Alex Levashov – eCommerce Consultant (Melbourne, Australia)

What traffic channels really drive ecommerce revenue?

What traffic channels really drive ecommerce revenue?

Email, social media, affiliate marketing, SEO, paid search – what works better to drive ecommerce revenue?

Traffic channels driving ecommerce revenue

Traffic channels driving ecommerce revenue

Thanks to recent Marketing Sherpa report that I used earlier and continue to analyse, I have found interesting data to see what channels currently really help online retailers to sell. The researchers surveyed over 4,000 merchants and classified them to 6 groups based on their annual revenue from ecommerce part of their business.

I’ve played a bit with the data provided in the report and created the charts you may see in this post. The first one (static version is above) shows relative share of channels reported by merchants of different size that brings them significant revenue. If you are interested in the methodology used, scroll down to the bottom of the post.

Below you’ll find interactive version of the same chart, on the mouse roll-over you can see exact numbers and legend.

Another interactive chart shows the same data from the different angle, it is sorted now by channel rather than merchant group. So from here it is easier to see how each channel works for different groups of e-tailers.


Several things that I found interesting in the study and looking at the charts above:

  • Social media as a channel driving revenue works much better for smaller retailers;
  • Email marketing, affiliate marketing and paid search have an opposite dynamic – more often successfully used by bigger businesses;
  • Content marketing seems to be still experimental area, not so many businesses managed to use it successfully. Among those who could, are businesses relying on direct sales, 3rd party offline sales and mail orders (not reflected on the charts used in this article)
  • Around 74% retailers with brick&mortar stores reported that organic search engine traffic brought significant sales to their B&M stores (not reflected on the charts)

Another way to look into channel’s effectiveness is presented in the table below:

Traffic channels for ecommerce ranking

Ranking of traffic channels that provide significant revenue

Email, SEO, Social Media and Paid Search are the winners (so far)

As you can see from the table above, Email and SEO were among top 3 channels for all groups of merchants; social media and paid search works well for half groups. Does it mean that this will be true forever and retailers should ignore other channels? I wouldn’t bet on it, in fast-pacing world of e-commerce things can change pretty quickly and while working channels referred above are kind of must, something that most etailers should at least seriously consider if not use, there is always a place for experiment with new and less popular ways to get traffic to your online store.

Methodology

The data for chart was taken from the existing study (see References section of this post). First chart was build using the next method:

  • I summed up all the channels reported as significant by group of merchants, resulting number was more that 1 or 100%, for example for 1st group of merchant it was 325%;
  • I divided originally reported share for each channel to that total sum I got on previous step to get relative number. For example for Paid search drove significant revenue for 18% of merchants from under $10K band was a channel that brought significant revenue. After that ‘normalization’ the number for Paid search is 0.055.
  • All the channels are displayed with that relative share values, hence having 100% all together for each group of merchants

For the ranking table relative share (as specified above) of channels reported as working was used.

References