e-Tail

If you’ve ever wondered what the “value” is of a consumer spending time online, we have some answers courtesy of SumAll, a data visualization company.

SumAll has tapped into Google Analytics data to study patterns across ~10,000 customers and nearly $1 billion worth of transactions. What it finds is that a minute of time spent by a consumer “e-window shopping” is worth an average of 43 cents.

SumAll also calculates that one full visit to an e-commerce site is worth ~$1.30.

The company has been tracking this sort of information for a number of years, so we have some comparative statistics we can observe. In 2012, SumAll finds that the average amount of time spent per site declined by approximately 14% — from 3 minutes, 16 seconds in 2011 to 2 minutes, 49 seconds today.

Despite that decrease in time spent per online visit, the revenue generated per visit actually grew by ~24%.

What’s the reason? “Buyers are more accustomed to buying online, so the hesitation is dropping,” Dane Atkinson, SumAll’s CEO claims.

The SumAll data also suggest that an average consumer spending 1 minute, 54 seconds on a site is the amount of time needed in order for the e-retailer to make a dollar in sales.

The SumAll report concludes that a balance needs to be struck on e-commerce sites between having enough depth to be interesting … but not so much as to be overwhelming, with too many products offered and/or undue difficulty in illuminating the payment path for buyers.

According to Atkinson, aiming for an average e-commerce visit of three to four minutes is a good goal for engaging customers without confusing them with too many options.

Finally, we see from the trend data that there has been a dramatic decrease in the amount of minutes spent on a site to result in a dollar sale: it was charted at over 5 minutes back in 2009, more than three times 2012’s findings.

I guess we’ve become more nimble than ever buying online.

One of the bigger surprises of business in the year 2009 was how big of a hit U.S. e-commerce has taken. According to digital marketing intelligence firm comScore in its just-released report 2009 U.S. Digital Year in Review, e-retail spending in America decreased about 2% during the year to come in just under $210 billion.

This represents the first decline in e-commerce spending ever recorded.

Obviously, the economic recession was the culprit. But considering that e-commerce growth has charted above 20% annually in every year leading up to 2009, seeing an actual fall-off has raised more than a few eyebrows.

Where was the e-commerce decline most pronounced? It was in travel-related services, which saw revenues drop by 5% to ~$80 million. Not that all sectors saw decline. A few continued to experience growth during the year, including the books/magazines category which charted gains of ~12%. Online computer software purchases were also up by about 7%.

What does comScore see on the horizon for U.S. e-commerce? Is continued softness predicted … or a return to robust growth?

Analyzing the last few months of e-commerce activity during 2009 provides clues to the future: Growth looks like it’s returning. In fact, the 2009 holiday season marked a return to positive growth rates when compared against the same period in 2008.

[Granted, this comparison is made against “down” months of November and December in 2008, after the recession had already kicked in. But the pace of e-commerce activity is clearly picking up again.]

But whether it will go back to a 20%+ annual growth is still an open question.