E-Commerce Mainstream, Measurements Lacking

The Internet has become as legitimate as any other sales channel for most of the 300 executive respondents to the e-tailing group’s annual merchant survey, suggesting that e-commerce is as mainstream as a trip to a local mall. Nearly 9-in-10 of the respondents indicated that their e-commerce site is fully integrated into the overall business, resulting in steady online shopping improvements and strategies. Only 13 percent consider the online portion of their business to be a separate entity from the organization.

Nearly three-quarters (72 percent) of respondents implemented new technology in 2003, and many of the features that online shoppers find important, such as keyword search capability, seasonal promotions, coupons/rebates, and gift suggestions, were perceived as valuable to merchants as well. Included among the merchants’ wish lists are: personalization, search improvements, cross-selling/up-selling, dynamic technology, interactive tools, and live chat.

Site analytic tools were also included on the merchants’ wish lists, which should help with some of the problems the e-tailing group identified in the survey. Despite e-businesses’ increasing awareness of the online challenges, 19 percent of the survey participants do not know their conversion rates and 47 percent do not know their shopping cart abandonment rates. Also, 57 percent of the sites that implemented cross-selling/up-selling, didn’t know the percentage of revenue these features were generating.

Shopping Cart Abandonment Rates
Abandonment Rate % of E-Businesses
0-10% 5%
11-20% 8%
21-30% 6%
31-40% 6%
41-50% 7%
51-60% 8%
61-70% 8%
71-80% 4%
80%+ 1%
Don’t know 47%
Source: the e-tailing group

Conversion Rates
Conversion Rate % of E-Businesses
0-1% 8%
1-2% 22%
2-3% 11%
3-4% 12%
4-6% 11%
6-8% 4%
8-10% 4%
11-15% 3%
16-20% 3%
20%+ 2%
Don’t know 19%
Note: Rate was determined by number of orders divided
by number of visits group
Source: the e-tailing group

More than half of the survey participants were directors or managers, while more than one-third identified as CEO/president/principal or vice president/general manager. Nearly 4-in-10 of the companies that were represented had an annual sales volume of under $20 million; 20 percent had $20 to $100 million; 27 percent had $100 million to $1 billion; and 14 percent had over $1 billion.

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