January 29, 2014, 1:57 PM

E-retailers will focus on mobile and site design in 2014

More than half of web retailers say mobile is a top priority for their business, according to a Shop.org and Forrester Research survey. Most retailers also report that conversion rates have increased over the past year.

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E-retailers say transactions on smartphones and tablets generated 21% of online sales revenue in 2013, according to the results of a Shop.org and Forrester Research Inc. survey. That’s likely why 53% of the participating retailers put mobile at the top of their list of priorities for 2014. Shop.org is the e-retailing arm of the National Retail Federation trade group.

The newly released State of Retailing Online 2014 report includes the responses of 70 web retailers that filled out the survey in November and December. Nearly half, 46%, of respondents say overhauling their sites in some way is a top priority and 36% cite marketing improvements.

The report also asked retailers to divulge how they delivered on several key performance indicators. Retailers said their e-retail sales grew an average of 29% in 2013, which is substantially higher than the 13% Forrester forecast last spring for U.S. e-retail sales for 2013. Report author and Forrester analyst Sucharita Mulpuru says the small respondent set, two-thirds of which have annual e-retail sales of $25 million or more, may help account for the difference.

The retailers in the survey also provided data to produce the following key performance indicator averages:

• Site conversion rate, 2.7%, with 58% of respondents saying their conversion rate had increased year over year, 19% saying it remained the same and 22% saying it decreased

• Average order value, $158

• Average order value for repeat customers, $178

• Repeat customer rate, 40%

Returns as percentage of online sales, 12%

• Customer service cost per order, $3.60

The average fulfillment cost per order across all respondents is $7.50, but that varies by an e-retailer’s sales volume and by whether the retailer is a web-only retailer or also operates physical stores. The fulfillment cost per order for retailers generating less than $25 million in sales online is $9 versus $7 for retailers with more than $100 million in annual online sales. Web-only retailers say they pay an average of $9 versus store-based retailers’ $8. Those differences per order can be significant for chain retailers as free shipping offers become commonplace and delivery costs rise, Mulpuru says.

Learn more about e-retailers’ mobile and design priorities in the February issue of Internet Retailer magazine, available next week.

 

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