July 31, 2009, 12:00 AM

MarketLive Index shows online sales up 2% in Q2 year over year

Online sales among 160 retailers who drive $2 billion in annual sales grew 2% in the second quarter over Q2 a year ago, MarketLive said yesterday. Visits were up 7.23% while conversion rate was down 7.38%.

Online sales among 160 retailers who drive $2 billion in annual sales grew 2% in the second quarter over Q2 a year ago, Ken Burke, chairman of e-commerce platform provider MarketLive, said yesterday. MarketLive creates its quarterly index based on 160 retailer customers.

MarketLive also reports:

  • Visits to the 160 retailers were up 7.23% year over year
  • Conversion rates were down 7.4% to 3.64% from 3.93%
  • Cart abandonment was up slightly to 60.91% from 60.20%
  • Exits after viewing one page fell to 32.24% from 37.9%.
  • The percentage of shoppers who place an item in a cart-which MarketLive calls the “engagement rate”-is up 10% to 9.51% from 8.64%.
Conversion rate declines and abandonment rate increases are the result of the increase in site visits, which means more shoppers but fewer qualified buyers are coming to the site, Burke says. The increase in the engagement rate is significant, Burke says. With more consumers starting the checkout process, “The bottom has been hit,” he says.

With the increase in sales and traffic in Q2, Q4 bodes well, Burke says. But conservative inventory buying could create problems, he adds. “We’re going to see lots of demand but not enough merchandise,” Burke says. His advice: “Don’t over-promote too early. If you do, you’ll shoot yourself in the foot. Preserve as much margin as you can.”

MarketLive also reports some interesting conversion rate variations among types of retailers:

  • For catalogers, they were down to 5.05% from 5.96%, actually a positive metric for catalogers as they drive more traffic from search engines and less from expensive catalog mailings. Consumers coming from search engines are not as likely to purchase as those who receive catalogs, hence the lower conversion rate.
  • For retail chains, conversion rates fell 17% to 1.54% from 1.86%, possibly indicating more consumers are buying in stores after researching online.
  • For manufacturers, conversion rates were up a whopping 25%. “Customers have trust with a brand manufacturer that they might not have with a retailer, especially a no-name retailer,” Burke says. His advice to manufacturers: Make the web a higher priority.
Burke also highlighted the checkout abandonment rate, which hasn’t gotten a lot of attention but actually is a very telling stat: Half of customers abandon a transaction after they have started to check out. “We as an industry don’t focus enough on checkout,” Burke says. “That abandonment rate is way too high. Simplicity is critical; error messaging is critical; simplistic error messaging is critical.”

Burke also noted that sites that force shoppers to register before they can complete checkout have a conversion rate of 2.86% while those that allow customers to check out without registering enjoy a conversion rate of 3.64%.

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