E-commerce benchmarks

1.conversion rate

• According to a study by Wolfgang, where they analyzed over 250 million website sessions from July 2017 to June 2018, the overall conversion rate is at 1.85%.
• According to Wolfgang, conversion rates in Europe was 1.51%, 1.37% in the US, and 1.78% in the UK.
• According to Monetate report, the global conversion rate for Q1 of 2018 was 2.59%.

2. Checkout abandonment

• According to Baymard Institute, the average documented online shopping cart abandonment rate sits at 69.57%.

3. Average order value (proxy for average cart size)

• According to Monetate report, the global average order value for Q1 of 2018 is at $110.32.
• The average order value (AOV) or average basket size is a KPI for an e-commerce site.
• According to Littledata, AOV for a US e-commerce website is $97.15.
• According to Littledata, the AOV for a UK e-commerce website is $118.18.

4. Purchase per year

• Generation X (people born between 1966-1981) make more online purchases than any other age group, averaging nearly 19 transactions per year.
• Baby boomers makes 15.1 online transactions per year on average.
• Millennials makes 15.6 online purchases per year on average.
• The average number of online purchases per year in North America is 19.  
• The average number of online purchases per year in Asia is 22.1.
• The average number of online purchases per year in Western Europe is 18.4.  
• The average number of online purchases per year in Latin America is 9.2. 
• The average number of online purchases per year in Africa and Middle East is 11. 
• The average number of online purchases per year in Eastern Europe and Russia is 11.9.
• The average number of online purchases per year in Australia and New Zealand is 16.1
• The global average online purchases per year based on the 7 regions above is 15.4 [(19+22.1+18.4+9.2+11+11.9+16.1)/7].

5. Customer lifetime value (LTV)

• Since the customer acquisition cost varies significantly depending on the company and products, a good reference point is to aim for a lifetime value of your customers (LTV) that is three times bigger than the cost of acquisition.
• LTV/CAC benchmark is supposed to be at a 3:1 ratio.
• In a study by RJMetrics, top-performing businesses (those that have a $45 million in revenue in first few years) have an average of $3641 LTV which is five times higher than other business.
• Across all companies, the CLV is about $1,300. For example, Amazon Prime has a CLV of $2,500, while non-Prime only has a CLV of a $1,000.

6. Customer acquisition cost (CAC)

• Cost per acquisition (CPA) is a related metric to CAC, which focuses on the total cost of acquiring a new customer via a specific channel or campaign. [s4]
• The average CPA of the e-commerce industry via the google display network is $65.80.
• The e-commerce average paid search CAC is $45.27.
• The e-commerce average display advertising CAC is $65.80.

ASSUMPTIONS:

• For the average cart size, we made use of the average order value since it was more commonly reported in industry reports than the average cart size.

• For the customer lifetime value, we also presented the customer lifetime value and customer acquisition cost ratio benchmark at 3:1 since studies show that the customer lifetime value varies significantly depending on company and products. We still provided the average CLV for top performing businesses, calculated to be $3641.

• For the customer acquisition cost, we presented it by paid search and display advertising.

• For the purchase per year, we considered the survey study presented by KPMG. We estimated the global average by getting the average of all 7 regions' purchase per year.

Useful Findings:

conversion rates:

• Although the benchmark for conversion rate pertaining to sites that sell instrumentation equipment was not publicly available, e-commerce conversion rates for electrical & commercial equipment was 2.49%.
• Although the benchmark for conversion rates relating to the e-commerce sites that sell large dollar value products like a gold bar, coin or configurable products such as computers or bicycles were not available, the median e-commerce conversion rate for jewelry & accessories was found to be 2.14%. Electronics was 1.27%, and sports & recreation 1.85%.

Checkout abandonment :

• According to data published by Baymard Institute, which averaged 41 different studies containing statistics on e-commerce shopping cart abandonment, it was found that average documented online shopping cart abandonment rate was 69.57%.
• Sports & recreation e-commerce sites have a checkout abandonment rate of 25.2%, jewelry & accessories has an abandonment rate of 27.0%, and electronics has a rate of 28.4%.

Customer lifetime value

• The median CLV for all e-commerce brands is $163.09.

Purchases per year

• In e-commerce, across all industries, customers tend to make purchases between 3 and 4 times per year.
• Industry wise, loyal customers in categories such as books, music, education, and pets come back to buy 4.5 times on average in a single year. While on the lower end of the spectrum, categories such as sports, men’s grooming and beauty, and cosmetics, the comeback frequency is much lower at 2.46 and 2.81 yearly.

Average cart size

• According to Martin Drapeau, the CTO of AmiliaApp, regarding product-based e-commerce, the average cart size is $80.

Customer acquisition cost

• Although specific CAC data was not publicly available for e-commerce, the average CAC through Paid Search was found to be at $45.27, while average CAC through display advertising was $65.80.

Your Research Team Applied the following Strategies: