Challenge of benchmarking in e-commerce
One of the reasons I love marketing, and digital commerce is the ability to track and analyze performance. You can create a campaign and have near-instant feedback from users. You can see how changes impact behavior and customer journeys and test and improve on everything from ad copy to images to landing pages.
However, one key challenge I have always had is benchmarking. I am happy with the CTR of the campaign I created on Instagram last week, but how does it compare with other similar campaigns? Is my store’s conversion rate terrible or considered good in my target market? These questions have bothered me throughout my career, and I have never found clear answers. You have platform averages and can find data on how specific channels work, but this kind of data is often particular to the industry or the market you are in. E-commerce in Asia is wildly different from Europe or North America, and the way landing websites look and people consume media differ, so finding a clear answer can be challenging.
In this blog, I’ll look at tools you can use for benchmarking or customer journey analysis and highlight some industry standards and considerations.
Benchmarking traffic and marketing channels
Back in 2010, I remember we were obsessed with our Alexa rank. The Amazon-owned ranking system was discontinued this year, but several better alternatives can help you compare your performance to that of your competitors and peers. The main issue with tools like Similarweb and SEMrush is that they require a certain level of data. The data is unlikely to offer valuable insights if you operate a very niche website serving 10,000 users monthly.
SimilarWeb - Useful but limited free use
SimilarWeb offers you useful metrics ranging from traffic numbers to website performance KPIs. The free version gives you basic insights into monthly traffic numbers, main keywords, website traffic channels, and some user data like bounce rate and time on site. The information available for free options is very limited, however. The paid plans start at $US 199 for marketing intelligence which is quite reasonable. Before they only had enterprise plans that started at around $1000/mth with a fixed-term contract, so I am happy to see they have since made their pricing a bit more accessible.
SEMrush - Versatile data with a focus on SEM / SEO
SEMrush is a tool that all marketers have used at some point. It offers search and website data that you can use to benchmark your traffic and work out issues or opportunities with your traffic channels. Their plans start from $US 119 per month, which is quite an affordable tool even for small website owners. In a 2020 study, SEMrush was found to be more accurate for medium and large-size websites when compared with SimilarWeb. In the study, SimilarWeb was concluded to underestimate traffic figures often. However, the conclusion was that the accuracy of the services is…similar (no pun intended).
SEMrush gives you valuable visitor data for websites but the numbers may not be 100% accurate
See how your customers interact with your website in real-time
In 2013 or 2014, a colleague of mine introduced me to data unlike I had ever seen before. He had installed Yandex Metrika analytics on our store page; with it, we could play back user sessions as videos. It was incredible to look at how customers used the website instead of just looking at heat maps or analytics data. You could see customers move their cursor up and down, read text, and click buttons. The data was anonymous, of course, but it gave us insights that Google Analytics could not provide.
We used the data to look at two types of products: Ones with high bounce rates and ones with low conversion rates. I watched dozens of clips of people interacting with the website in both instances. In the case of conversion rates, we identified a correlation between product reviews: If the first review they read was negative, they had a high chance of abandonment, even if the product’s overall rating was decent. With bounce rates, we noticed that the high-bounce items had something in common: A poor selection of similar item recommendations on the product page.
In both cases, we implemented changes that saw our conversion rate improve and our overall bounce rate drop.
The reason I am giving this personal account is that nowadays, there is a more accessible tool available for a similar purpose called Hotjar. Hotjar allows heat mapping, user journey playback, and helpful user insights in a simple dashboard. I recommend setting up Hotjar and spending a morning or an afternoon seeing how customers interact with your website. You may be in for a surprise. Oh, and it is also very affordable, with a free version available.
So what about those benchmark figures for e-commerce?
There are a lot of resources online for benchmarks. One good source I found is Storegrowers.com’s blog about benchmarks, where they have compiled results from various studies. The blog was last updated in 2022 and has data from the previous two years. Of course, two years is a long time in e-commerce, as we have seen with the recent pandemic, but I found this to be a well-put-together list of various KPIs for comparison.
Things that are good to keep in mind when comparing your numbers with any benchmarks:
You likely know your customers best
The benchmarks may be from a different industry or a different market
A lot of factors play a role in all KPIs. There is hardly sense comparing the conversion rate of a mobile phone case store, where the average order value is $30, and a mobile retailer selling the devices with an AOV of $500, even if these both serve similar customers and customer interests
I also highly recommend networking with people working in similar businesses. There are a lot of slack groups, discords, and even Facebook groups for e-commerce and marketing professionals where everyone is struggling with the same kind of problems. I would recommend the slack chat of the podcast “Today In Digital Marketing” hosted by EngageQ Digital agency.
Further reading:
Storegrowers E-commerce benchmarks (2020)