Data-driven marketing strategies from the fastest-growing online retailers

This post was written by Magento Analytics (formerly RJMetrics), an American software company offering big data analytics to small and midsize businesses. They discuss the findings of their most popular research report, The Ecommerce Growth Benchmark.

 

Since our acquisition by Magento Commerce earlier this year, Magento Analytics (formerly RJMetrics) has been more focused than ever on our mission to inspire and empower data-driven merchants.

One of the most exciting benefits of the acquisition has been our unprecedented access to Magento Premier Partners like dotmailer. By combining our rich data analytics with their best practices in e-mail marketing, we can create a wealth of new offerings and insights for the merchants we serve.

Our most popular research report, The Ecommerce Growth Benchmark, demonstrates these benefits through the lens of e-mail marketing automation. Below, I recap the top three findings from our report and share their implications for your marketing strategy.

The best companies are winners on every dimension

Our benchmark report divided retailers into four quartiles based on their overall revenue growth rates in their first three years of operation. As it turns out, the top quartile merchants weren’t just the best performers on one key metric – they won on all of them!

Whether it was revenue, number of orders, repeat purchase rates, average order value, or customer lifetime value, the top quartile of companies outperformed their slower-growing counterparts across the board.

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This has big implications when it comes to marketing strategy. As it turns out, there is no silver bullet or focus area that can make you a best-of-breed performer. The top merchants do it all, developing finely-tuned marketing strategies around customer acquisition, customer retention, and cart size.

Marketing automation systems like dotmailer are the key to managing these kinds of complex, multi-faceted strategies. The simultaneous use of platforms like Magento Analytics allow you to make sure your overall business is performing in a way that justifies your investments.

Fast loyalty drives fast growth

While the average retailer ends up driving about 50% of their monthly sales from repeat purchasers in the long run, our study found that the top-performing retailers are driving repeat sales faster and earlier in their lives than their industry peers.

Specifically, we found that top-performing merchants derive 22% of their revenue in their first month of operations from repeat purchasers. Think about that for a moment: since it’s the merchant’s first month of operation, there is no history of repeat purchasers to make these purchases; that 22% could only have come from buyers who came back to buy again in their first month as a customer!

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The lesson here is clear: marketing to your existing customers can never be an afterthought. These merchants were ready to drive repeat purchases from day one, and you should be too.

There has never been a better time to grow fast

A simple cohort analysis revealed that newer ecommerce companies are growing faster than their older counterparts in their first few years of business. This trend makes sense when you consider how rapidly the barriers to entry and scale are dropping for online retailers.

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This means that the opportunity for emerging merchants is large, but the competition is also tougher than ever. Faster growth means a more efficient market and more competitors; differentiation is the key to survival. Using the right tools for the job can transform your business into a distinctive, data-driven powerhouse of growth.

We look forward to collaborating with our friends at dotmailer to bring you more data-driven insights and advice in the months to come. Until then, we hope you’ll take Magento Analytics for a free test drive and stay tuned for more exciting news about our progress as part of the Magento team.

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