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Online Buyer Behavior 101 and the Many Paths to Conversion

  |  November 15, 2011   |  Comments

Why 97% of site visitors don't buy and what e-commerce marketers can do about it.

conversion-path-trainThe theory goes that if you make it easy for visitors to follow a simple path to conversion, you'll generate traffic and revenue.

And yes, this is correct.

But this "single track" view of conversion is overly simplistic.

In this column, let's explore why, and how it's important to consider all of your available conversion paths.

Why Customers Don't Buy

Only 3 percent of visitors buy within one session on an e-commerce site. And once they get as far as the shopping cart, 71 percent will abandon. To understand why, Forrester Research asked 3,000 people why they abandon.

causes-of-shopping-cart-abandonment
Source: Forrester Research, May 2010; "Understanding Shopping Cart Abandonment"
Note: Respondents were able to give multiple answers

As it has been for years, the cost of shipping is still the number one reason why people abandon their online shopping carts. What's interesting to note is that none of the top reasons have anything to do with the actual checkout process. They're all behavioral and related to lack of readiness or willingness to pay the final purchase price.

So, making the checkout process easier for the first-time buyer is only part of the answer when addressing cart abandonment. In fact, many have learned that once changes are made, abandonment rates are still high.

Multiple Paths to Conversion

multiple-paths-to-online-conversionVisitors will make multiple visits to your site before finishing a sale. And on their journey, there are many different purchase paths they may follow.

After analyzing the online buying behavior of over 600,000 consumers across numerous e-commerce sites, I learned that surprisingly 75 percent of shopping cart abandoners would actually return to the site they abandoned within a 28-day period. This defies conventional wisdom: we polled online marketers and 81 percent believed that the majority of abandoners never return.

Additionally, these returning visitors are more likely to finish their purchase, as well as make future purchases. In fact, they are 2.3 times more likely to do so than new visitors making first-time purchases.

seewhy-online-buyer-behavior-researchSo keep in mind that your visitors will not buy immediately, and will require a series of visits and abandoned carts over time while considering their final purchase.

Optimizing the Checkout Process for Repeat Purchases

While an average e-commerce site converts 3 percent of visitors to buyers in each session, this isn't true for all sites.

The top 10 converting websites are able to convert 23 percent of visitors to buyers each session. These sites convert more because of their business model, the loyalty of their customers, and a focus on driving repeat purchases.

Amazon is a case in point. At number 11 in the top converting sites rankings, Amazon converts 18 percent of all visits into a sale.

Amazon does not offer a guest checkout, but forces new visitors to register on the site. While this creates friction for new visitors, it means that Amazon is able to identify a high proportion of traffic, and, when they don't buy, engage them using email marketing.

Amazon.com has also revealed that 66 percent of its sales are repeat purchases (compared with my analysis showing an average of 7 percent for the e-commerce industry). Amazon.com does not optimize for the first-time visitor, but rather for the returning customer.

Key Tips for E-Commerce Marketers

1. Understand why your customers don't buy. Every site is different. While industry studies are insightful, it's important to collect data on your unique visitors to understand why they're abandoning. Use survey tools, such as an exit survey. Start with data from industry research to help you design the questions and be sure to set up triggering rules carefully, so that you don't pester.

2. Understand what it takes to get the sale. Recognize also that customers probably follow their own unique path to purchase - a path that looks something like this:

Browse – Abandon – Consider – Research – Consult Friends – Browse – Purchase

Digging into your analytics will give you a good idea of what this looks like for your site, as well as the length of the cycle. Calculate: the time from first visit to first purchase, the average number of visits, and cart abandons per purchase. This data will help you consider what changes need to be made on your site to accommodate the unique buying patterns of your customers.

3. Reengage visitors who don't buy on the first visit. If your visitors take multiple paths to conversion, you must think about how you can gently nudge these visitors into returning and becoming buyers. This should span the different stages of the sales funnel with different approaches for browse abandonment, cart abandonment, and new customers, all of which need nurturing.

Understanding more about your customers - why they buy, when, and how - is a journey rich with rewards. The more you can step out of your shoes and become the customer, understanding her needs and concerns, the more you will be able to convert browsers into buyers. Sometimes, surrounded by myriad of tools and analytics, we forget this most basic tenet of marketing.

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ABOUT THE AUTHOR

Charles Nicholls

Charles Nicholls is a leading industry expert on ecommerce, web analytics, social media marketing, and online buyer behavior. He specializes in shopping cart abandonment and email remarketing, and serves as chair of the Conversion Academy. He has authored several books: "Lessons Learned From The Top 10 Converting Websites" and "The Science of Shopping Cart Abandonment," set for publication on December 13, 2011. Charles is a market analyst, blogger, commentator and regular contributor to e-commerce, and analytics publications. He is also founder and chief strategy officer at website conversion company SeeWhy.

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