The Washington Post
Thu Jul 02 2015

A new report has found that customers are leaving retailers' websites more frequently without buying anything.
It's only getting harder for retailers to close the deal with online shoppers.
A new report has found that customers are leaving retailers' websites more frequently without buying anything and, when they do open their wallets, they are spending less on average per order.
The findings come as retailers have been pouring money into adapting their sites to appeal tocustomer'sfast-evolving digital preferences, and they may be a sign that, so far, retailers are struggling to get their online experiences to meet shoppers' expectations.
The online conversion rate, a measure of the share of shoppers who actually make a purchase, declined from 2.54 percent in the first quarter of 2014 to 2.32 percent in the same quarter this year, according to an analysis by Monetate, a company that provides retailers with a platform for personalized marketing.Monetatestudied a random sample of the more than 7 billion online shopping visits that took place in the first quarter on its platform.
A decline in conversion alone may not necessarily be bad for retailers. It might simply mean that many shoppers are researching an item online, only to make the purchase at the retailer's brick-and-mortar store later.
"Consumersare basically browsingand decision-making has moved online," said Scott Galloway, a professor who teaches marketing and branding at New York University's Stern School of Business.
But it's not just conversion rates that look lackluster.Monetatealso found that the average "bounce rate" has shot up over the past year from 27.6 percent to 35.4 percent. A bounce rate is a measure of the number of shoppers who come to a site and immediately leave without clicking on or browsing any items.
That suggests something more troubling for retailers, because it means their website was sounengagingthat shoppers didn't even stick around to browse, much less buy.
So what would cause a shopper to turn away that quickly? Sucharita Mulpuru, an e-commerce analyst at Forrester Research, said it may be that their websites simply don't work that well. Many retailers have not created differentiated experiences for laptops, tablets and smartphones, and so users end up finding their site is slow to load or hard to navigate.
"It's really hard to code for all the different sites that are out there, and a lot of merchants have basically opted for the lowest common denominator," Mulpuru said.
Monetatealso found that average order values for online purchases have dropped to $122.65 in the first quarter of 2015 from $125.15 in 2014. Experts say there are likely two reasons for this: One is widespread free shipping offers, which have trained shoppers tounbundletheir online orders. While a customer might once have ordered a Father's Day gift for Dad and Grandpa in the same order to save on shipping, there is little incentive to do that at a time when many retailers offer free shipping on all purchases or most purchases. As a result, there are more transactions with a smaller total ticket value.
Also, shoppers on mobile devices often place smaller orders, experts said.
"That tends to be more hunt and kill," said Lucinda Duncalfe, Monetate's chief executive.
As more buying moves to mobile devices, it makes sense then that the average order value would come down.

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