Online merchant revenues up 16%


E-commerce continues to see solid growth, with revenues generated by online merchants up 16% year on year in the quarter ending September 30, according to new research from MarketLive. This figure has been boosted by back to school spending and holiday sales from Labor Day in the US, reports StrategyEye. Traffic to e-commerce sites is also on the up, rising 13% year on year during the period, highlighting the on-going shift in consumer behaviour as they increasingly turn to online sites to complete purchases. Although the report does not break out actual figures, the findings bode well for players in the e-commerce industry as everyone from dedicated startups to established players as competition for consumer loyalty heats up.

Social media is playing an increasing role in online shopping, with the percentage of traffic referred from sites such as Facebook up 82% to 1.77%. The findings are supported by recent figures disclosed by mens’ shopping club BRANDiD, which claims around 80% of its customers come directly from Twitter. Although doubts remain over the power of social media to convert this traffic into actual paying customers, companies such as Pinterest are increasingly trying to join the dots between social media and online retail. A report from Branding Brand suggests that while socially driven traffic to e-commerce sites is rising, conversions are actually dropping. According to the findings, traffic from Facebook to retail sites in May was up 21% since January, but conversion rates were down a huge 45%. Meanwhile, search remains the most powerful referral tool for online merchants, driving nearly 40% of all traffic during the quarter, according to MarketLive.

Fashion-related purchases generated the largest amount of revenue per order, with the average payment for clothes, footwear and accessories hitting USD217.51 in the period. The conversion of traffic to sales is also highest in this category with a rate of 5%, compared to bricks and mortar retailers, with only 1.76%. Although the report attributes the popularity of clothes retailers among online shoppers to back-to-school sales, the findings also highlight the growth of the fashion e-commerce industry, which is currently attracting a high volume of venture capital backing, as investors and retailers chase shoppers onto new platforms such as mobile.

Engagement is an increasing issue. According to the report, the number of visits where users only looked at one page on the site increased 4.5% year on year to account for nearly 40% of traffic to e-commerce sites. The findings suggest that online merchants will need to concentrate on engaging with existing and potential customers in what is becoming an increasingly competitive market.

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