When it comes to revenue gained, online businesses still have a great potential to realize by offering a better customer experience. That is the result of an analysis we performed on 144 eCommerce stores.
How easy is it for customers on your webshop to find what they need and buy it?
Truth is that much depends on how you can answer this question.
It not only determines how much revenue you generate today, but also how well your online business is equipped to hold it's own on an eCommerce market that is becoming increasingly competitive.
More than 10% of unexploited revenue
So, to get an idea of how webshops are currently performing in terms of personalisation, we carried out an analysis on 144 webshops of different sizes.
And the results are quite unambiguous.
On average, the businesses analysed leave 10,3% in potential revenue on the table by not fully giving their customers a personalised and smooth shopping experience.
This means that a webshop with an annual revenue of $200.000 stands to gain an additional $20.000 every year!
And that is a substantial contribution to the budget of any business - no matter whether you plan to save up for a Holiday house in Provence or buy a new forklift for the warehouse...
(Credit: Atlantic Training).
Based on data from more than 650 webshops
The analysis focuses on how well the search function and product recommendations on the webshops are optimised to guide customers through their shopping experience.
These parameters are crucial to any online business, because they define how easy it is for your customers to proceed to check-out with the products they were looking for (and optimally products they didn't know they were looking for).
The data from the webshops has then been analysed against live statistical sales- and browsing data from more than 650 webshops based in 11 different European countries in order to find the estimated increase in potential revenue.
35% of your sales can derive from personalised content
The results show that there is a particularly great potential in optimising the implementation and quality of product recommendations.
The online businesses analysed stand to gain as much as 6,96% in increased revenue solely by offering their customers more tailored product recommendations more frequently during the shopping journey.
It almost sounds unbelievable, but truth is that great personalisation is a key to great profits and lasting success on the eCommerce market.
Amazon is one of the eCommerce corporations that realised this as early as the 1990's.
Since then, they have worked to perfect this strategy and in 2006 they could report that 35% of their total revenue was generated directly through personalised content.
That is why it is important to consider how personalisation can help your business grow.
In a few years it might be too late...
However, you probably shouldn't consider this for too long, as the market is changing rapidly.
Today, 70% of consumers expect to receive a personalised shopping experience when shopping online and 94% of eCommerce businesses are aware that personalisation is critical to their current and future success
In other words - competition is getting stronger by the day, which is bad news for the webshops that don't adapt.
Because consumers are getting increasingly accustomed to a certain level of service and personalisation when shopping online (and rightly so).
And fact of the matter is that if you fail to deliver this, these consumers wont hesitate to find another eTailer that does - 56% are more inclined to buy products from a webshop that offers a good, personalised shopping experience.
...But there is still time
Don't panic just yet, though.
The good news here is that by making sure your customers get a tailored shopping experience on your webshop tomorrow rather than next month or next year, you still have a upper-hand on many of your competitors...