Running an e-commerce business comes with the relentless pursuit of attracting visitors to the website with the hope of increasing conversion. Businesses invest substantially in ads, SEO, and social media to channel more traffic to their online stores, however, acquired website traffic doesn't always lead to conversion increase. There could be multiple reasons why this happens, but one of the most common and often overlooked ones is when visitors land on the site only to exit immediately without taking any meaningful action. This scenario is known as a high website bounce rate. In the fast-paced world of e-commerce, where every click counts, a high website bounce rate can be a silent killer of the marketing budget.
The long-lasting implications of a high bounce rate
A high website bounce rate translates into financial losses through two distinct channels: lost revenue and wasted marketing budget.
When visitors bounce from the website, it is obvious that they are not converting into customers. They are not buying products or services, or taking any other desired action that generates revenue for the business.
In addition, all the money spent on advertising to drive more traffic to websites is being wasted since when visitors click on the ad banner and then bounce from the website, businesses are still paying for the click. They are paying for ads, SEO, social media, and other marketing channels to bring visitors to the website, but visitors are not staying long enough to see the value proposition and the offers.
SimplicityDX, conducted research to understand the financial impact of a high bounce rate, and their findings were quite interesting.
- $4.89 is the average amount of lost revenue when a new customer bounces.
- $5.24 is the average amount of lost revenue when an existing customer bounces.
- $5.11 is the average amount of lost revenue among all customers.
SimplicityDX research results
Brands are literally leaving money on the table. In fact, for every 10,000 visitors, if 80% bounce, the lost revenue cost to the brand is $40,880. - Ruth Peters, CMO SimplicityDX
It is important to note that these numbers were calculated based on the advertising cost to get each visitor to the site and the lost revenue opportunity when they bounce. However when it comes, for example, to luxury watch brands, the lost revenue opportunity can be exponentially higher.
Long-lasting effects of the bounce
However, it not only means that businesses are missing out on sales opportunities and losing potential income in the short term, but more importantly, it can be impacting their strategic objectives. For instance, when the site visitors perceive the website as not engaging enough, not interesting, slow or poorly made, it forms a certain impression about the brand in general. The business could be selling the best products on the market, but failure to engage customers damages the brand's reputation driving potential customers towards buying potentially worse products from the competitors that manage to present those products better.
SimplicityDX research results
The above-mentioned report also suggests, that 27% of the bounced customers felt that they were scammed and 41% of shoppers were so disappointed that they shared their frustration with friends or on social media — meaning a single bounce has a significant ripple effect.
Potential causes of high bounce rate
We briefly mentioned a few factors that contribute to an increased bounce rate, but let's explore this in more detail. While there are numerous reasons for a high bounce rate, the most prevalent and critical ones include: irrelevant content, sluggish website loading speed, poor UI/UX (such as intrusive pop-ups, complicated navigation or unresponsive design), and a lack of engagement.
One might question the concept of "irrelevant content." Typically, this refers to a situation where a visitor's search engine keywords lead them to a website, but the content on the site doesn't align with what they were looking for. This mismatch can result from inaccurate wording on the website, its metadata or in an advertising campaign. To address this challenge, we consistently recommend adopting a well-considered content strategy and, perhaps most importantly, engaging in ongoing experimentation to determine what yields the best results.
When consumers were asked in a recent survey how effective brands have been in using data to personalize digital advertising campaigns, only 18% said ads "often" seemed to understand their needs. - MediaPost
We won't spend more time discussing website performance here since we've already covered it in our article titled "Engagement Mastery: Convert Clicks to Revenue in Luxury Sales" and we encourage you to give it a read.
Poor user experience and interface design can also play a significant role. For instance, we've come across many well-known luxury watch brands with websites that either resemble a Windows 95 interface or are cluttered with images, floating elements, and various videos that, while visually appealing, render website navigation almost impossible. Balancing visual aesthetics and usability is a challenging task, more of an art than a predefined algorithm, but it's essential to get it right.
Another rather important factor is user engagement which is a very broad topic on its own, however, there are a few very essential elements to it as well. Those elements include engaging content, visual appeal that apart from the design includes quality images and videos, and last but not least - interactive elements.
