Now Reading
From brick-and-mortar to click-and-order: A retail roadmap for decoding data from online stores

From brick-and-mortar to click-and-order: A retail roadmap for decoding data from online stores

During the pandemic, many traditional furniture and mattress retailers turned to e-commerce to keep business moving. With brick-and-mortar stores shuttered, transitioning to online sales seemed effortless. As the world reopened, the challenges of selling home goods in a digital setting began to emerge. Retailers who invested in learning the nuances of e-commerce metrics gained a strategic advantage. 

Why are these metrics — and not just the sales — so important? Conversion rates, bounce rates, average order value and customer acquisition costs deliver important insights into your customers’ (and potential customers’) buying journeys. Analyzing this data helps identify behavioral trends and areas for improvement, whether it’s refining product launch strategies or enhanced storytelling. 

Ultimately, it comes down to understanding your customers’ wants and needs to maximize the return on your investment. Which is just smart business, right?

Let’s delve into each metric to uncover its significance and how it can move your e-commerce forward. With training and testing, your digital marketing initiatives will begin to drive increased profitability and long-term success in the competitive world of online retail. 

Bounce rate

Your website’s bounce rate represents the percentage of visitors who navigate away from the site after viewing only one page. A higher bounce rate reflects potential low relevance to the referring page (consumer expectations) and engagement level of your website’s landing pages.

Improving a low bounce begins with a comprehensive audit of key landing pages. 

  • Where is traffic originating from? 
  • Is the copy compelling and on-point with expectations?
  • Do the images and videos help tell your product story?
  • Can the path to purchase be simplified?

How to calculate bounce rate. Total number of single-page sessions / Total number of sessions * 100. For example, if your website has 500 single-page sessions out of 1,000 total sessions, your bounce rate would be 50%. 

Conversion rate

Conversion rate refers to the percentage of website visitors who complete a desired action, such as completing a purchase. For nontransactional retail sites, the point of conversion might be signing up for a newsletter or submitting a query for more information. 

Whether you’re selling online or tracking in-store traffic, a high conversion rate is a key success indicator and can be the result of compelling product copy, engaging images and a seamless path to purchase. Trouble is, a low conversion rate can signal a problem with any one of these or all three. Testing each component individually requires time and resources but it remains the only way to improve a low conversion rate.

How to calculate conversion rate. Total number of conversions / Total number of website visitors * 100. For example, if your website receives 1,000 visitors and 50 of them make a purchase, your conversion rate would be 5%.

Customer acquisition cost

Customer acquisition cost measures the average cost incurred to acquire a new customer. It encompasses all expenses associated with marketing and sales efforts aimed at attracting and converting leads into paying customers. Calculating CAC will provide clear insights into evaluating the effectiveness of your marketing campaigns and assess the return on investment for each customer acquisition channel.

A low CAC indicates you’re efficiently acquiring customers at minimal cost, resulting in higher profit margins. Conversely, a high CAC may indicate inefficiencies in marketing strategies or excessive spending on customer acquisition.

How to calculate CAC. CAC = Total Cost of Acquiring Customers / Number of Customers Acquired

Divide the total cost of acquiring customers (including marketing and sales expenses) by the number of customers acquired during a specific period. If you spend $10,000 on marketing and sales efforts in a month and acquire 100 new customers during that same period, the CAC would be $100 per customer.

Return on investment

Return on investment is a financial metric used to evaluate the profitability and efficiency of an investment relative to its cost. It quantifies the ratio between the net profit generated by an investment and the initial investment. Essentially, ROI answers the question: “How much return am I getting for every dollar invested?”

A positive ROI indicates that the investment has generated a profit, while a negative ROI signifies a loss. It’s a versatile metric that allows you to make data-driven decisions on future marketing campaigns. 

See Also

How to calculate ROI. ROI = (Net Profit / Cost of Investment) x 100%

Net profit is determined by subtracting the investment from the total revenue generated or the final value of the investment. The resulting percentage indicates the return achieved relative to the investment’s cost. 

Average order value (AOV)

As leads convert to sales, calculating the average order value becomes crucial in understanding purchasing trends. Each transaction serves as a key indicator of overall revenue generated, essential for evaluating marketing strategies, pricing tactics and upselling efforts.

How to calculate AOV. Divide the total revenue generated from sales by the number of orders received during a specific period. The formula for AOV is: AOV = Total Revenue / Number of Orders.

For instance, if a marketing campaign generates $10,000 in revenue from 100 orders in a month, the AOV would be calculated as follows: AOV = $10,000 / 100 = $100. This means that, on average, each order contributes $100 to the company’s revenue. Monitoring AOV over time identifies trends and tracks the effectiveness of pricing strategies, which will help you implement tactics to enhance the value of each transaction.

Transitioning from traditional brick-and-mortar retail to e-commerce presents both challenges and opportunities for furniture and mattress retailers. By embracing and understanding e-commerce metrics you’ll gain valuable insights into customer behavior and purchasing trends.

These metrics will serve as a roadmap for optimizing marketing strategies, refining pricing tactics and enhancing your customers’ experience. With continuous testing and refinement, you’ll increase profitability and foster sustainable growth.

View Comments (0)

Leave a Reply

Your email address will not be published.

Subscribe to Bedding News Now


* indicates required
What is your Profession?
Scroll To Top