The industry has definitely changed over the years. You no longer need to allocate an abundance of resources and capital to start up a brick and mortar store. Thanks to the power of the Internet, anyone can start an eCommerce business online! In fact, eCommerce is growing 23% year-over-year!
As more consumers are increasingly relying on online shopping, eCommerce is an easy gateway to entrepreneurship. It is estimated that 95% of purchases will be made online by 2040!
This is no surprise because of the countless benefits with shopping online, such as:
- Being able to purchase from the comfort of your own home
- Products and services online may be more cost-effective
- Great shipping and return policies
- Easier to shop around and compare prices
If you currently own an eCommerce business or you’re looking to start one, there are some statistics that you should know about. Educating yourself on the eCommerce industry will allow you to find opportunities to excel in your business! This is definitely something that all businesses should jump on in order to keep up with the competition.
Who are the people that are making purchases online? What is there to know about the eCommerce demographics? Knowing more about who you are marketing and selling to support a more effective strategic plan to target your audience through the right platforms and messaging.
On average, millennials now make 54% of purchases online, versus 49% of non-millennials. Though both demographics are heavily making purchases online, there is a higher number of millennials turning to the Internet for their shopping.
There are 80 million millennials in the US and together, they spend $600 billion annually! That equals to 28% of all daily per-person consumer spending and this number is forecasted to rise to 35% by 2030.
This means that a large portion of the demographics are millennials and if your business isn’t catering to them, then there’s a huge chunk that your business could be missing out on.
Looking at the generation that comes directly after millennials is also important because they are the future of the eCommerce industry. Currently, only 9.6% of Generation Z reports purchasing items in a physical store, which is considerably less than their older generations––Millennials at 31.04%, Generation X at 27.5%, and Baby Boomers at 31.9%.
As you can see, the younger generation is turning to online shopping instead of the traditional brick and mortar store. It’s no wonder why many physical stores also sell their products and services online as an extension of their service!
Utilizing Statistics to Find Opportunities
Analyzing the shopping behavior of the targeted demographic is just as important because you need to know how they shop. 96% of Americans have made an online purchase in their life, 80% in the past month alone. This is a huge number and you need to know how to approach it.
Your eCommerce business should look into:
- Your current business situation
- If you’re utilizing mobile functionalities
- Using social media as a tool to boost your eCommerce business
- Optimizing your social media platforms
- Email marketing
- Shopping cart activities and how to prevent shopping cart abandonment
Analysis of Your Online Business
Did you know that an inconvenient returns policy deters 80% of shoppers? If your eCommerce business doesn’t have a flexible return policy, the shoppers will be hesitant when purchasing from you. They don’t want to deal with the hassle of paying extra for returns or even yet, not being able to return the product at all!
An unsatisfied customer is not what you want. No surprise here, but 55% of online shoppers tell friends and family when they are dissatisfied with a product or company. Seeing complaints from an unsatisfied customer on social media is not unusual. Words can spread fast, so it’s best that your business focuses on providing flawless user experience and customer service to ensure that there is nothing but happy, satisfied customers.
Another thing to make note of is the design of your eCommerce store. Did you put time into making it look aesthetically pleasing? Studies show that 38% of people will leave a website if they find the layout unattractive. This is a risk that you shouldn’t take with your eCommerce business.
Smartphones make everything so much easier—even with online shopping! If you’re a small retailer, having a mobile option for your eCommerce business can be a huge advantage. Small retailers may see up to 30% higher mobile conversion rates compared to large retailers.
In 2017, Mobile 500 retailers reported a 68.5% increase in visits and topping more than 3 billion logged shopping sessions.
Regardless of the size of your eCommerce business, ensuring that your website is mobile friendly is important. On Cyber Monday 2017, mobile sales hit first $2 billion on that day alone! You should get things up and running before the next Cyber Monday as sales are expected to skyrocket!
Social Media Shopping
On average, there are 1.45 billion daily active social media users! Approximately 30% of online shoppers say they would be likely to make a purchase from a social media platform like Facebook, Pinterest, Instagram, Twitter or Snapchat. In fact, 23% of online shoppers are influenced by social media recommendations!
84% of online shoppers in the United States review at least one social media site during the purchasing decision process. That means that having a strong brand presence on social media will greatly benefit your eCommerce business!
Considering how many active social media users there are and the influence these platforms have, it shouldn’t be overlooked.
Which platform should your business focus on? 85% of orders from social media sites come from Facebook, so it’s probably best to focus there first!
When optimizing your social media, keep these statistics in mind:
- Posts with photos get 53% more Likes, 104% more comments, and 84% higher click-through rates
- Posts with 80 characters or less perform better, with 66% more engagement than posts with more than 80 characters.
- The click-through rate of Twitter ads is between 1-3%.
- 75% of Instagram users have taken an action, such as visiting a website, after looking at an Instagram advertising post.
- There are over 500,000 businesses who make use of Instagram as an advertising platform.
How do you communicate with your customers? If you’re not yet utilizing email marketing, then you should do so! 72% of people prefer email as the mode of business communication and 91% of Americans want to receive promotional emails. At 4.15 on a scale of 1 to 7, customers rated discounts received through email as the biggest influence on their purchasing decisions!
If you aren’t sold yet, then check this out: Email marketing spending in the United States is expected to grow from 2.07 billion U.S. dollars in 2014 to 3.07 billion U.S. dollars in 2019. That is a significant increase!
Consider these statistics when structuring your emails:
- Percentage-off discounts (35%) and free shipping (20%) are the offers email subscribers want the most.
- 54% of emails are opened on mobile. This makes it the most popular platform, beating out desktop (16%) and webmail (30%).
Shopping Cart e-Commerce Statistics
Did you know that online shoppers abandon their shopping carts 68% of the time? At this rate, eCommerce sites could be losing $3 billion a year, if not more! You may be wondering why anyone would go through the hassle of online shopping, only to abandon the order.
Here are some statistics to help you better understand why shopping cart abandonment happens:
- Approximately 56% of shoppers leave without completing their purchase when presented with unexpected costs.
- A PayPal study also revealed that 43% of shoppers abandoned shopping carts because the shipping charges were too high.
- 23% of users will abandon their shopping cart if they have to create a new user account.
- 54% of shoppers will purchase products left in shopping carts if those products are subsequently offered at a lower price.
Preventing Shopping Cart Abandonment
More than half of online shoppers abandon their shopping carts, but you can implement a few things to reduce that number! Based on the statistics, you should:
- Present all the costs ahead of time
- Reduce shipping charges or offer free shipping
- Have a guest checkout option
- Offer additional promotion if you noticed products left in the shopping cart
- Have a great return and exchange policy
Opportunities are rapidly growing in the eCommerce sector. In 2017, eCommerce was responsible for $2.3 trillion in sales, which is expected to nearly double to $4.5 trillion by 2021.
As a quick overview of all the statistics:
- It is estimated that 95% of purchases will be made online by 2040
- Millennials and Generation Z are the main demographics for online shoppers
- Inconvenient return and exchange policies deter shoppers
- You can see higher conversion rates when your website is mobile optimized
- Social media has a huge influence on purchasing behaviors
- Online shoppers abandon their shopping carts 68% of the time, but this can be easily avoided with a few changes
Now you’re well equipped with everything you need to know to optimize and grow your eCommerce business based on the statistics. If you need help, please contact us today.