PHILADELPHIA, June 17, 2015 /PRNewswire/ -- Monetate, the leading provider of multichannel personalization to the world's best brands, announced today the release of its latest global Ecommerce Quarterly report (EQ1 2015). The data shows that, save for a momentary spike during the 2014 holiday season, conversion and add-to-cart rates have been dropping steadily year over year. Despite these declines, the amount of traffic per session to product pages continues to rise (up from 2.09 product views per session in Q1 2014 to 2.28 product views per session in Q1 2015), placing increased scrutiny on the efficacy of marketers' current merchandising tactics.
The merchandising tactics in place (namely product recommendations) prove to be tempting shoppers enough to click and browse, but not enough to buy. How, then, can marketers best use product recommendations to combat this lack of consumer action? In a word: relevance.
The EQ1 2015 delves into the first quarter's ecommerce performance trends and offers a glimpse into how progressive retailers are using more contextually relevant product recommendations to beat the industry trends of higher bounce rates, lower average order values (AOVs) and lower conversion rates.
"Product recommendations are key to driving ecommerce performance. But to combat waning KPIs, a brand has to up its game," said Lucinda Duncalfe, CEO, Monetate. "Our latest EQ offers real-world examples from Microsoft, Brownells and Kipling to illustrate the power of making more relevant recommendations within a variety of contexts, using all the data available."
Bounce Rates Are Up
At 35.25 percent, average bounce rate is nearly 6 full percentage points higher year over year. Interestingly, this change in trend isn't tied to smartphones or tablets. It's the desktop shopper who is less willing to give retailers a second chance – bounce rates on desktops climbed from 27.6 percent in Q1 2014 to 35.39 percent in Q1 2015. Though this may signal an alarm for some, it doesn't have to.
Microsoft beat the industry average last quarter by incorporating product recommendations into a fully personalized experience for shoppers who recently purchased a flagship product. The landing page experience was completely overhauled to capture their excitement over their new purchase, and featured a product banner and specific on-page messaging along with a product recommendation grid, resulting in a huge impact – bounce rate dropped 35 percent and add-to-cart rate rose 10 percent.
Average Order Values are Down
Overall, AOV dropped from $125.15 in Q1 2014 to $122.65 in Q1 2015. Though a relatively minor decline overall (-2.5 percent year over year), the poorer performance can be blamed on smartphones. Now accounting for 20 percent of all ecommerce traffic, the slouching smartphone KPIs are being felt more and more. Despite this, many retailers are finding ways to amp up AOV.
Brownells targeted shoppers from a specific niche site with a set of three different product category recommendation grids on their homepage: one for clearance items, one for new items and one for featured products within that category. The results were as satisfying for the shoppers as they were for the retailer: a 28.3 percent lift in AOV.
Conversion Rates Continue to Decline
Overall, conversion rates dropped gradually from 2.51 percent in Q1 2014 to 2.32 percent in Q1 2015. Save for stronger performances from tablet traffic in the device category and social traffic in the source category, weaker conversion rates were an across-the-board trend over the last five quarters.
Kipling recently rolled out a product recommendation grid to its homepage. Though basic in and of itself, the company took it a step further by testing placement. One version displayed product recommendations at the top of the page while another version displayed a grid at the bottom of the page. As a result, the team increased shopper engagement and determined the best placement for optimizing conversion rate. With conversion rates of 7.29 percent and 9.33 percent respectively, both far surpassed the site's baseline conversion rate of 1.64 percent.
Download a free copy of the Monetate Ecommerce Quarterly report (EQ1 2015) here.
The EQ analyzes a random sample of more than 7 billion online shopping experiences using "same store" data across each calendar quarter. Averages throughout the EQ are calculated across the entire sample. Key performance indicators, such as average order value and conversion rate, vary by industry and market type. These averages are published only to support the analysis in each release of the EQ, and are not intended to be benchmarks for any ecommerce business.
Monetate is the global leader in multichannel personalization for the world's best brands. The Monetate platform is built for speed. It features an easy-to-use interface that allows marketers to create, test, and deploy customized real-time experiences across web, email, and mobile.
With Monetate, marketing is transformed from a world of discrete one-size-fits-all campaigns to one of always-on, personalized experiences that optimize the lifetime value of each customer.
Founded in 2008, Monetate influences billions of dollars in annual revenue for world-class brands like Macy's, QVC, Office Depot, Patagonia, Sur la Table, and The North Face. During Cyber Week 2014, Monetate influenced a third of all US e-commerce sales. Monetate is the industry leader, with more clients in the IR 500 than any other company.