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compete-online-purchasing-incentives-sept11.gifFree shipping is the feature most likely to encourage shoppers to purchase more goods online by a wide margin, according to a September 2011 white paper from Compete. Data from “The State of Online Retail” indicates that in Q2 2011, 77% of consumers said free shipping would encourage them to purchase more products online.

In comparison, 56% cited free returns, the second-most-popular feature. This means free shipping is 39% more popular than any other online shopping feature. No other feature garnered a 50% response rate, with 43% of consumers saying an in-store return option would encourage them to purchase more products online.

Many Online Verticals See Falling Conversion Rates

compete-conversion-sep-2011.JPGConversion rates in many online retail verticals declined between Q1 2010 and Q1 2011. The most notable exception was office supplies, which saw its conversion rate grow a strong 30%, from 5.4% to 7%. In addition, home improvement conversion grew 10%, from 1% to 1.1%, and apparel conversion grew 4%, from 5.2% to 5.4%. Department store conversion stayed flat at 3.3%.

Conversely, electronics conversion fell 25%, from 1.6% to 1.2%, health & beauty conversion declined 20%, from 6.4% to 5.3%, while mass merchant conversion fell 15%, from 4% to 3.4%, and pet conversion dropped 13%, from 5.4% to 4.7%. A smaller 5.5% decline in conversion rate between Q1 2010 and Q1 2011 was recorded in the sporting goods vertical.

Some Online Specialty Retailers Lose Visitors

compete-online-visits-segment-sep-2011.JPGOnline specialty retailers in the electronics, sporting goods and office supplies verticals all lost relatively small numbers of visitors between Q1 2010 and Q1 2011. Meanwhile, specialty apparel retailers increased their online visitor total 25%, from 371 million to 463 million, and specialty pet retailers increased their online visitor total 22%, from 23 million to 28 million. Specialty home improvement and HBC retailers also increased their online visitors.

Outside the specialty niche, department stores grew their online visitors by 35%, from 278 million to 375 million. Mass merchants only increased their online visitor total by 15%, but easily led in number of visitors with 1.66 billion.

Census Bureau: Q2 E-commerce Sales Reach $47.5B

Adjusted Q2 2011 US e-commerce sales increased 3% from Q1 2011, according to estimates from the US Census Bureau. Adjusted for seasonal variation but not for price changes, US retail e-commerce sales in Q2 2011 totaled $47.5 billion, up from a revised $46.1 billion the previous quarter.

In addition, this figure represented an increase of 17.6% from about $40.4 billion in Q1 2010. E-commerce sales in Q2 2011 accounted for 4.6% of total adjusted quarterly retail spending of about $1.04 trillion.

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