Few Convert at Retail E-Commerce Sites

APRIL 9, 2007

Many shop. Few buy.

Online merchants convert an average of 2%-3% of their site visitors into buyers, according to the e-tailing group‘s “Sixth Annual Merchant Survey.”

That’s about the same as last year. And the year before that.

The group says that driving the right customers to sites and increasing sales and retention all require more targeted tactics every year. It points to analytics and data mining as the way to make this happen.

Shop.org conducts a similar annual survey with Forrester Research called “The State of Retailing Online.” Conversion rates in that study also average about 2%-3%.

These are averages. What about those who do better?

A Nielsen//NetRatings report called “MegaView Online Retail” cited in Internet Retailer listed the top 10 US retail e-commerce sites in terms of conversion. Every site had a greater than 15% conversion rate, and nearly 25% of visitors to top site Proflowers.com bought something.

eMarketer Senior Analyst Jeffrey Grau says that retailers with industry-leading conversion rates are doing more than just looking at numbers.

“Online retailers who go beyond using traditional Web analytics data to truly understand their customers’ intentions, perceptions and concerns will be rewarded with higher conversion rates,” he says.

eMarketer: $146 Billion in Online Travel Sales by 2010

U.S. online consumer travel sales (airline, hotel, rental car, cruise and vacation package reservations) will reach nearly $94 billion, up 19 percent from just under $79 billion in 2006, according to eMarketer.

Online travel sales are projected to remain strong for the next three years, albeit with steadily declining growth rates: eMarketer projects U.S. sales to reach nearly $146 billion in 2010, up from nearly $127 billion in 2009 and $110 billion in 2008.

A tighter market will exacerbate the fierce competition between online travel agencies and travel suppliers, according Jeffrey Grau, eMarketer senior analyst and author of the report “US Online Travel: The Threat of Commoditization.”

This year, U.S. online travel bookings will for the first time surpass offline bookings in volume, according to PhoCusWright. In 2007, some 41.3 million U.S. households – some 52.5% of all US online households – will book travel online, according to eMarketer.

It projects that in 2010 nearly 10 million more U.S. households – 51.1 million, or 55.3 percent of all online households – will do so.