Offline, shop owners can observe different kinds of customer clues to try to separate the browsers from the buyers. But online, for small to medium sized businesses, those clues can be harder to come by.
To understand their customers, e-commerce sites track a range of metrics and analytics, from traffic sources to average order values to conversion rates for new and returning customers. But Sumall, a New York-based data analytics startup targeting the mom and pop shops of the Web, thinks they should pay more attention to another indicator, too: the monetary value of a minute spent browsing.
Dane Atkinson, Sumall’s CEO, said that many online businesses tend to think of traffic in monolithic terms – more traffic equals more money. But by looking at their site’s revenue per minute and revenue per site visit, online businesses can better figure out which customers to focus on more closely.
“There’s a sweet spot where you’re getting someone to do a transaction,” he said. “It does vary depending on the type of merchant but if you can find out where that sweet spot is for your own business, it’s very useful to start to craft your user experience around it.”
Using the company’s data, which includes more than 10,000 e-commerce stores and $1 billion transactions, Sumall said that, for most businesses, that sweet spot is around 3 minutes and 20 seconds, adding that if a customer is on the site for 14 minutes, they’re more likely to browse that visit than buy.
Across all of Sumall’s e-commerce businesses, the median value of a minute spent browsing is 43 cents and the median value of a site visit is $1.30. The company also tracked the change in value over time, finding that between 2008 and 2012, the median time spent on e-commerce sites has fallen from 3 minutes and 16 seconds to 2 minutes and 49 seconds. But revenue per visit has increased 24 percent since last year.
The value per minute certainly depends on the kind of items the customer is buying and it’s obviously possible that a customer might spend a long time just browsing a site and then return later to buy. Consumers might also browse on their smartphones and buy later on a bigger screen. But Sumall, which is releasing a new tool for customer that lets them combine Google Analytics data with their revenue, said that if merchants are aware of the value per minute they can tailor their user experience to get the most out of each visit.