Author

Herbert Lui is the creative director of Wonder Shuttle. He was a staff writer for Lifehacker, and his writing has appeared in The Globe and Mail, the New York Observer, and Fast Company.