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Old Vs. New: E-Commerce Return Visitors Outspent Newbies Two To One

Old Vs. New: E-Commerce Return Visitors Outspent Newbies Two To One

Marketers have long debated whether to spend resources retaining existing customers or chasing after new ones. In the e-Commerce space at least, data reveals the value of preserving existing customer relationships. 1 Monetate logo 2color

According to Monetate's EQ4 2015 report, despite making up fewer than half of all e-Commerce sessions (48%), returning visitors spent nearly $5.3 billion online —almost twice as much as new visitors spent during the same time frame ($2.7 billion).

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"Every business needs to balance acquisition and retention costs,” said Lucinda Duncalfe, CEO of Monetate. “Of all the questions, the most critical to answer is, 'Do I invest time and money acquiring new customers, or do I focus on retaining the customers I already have and personalize their experiences?'"

Returning Customers Outpace New Shoppers

New visitor conversion rates trailed returning customers' in every way imaginable. New visitors are half as likely as returning visitors to add an item to their cart across devices and referral channels. The disparities were apparent in Q4 2015, as, on average:

  • Returning visitors added an item to their cart 15% of the time (compared to 8% for new visitors);
  • Returning visitors on mobile phones added items in 10% of sessions (versus 4% for new visitors); and
  • Returning visitors from social networks added items 9% of the time (compared to 4% for new visitors).

Follow The Bouncing Cart

Overall, bounce rates were up slightly over Q4 2014: 30% in Q4 2015 versus 29% in Q4 2014. But, unlike add-to-cart rate, the difference in bounce rate between new and returning visitors varied significantly depending on a visitor's circumstances:

  • Mobile shoppers bounced 37% of the time (compared to 28% on tablets, 26% on desktops);
  • The differential in bounce rate for new/returning visitors was smaller on mobile (14%) than on desktop (43%) or tablet (19%); and
  • Overall bounce rate was up year-over-year (29.89% versus 28.90%)

Conversion Rate

As might be expected, the holiday season enjoyed solid conversion rates. During Q4, conversion rates averaged 3.5%, the highest rate in Monetate's trailing 12-month analysis and slightly higher than in Q4 2014, which had an average conversion rate of 3.4%.

Mobile device performance saw across-the-board, year-over-year gains, while email and search both saw growth as referral channels. The average new visitor conversion rate for Q4 2015 was 2.5%, with desktop visitors the only segment within the new visitor category to break the 3% conversion rate plateau.

Methodology

The EQ analyzed a random sample of more than 7 billion online shopping experiences using "same store" data across each calendar quarter. Averages throughout the EQ were calculated across the entire sample.

Download a free copy of the Monetate Ecommerce Quarterly report (EQ4 2015) here.

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