A Merchant's Guide to Meaningful Metrics
Baynote and the e-tailing group have collaboratively researched the current state of e-commerce analytics, and the findings show that more needs to be done on the part of most merchants.
For starters, more than half of respondents reported a conversion rate lower than 3 percent on their retail websites, while about 1 in 4 cited rates above 5 percent. While nearly all of the retailers polled said that their evaluation of analytics was a top priority for retaining customers, the majority admitted to falling short of achieving optimum data analysis.
The most significant hurdles cited by merchants include information silos, limited data access across organizations, and a lack of education about which metrics are the most valuable.
"Data will be the driving force behind growing businesses where gaining a clear picture of one’s customer will suggest ideal marketing and personalization strategies," says Lauren Freedman, president of the e-tailing group.
Findings from the research can be found in this infographic and in this white paper, and lead to the following conclusions about meaningful metrics for merchants:
While conversion may get the most attention from many merchants, gross profitability was seen as the top metric, especially in low-margin categories where profitability percentage points can have a major impact on overall performance.
Retailers increasingly value, and are investing in, personalization technologies, yet they seem to agree there is an industry-wide need for more sophisticated measurement tactics.
Traffic and conversion rates have exceeded expectations across mobile and tablet channels, and a better understanding of key metrics will enable retailers to drive significant growth. Retailers appear to be following a “same metrics/different device” approach, which can work in the short-term but will become problematic for long-term strategies.
Is Social Stuck?
Retailers’ metrics are still focused on the number of Facebook fans and Twitter followers -- 78 percent and 61 percent, respectively, according to the merchant survey -- and not real ROI. Retailers cited measuring interactivity and customer preferences as their top goals.
The ultimate horizon for retailers is to have a 360-degree view of the customer across all touch-points that takes into account interactions and transactions and provides understanding of the most cost-effective ways to reach customers and drive conversion for life.