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July 6, 2010

The Most Important Source for Online Wine Sales: this will surprise you

I’ve been doing some research into shopping comparison engines and I’ll publish that post in the next few days. It highlights some effective ways of getting more online wine sales.

But first I thought I’d outline a key insight from that research in this separate post.

How different traffic sources convert

I’ve put together this chart which illustrates the importance of various traffic sites by volume and sales conversion. Click on the pic below to launch the full size chart.

Where does the best internet traffic come from

Where does the best internet traffic come from?

The vertical axis is the conversion rate of the websites. The horizontal axis is the number of US people who visit each website each month. The colors represent a different website.

So, put simply, the bigger the area of the bar, the more converting traffic you will get from this source.

I originally did this to illustrate how smaller amounts of traffic from comparison shopping engines are worth a lot more than normal traffic.

The results

I was looking to establish how important the shopping comparison sites were but I didn’t expect Google Product search to be so big! It’s the green bar at the start (see methodology below for how I split this out).

Facebook (blue), on the other hand, may get lots of traffic (horizontal axis) but it’s poor at converting (vertical axis) so the size of the bar is much smaller. This is not a surprise as it seems to be mainly chat based interaction of friends rather than purchase type searches. The question in my mind was whether the quantity of searches would make up for the poor conversion.

This could change in the coming years and will be interesting to watch with services like Payvment coming out.

If I could break out Yahoo shopping then Yahoo may do a lot better as well. However there is no obvious way to do this using my methodology (any ideas are welcome).

Here’s the process I used and other notes: that methodology thing

  • Google results are now categorized into a few different types on the search results page – video, news, updates, images, discussion, blogs, books, maps and shopping. So I split out Google categories because these results now placed in page rather than separately through a menu header or sidebar (Yahoo, MSN, Bing). Shopping (product search), maps (local search), organic search (normal listing) and adwords (right hand side) take about a quarter of the SERP page.
  • Social media is regarded as being less commercial and therefore more poorly converting traffic.
  • Local Search is regarded as being more commercial and likely to result in in-store purchase as well as online.
  • Comparison Shopping Engines are regarded as being purchase related searches with resulting high conversion rates (the topic of my next post).
  • Google Organic search has a conversion rate of 1.4%, based off fireclick conversion rates (for the Specialty category first time visitor). I have adjusted others based off this benchmark conversion rate.
  • Some adjustments are based off my own knowledge (I’m reading that facebook is struggling with conversion for instance).
  • Conversion rates for repeat visitors from any source should be higher, the results above are for first time visitors (your email list should be much higher still).
  • Taken from the perspective of a wine retail eCommerce site.
  • Individual results could be much better or much worse – these are an average.
  • Illustrative Only. I’m really just making a point, visually.

Here’s the sources

Traffic: Quantcast
I used Alexa to net out the email traffic from Google, Yahoo and MSN/bing
My Conversion figures are from fireindex. They are for “First Time Visitors” of “Speciality” webstores. They seem to give middling results whereas others can be as low as 0.01% through to 20%.

The debate

Now the detail can be debated endlessly but my point is that your limited time and attention should be given to the greater converting traffic versus other sources. Comparison shopping engines are proving great converters.

Do you disagree? Debate encouraged, please comment below!

Related posts:

  1. Why are Comparison Shopping Engines so Important?
  2. Conversion analysis of the shopping cart leads to 34% increase in sales
  3. Selling Wine Online: Taking a Local Wine Store Online – the Basics
  4. Wine Adwords: The Most Important Wine Tip you’ll ever get
  5. Wine-Searcher, a Price Comparison Shopping Site Review
Filed Under: Comparison Shopping Engines Tagged With: 5 Comments
  • http://twitter.com/BobbyC10 Bobby Cintolo

    Hi Bruce,

    I think it depends on two things: the marketplace and what is considered a conversion.

