Online Retailers Need Better Conversion Measurement, Says Study

The survey of over 200 senior executives found that online merchant businesses are often struggling with outdated legacy technology that was designed by companies which went under in the technology downturn. As resources are constrained, it is difficult for companies to invest in the upgrades that are required to offer more substantial statistical measurement of sales, which in turn is needed to drive the sector forward.

Sales conversion rates peak between 3% and 10%, with 37% of respondents reporting rates at these levels. The conversion rates show how many visitors to a site go on to make an actual purchase; they are calculated as the number of orders divided by the number of visits.

The survey also asked businesses how they spend their online marketing budgets; email was found to be used by 96% of respondents and takes an average 26% share of online marketing budgets. Search engine optimisation was also heavily used, by 88%, and accounts for around 23% of budgets.

“The next challenge is to leverage the unique aspects of the internet that enable truly targeted marketing from personalised email to the use of search engines to selective online advertising. As our research identified, most e-tailers, despite their concerns for differentiation, are not yet using the web to its potential for either branding or personalisation. They are focused on quick ROI opportunities,” says the report.