How Bad Performance Impacts Ecommerce Sales (Part I)

Posted by Jon Jackson on Sep 17, 2014

As we approach the critical holiday period - where as much as 18% of shopping carts are abandoned due to slow ecommerce websites - it's time to discuss how bad performance can impact e-commerce sales and provide you with real-world examples and practical steps on how to improve performance.

Why is website performance important?

A decade ago, the number of businesses selling online was relatively low. Nowadays, those that don’t sell online are a dwindling minority. Due to the ubiquitous nature of the Internet in our modern day life, the marketplace for online sales is huge, and so is the amount of competition.

Consumers are spoilt for choice and aren’t afraid to shop around. Serve up a sluggish website, and visitors will go elsewhere without hesitation. A slow e-commerce website means you’ll lose individual sales as well as any repeat business that may have come from those initial sales.

Load Impact did a study on this in 2012 and found 53% of e-commerce site owners lost money or visitors due to poor performance or stability on their site. SoWR- Graph - Lost Money copy

That’s the important point here. If you’re looking to grow a business through online sales, a badly performing website will not only hinder short-term sales, but it will seriously hurt your chances of long-term growth.

There are statistics to back this up. The correlation between website speed and conversion rates / revenue has often been documented internally within organizations. I have seen this first hand for several of my e-commerce clients. The positive impact of a fast website can be dramatic, even for the relatively small online retailers.

When it comes to the giants of online retail, you get to appreciate how massive an impact website speed can have. All the way back in 2006, Amazon evidently reported that a 100-millisecond increase in page speed translated to a 1% increase in its revenue. (source)

Former Amazon employee Greg Linden also alluded to this on his blog:

“In A/B tests, we tried delaying the page in increments of 100 milliseconds and found that even very small delays would result in substantial and costly drops in revenue.”

Avoid misdiagnosis by measuring

As we’ve already established, speed is a critical part of website usability and it differentiates the average businesses from the great businesses. A common problem for small and medium sized businesses is a lack of awareness around website performance and what an important factor it is.

It is easy to assume that a website is performing acceptably because it is bringing in sales. If a website isn’t bringing in any sales, it can be easy to assume that it needs a re-design or simply more traffic needs to be driven to it. These are dangerous assumptions to make without any evidence to back them up.

So how do you get the evidence you need? Measure, measure, measure! Sound like too much hard work? Consider the risks of not measuring:

  • Bad customer experience = bad reputation.
  • You may spend a significant budget on re-designing your website because “it’s not working” when actually all it needed was a performance audit.
  • You may increase your Pay Per Click (PPC) advertising budget to push more traffic to the website, but this just creates disgruntled visitors instead of happy customers. Indeed, this would equate to pouring money into the proverbial “leaky bucket”. Worse than that though, the more money you spend, the more disgruntled visitors you create!

How to measure website performance

For those new to the concept of performance monitoring, measuring the speed of a website may seem a lot simpler than it is.

The seemingly obvious way to measure how quickly a website is loading is to ping the homepage and… well… see how long it takes to load! If it loads in 3 seconds, great. If it loads in 10 seconds, not so great.

While that incredibly simple test is a good indicator in itself, it doesn’t come near to giving a complete picture of your website performance. There are many factors you need to consider if you want to get a true measurement of a website’s speed. Here are just a few:

  • Site-wide performance - The homepage is just one page. Testing how quickly the homepage loads ignores the rest of the website which could perform completely differently
  • Performance under load - if your website performs fine with 2 concurrent users, but then falls over with 10 concurrent users, you have a problem.
  • Geographical location - The website may perform acceptably from some countries, but not for others. A test from a single location doesn’t reveal the website’s performance from different locations around the world.
  • Real user behavior - real users behave differently. Some will land on a page and then leave immediately (known as a “bounce”), some will land on the website and visit several pages looking for information, some will submit a contact form or complete a checkout process if the website sells products online. In short, the best measure of a website’s performance is when it is under user load that is representative of real world scenarios.

So the best load tests comprise of multiple pages being tested, multiple concurrent virtual users who behave in different manners and originate from multiple geographical locations in the world.

But how do you decide what type of user scenarios to setup? i.e. what kind of user behavior do you want to mimic? This is where website traffic statistics come in useful. Tools such as Google Analytics will show you how your current visitors behave.

If you have a 10% conversion rate on your contact form page, then it would make sense to create a user scenario that mimics this and have 10% of your generated load use this scenario. Understand your current audience, and build up a set of user scenarios that are representative of their behavior, broadly speaking.

Understanding the technical terminology is an important first step before trying to setup your own load tests as well.

Load Impact provides a handy resource that will help you get your head around terms such as “ramping up”, “ramping down”, “virtual users”, “accumulated load time”, “load test execution plan”, “user scenarios” etc..

In part II of this article, I will delve into some real world website performance metrics as well as practical ways you can improve the performance of your website. Make sure to check back in next week.

 

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