A sustainable growth in the revenue of online eCommerce website can only be obtained by achieving the best conversion ratio, high level of web process functions, brand reputation and the netting of missed opportunities on a consistent basis.
The share of online revenue is swelling in all businesses all over the world. Multiple factors contribute to this increase in online revenue, for instance direct online sales, brand presentation, effective customer outreach, and many other value added features of services/products. Only in the USA, according to the eMarketer research, the number of online shoppers has crossed the 200 million mark in 2015. This huge increase in the online shoppers accounts for as much as about 90% of the all internet users in US.
But, this increase in online shopping has also prompted many factors related to web performance that impact directly on the number of online purchases, and subsequently on the business revenue. According to Microsoft Bing, the web pages that were 2.2 seconds slower sustained more than 4.3% of revenue loss. About a couple of years back, Google, Inc found that the number of its daily searches decline by 8 million, if the search results slow down by just 4/10th of a single second. Likewise, 1 out of 4 online shoppers abandon the website, if it takes more than 4 seconds to load.
Moreover, it has been found in many researches that the increase in the Amazon website load time by just 1 second results in as much as $1.6 revenue loss. In general, the better implementation of web performance optimization (WPO) of an eCommerce website increases the revenue by more than 13%. In this article, we are going to discuss the factors related web performance that leaves direct impact on the business revenue.
1. Low Conversion Ratio
This first impact of a low performance website is the decreased conversion ratio that leads to substantially decreased business revenue. In a research, it was found that more 2% of conversion ratio of Wal-Mart website increased with just 1 second faster loading of the website. According to GlobalDots research study, the average load time for the converted population is estimated at about 3.22 seconds. The performance of the website that falls out of this limit is likely to get either low or no conversion. The Web Performance Today research suggests that an increase of just 100 microseconds in web page loading incremented the revenue by about 1%. So, a better web performance is fundamental factor in increasing the conversion rate and subsequently the business revenue of an online eCommerce website.
2. Cart Abandonment
The cart abandonment is directly or indirectly related to the performance and design of the website. A bad web performance will lead to reduced conversion and consequently the loss of business revenue. Based on the 31 major eCommerce companies’ surveys conducted during the past 5 to 6 years, the average cart abandon rate is as much as 68.53%, says BayMard. The three technical reasons for cart abandonment, according to the Shopify research – include complicated website navigation (25%), process taking too long (21%), and website time-out (15%). These factors are directly concerned with the web performance and efficient design. So, a better performance and professional design will increase the business revenue tremendously for all types of eCommerce/online businesses.
3. Existing Customer Retention
The customer satisfaction is the key factor to retain your existing customers and convert the visitors into customers on your website. Many researches suggests that any website with more than 3 seconds of loading time, loses more than 40% of its traffic on the website. And a huge chunk of over 80% of that traffic never return on your website, and they opt for your competitors. The increase in web page load by just 1 second causes 16% decrease in customer satisfaction, says the Gomez case study report by Aberdeen Group. This is very clear indication that you cannot retain your existing customer base with a poor performing website.
The loss of your existing customer base is a huge loss to your reputation, and subsequently the business revenue in the long run. The Yottaa research reveals that 79% unsatisfied shoppers due web performance are not likely to purchase from that site again. So, the impact of web performance is directly proportional to customer satisfaction, which lead to increase or decrease in the business revenue.
4. Reputation/Brand Damage
The cost of brand reputation damage sustained by Volkswagen in recent months is estimated at tens of billions including the shrinking of $18 billion capitalization in just one single day. The cause of brand damage can be numerous on commercial as well as technical grounds. The major reason for brand reputation damage on technical grounds for an online eCommerce website is the bad performance of your eCommerce website. If your website underperforms, then the reputation of your online website will definitely be damaged. In normal circumstances, if a customer gets a bad experience on your website, would tell more than 4 other people through different means. This will lead to a very bad reputation and negative marketing chain on the internet, and consequently your online business revenue declines very badly. So, you should always make sure your website performs very well within the desired criteria.
5. Missed Opportunities
In today’s fiercely competitive market environment where every single shopper is valuable, the missed opportunity inflicts heavily on your online business. There are many factors that fall within the region of missed opportunities, such as website outage, dissatisfaction of customers due to website performance and reduced traffic are few of them. According to Aberdeen Group, just one 1 second delay in page loading results in 11% lower page views. The reduced traffic also impact on your search engine ranking and subsequently the impact of bad web performance compounds exponentially in terms of the loss of business revenue.
So, it is very obvious from this analysis that the web performance is directly related to the business revenue in this cut-throat competitive online marketplace.
How to Improve Web Performance?
There are many important factors that can help you improve your web performance, and subsequently the business revenue.
- Efficient use of enterprise level web monitoring service like SiteObservers to improve web page performance and user experience.
- Implementing simple web design
- Content optimization (image, video and audio)
- Use of content data network CDN
- Regular cleanup of the codes
To get a deeper perspective on the current performance of your web platform try SiteObservers monitoring services for Free. For more information, click here.