Factors that drive ecommerce perfromance

5 key factors that drive ecommerce performance – and how to implement

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UK online spending now amounts to well over £1 billion of spending every week and is set to continue growing. In order to capitalize on this growth, e-commerce businesses and online service providers should strive to develop customer insight to better understand expectations and meet their ever increasing demands and shopping preferences.

Three factors driving the growth of online shopping

As confirmed in The E-commerce Foundation’s recent report, choice, price and convenience are the main factors driving e-commerce growth in the UK. 93% of respondents are still visiting shops in person highlighting the importance that a high-street presence has in the overall retail mix.

E-commerce performance optimisation

According to Visualsoft’s page speed report, half of online consumers now expect a site to load in less than 2 seconds and for every additional second that it takes for a page to load on mobile, research suggests that conversion rates can decrease by up to 20%. Some common fixes to this issue are:

  1. Image compression – Compressing images across a website can be done on an automated basis in bulk which can dramatically improve website load times. W3C total Cache is an example of a plugin that can do this.
  2. Content delivery network – Serving bandwidth intensive elements of a website via a content delivery network can also dramatically improve the speed of a website’s load time. Content delivery networks store multiple copies of the website around the world and serve the content to the website visitor from a server that is geographically nearest to them which speeds up the content load time. Amazon’s Cloudfront is an example of a content delivery network that’s well worth considering.
  3. Lazy loading – Lazy loading is a technique that speeds up a web page’s load time by only loading the top of the page as a priority. The rest of a page’s content is loaded as the visitor browses down the page. The visitor experiences a faster loading web page and doesn’t notice the other page elements loading in the background as they are not visible to them. As with image compression, there are plugins that can be used to do this on an automated basis.
  4. Technical audit – We can help identify issues and the elements that are slowing down a site with a complementary technical site audit which gives a comprehensive set of areas for a website’s load time to be improved. We also work through those issues to improve the load time.

The Amazon Opportunity?

According to PWC’s consumer behaviors report, A staggering 9 out of 10 online shoppers use Amazon in the UK and Amazon is quickly becoming the ‘product search engine’ of choice. Instagram is expanding its e-commerce offering against Amazon (see out earlier blog post on agile commerce) so it is likely that Instagram will also become a competing “product search engine” in the future.

Quite simply, Amazon has the footfall. It delivers a great customer experience and it’s trusted. The down-side of Amazon is the cannibalization of sales to the competition. To retain sales, brands are having to increase their advertising budgets on Amazon which eats into margins and Amazon fees are also fairly high, driving down margins further. Amazon have also taken to launching their own brand of products to directly compete with those sellers they serve.

Product discovery

According to a recent UK government report, paid search advertising now accounts for 50% of all online media spend. Whilst this is testament to the effectiveness of the medium, it also brings along challenges to new advertisers who are entering a highly competitive PPC marketplace.

As more advertisers bid on competitive keywords against eachother, the cost per click will inevitably increase. Established brands with highly evolved search campaigns are able to outmaneuver new brands launching PPC campaigns as they have a wealth of data on PPC performance that new entrants simply don’t have. We often reverse engineer the PPC strategies of competing brands for clients in order to build competitive PPC campaigns from day 1.

According to Advantec’s social media purchasing report, Facebook is the most used app in the UK and almost a quarter of users would buy products directly on Facebook. 48% of individuals stated that they had bought a product online after seeing a recommendation on Facebook. The business case to build brand and product visibility on Facebook is clear but at this stage, sales are likely to be less trackable as the platform doesn’t currently offer direct sales.

Key elements to get right for Returns

Royal Mail’s Return Factors report makes three recommendations for e-commerce businesses to run a successful returns operation:

  • Information clarity – produce clear guidance to shoppers up-front on the returns policy and process to enable them to quickly make a return should they need to.
  • Speed of refund – the speed of refund can impact consumer confidence and trust in making future purchases so having a swift process in place to refund is key.
  • Including a return label in the original delivery – making it easy for consumers to make returns helps improve their overall experience with the company.