Engagement is the key
With the rise of 5G internet and global digitalization, it becomes harder to compete in the digital space, however, digital dominance brings more perks than ever considering the changing demographics and growing shopper expectations.
As we mentioned previously, 70% of luxury purchases are influenced by online interactions, which means at least one digital interaction has taken place with the brand or the product before those purchases.
Beautiful images and catchy titles still play an important role in the overall website perception by the visitors, however, modern shoppers demand more. To address it, brands and resellers invest significant resources in expensive photoshoots, video production and more. Such media production requires considerable effort and, more important, it requires a clear understanding of the end goal.
Many business owners believe they're selling products online when, in fact, they're selling the desire and idea of owning the product, ignited by product images, video materials, or other digital artifacts, with the actual product itself becoming secondary.
Numerous studies show that the purchasing experience can be so crucial that shoppers might opt for lower-quality products from competitors who offer a better customer experience.
It is not only about what is being sold, it is also about how it is being sold.
As we discussed earlier, there are many techniques how to optimize user engagement and apart from the default once that include smooth performance, quality graphics, videos, UI and UX design, proper metadata and the content itself, there are many advanced techniques such as interactive elements, quizzes, polls, surveys and more.
One of the most modern and innovative methods to improve customer engagement in the retail and e-commerce sectors are 3D technology and augmented reality (AR), in particular, virtual try-on and try-out (or view it in my room) solutions.
As seen in the example below, these technologies allow users to inspect every detail of the product, interact with it, see how light illuminates it and even try it virtually using their camera from the convenience of their home or from wherever they may be. Studies show that combination of 3D and AR can improve shopper engagement by up to 200% while bringing many other benefits, such as improved conversion or reduced returns.
There is a common misconception that these technologies are accessible only to large brands and may cost a fortune. In reality, even small businesses can benefit from 3D and AR. However, due to the wide variety of solutions available, some preparation might be required to save both time and money. In our previous article, we explored the potential considerations for choosing 3D and AR solutions.
Summary
In conclusion, running a successful e-commerce business involves more than just attracting visitors to the website; it's about converting those visitors into customers. While businesses invest heavily in various marketing channels to drive traffic, one often overlooked factor can silently impact the bottom line: the website's bounce rate.
A high website bounce rate has long-lasting implications, resulting in financial losses through lost revenue and wasted marketing budgets. Moreover, a high bounce rate doesn't only mean short-term financial losses. It can tarnish a brand's reputation when visitors perceive the website as unengaging, slow, or poorly designed. This negative impression can drive potential customers to competitors who present their products better.
Several factors contribute to a high bounce rate, including irrelevant content, slow website loading speed, poor UI/UX, and a lack of engagement. To address these challenges, businesses should adopt a well-considered content strategy and focus on ongoing experimentation to improve results. Poor user experience, often caused by cluttered and unattractive websites, can also deter visitors.
In the digital era, engagement is the key to success. Modern shoppers demand more than beautiful images and catchy titles; they want interactive and engaging experiences. Businesses must understand that they're not just selling products online but also the desire and idea of owning those products, with the actual product becoming secondary.
Advanced techniques, such as 3D technology and augmented reality (AR), are emerging as powerful tools to enhance customer engagement. Virtual try-on and try-out solutions, in particular, allow users to explore products in detail, interact with them, and even try them virtually. Studies show that these technologies can boost shopper engagement by up to 200%, improving conversion rates and reducing returns.
In the competitive world of e-commerce, where digital interactions heavily influence purchase decisions, businesses must prioritize engagement to succeed. It's not just about what is sold; it's also about how it is sold and creating memorable experiences for the customers.
As we move forward, businesses that thrive will be those that not only embrace the engagement strategies of today but also anticipate the trends of tomorrow. Forward-looking companies will invest in emerging technologies, data-driven insights, and innovative experiences to stay at the forefront of customer engagement.
Wearitar offers both 3D and AR solutions for luxury brands and resellers providing drop-in integration and superb rendering quality. Visit our website or contact us to schedule a free demo.
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