    Google Product Search is clearly an effective channel for almost any merchant because Google is a credible source for any information/solution. Marketplaces like Shopping.com, Shopzilla, etc do not have the same reputation among wine consumers. A marketplace like Snooth or Wine Searcher.com tend to cater to a specific niche or industry and may be more effective.

    For most people conversion = revenue or a sale. What happens if that sale/conversion takes 2+ impressions or visits to the merchant's website/store? Does the time from when a consumer visits or sees a merchant's brand in social media or a search engine until they make they purchase get factored into conversion? If not, maybe it should because their brand may have influenced the purchase decision. In this case additional channels may have an impact on the end result.

    Your data displays the importance of allocating more time, effort, and funding to marketplaces. Given that eCommerce merchants select the right marketplaces they should see the returns and benefits quickly. Keep in mind the influence other channels have

    A winery or wine merchant selling online would be wise to read and consider the information Bruce is presenting here.

    -Bobby Cintolo

  • http://twitter.com/BobbyC10 Bobby Cintolo

    Hi Bruce,

    I think it depends on two things: the marketplace and what is considered a conversion.

    Google Product Search is clearly an effective channel for almost any merchant because Google is a credible source for any information/solution. Marketplaces like Shopping.com, Shopzilla, etc do not have the same reputation among wine consumers. A marketplace like Snooth or Wine Searcher.com tend to cater to a specific niche or industry and may be more effective.

    For most people conversion = revenue or a sale. What happens if that sale/conversion takes 2+ impressions or visits to the merchant's website/store? Does the time from when a consumer visits or sees a merchant's brand in social media or a search engine until they make they purchase get factored into conversion? If not, maybe it should because their brand may have influenced the purchase decision. In this case additional channels may have an impact on the end result.

    Your data displays the importance of allocating more time, effort, and funding to marketplaces. Given that eCommerce merchants select the right marketplaces they should see the returns and benefits quickly. Keep in mind the influence other channels have

    A winery or wine merchant selling online would be wise to read and consider the information Bruce is presenting here.

    -Bobby Cintolo

  • http://twitter.com/BobbyC10 Bobby Cintolo

    Hi Bruce,

    I think it depends on two things: the marketplace and what is considered a conversion.

    Google Product Search is clearly an effective channel for almost any merchant because Google is a credible source for any information/solution. Marketplaces like Shopping.com, Shopzilla, etc do not have the same reputation among wine consumers. A marketplace like Snooth or Wine Searcher.com tend to cater to a specific niche or industry and may be more effective.

    For most people conversion = revenue or a sale. What happens if that sale/conversion takes 2+ impressions or visits to the merchant's website/store? Does the time from when a consumer visits or sees a merchant's brand in social media or a search engine until they make they purchase get factored into conversion? If not, maybe it should because their brand may have influenced the purchase decision. In this case additional channels may have an impact on the end result.

    Your data displays the importance of allocating more time, effort, and funding to marketplaces. Given that eCommerce merchants select the right marketplaces they should see the returns and benefits quickly. Keep in mind the influence other channels have

    A winery or wine merchant selling online would be wise to read and consider the information Bruce is presenting here.

    -Bobby Cintolo

  • BruceMcGechan

    Excellent points Bobby.

    Tracking down where the initial interest came from is important and, as you no doubt know, it's called “attribution”. As in where to attribute the sale. I'm guessing you'd agree with the following?

    If a customer saw a wine review on someone's blog or facebook page and that page had a link to your site then you would attribute the sale to that link.

    Attribute it because your website analytics software would be able to track this link directly. As it can for many other traffic sources.

    The problem comes when the
    - customer actually read a great wine review in a (paper) wine magazine 3 weeks before he purchased
    - two weeks before he was reading a blog which had that wine advertised in the Google Ads on the webpage, so he clicks on it, but didn't buy as perhaps it was shipped from out of state
    - then a week later decided he really wanted to buy that particular wine, searched for it on google, saw it listed at a local retailer and clicked on the product search to purchase it online.

    (Or didn't click on it but walked around the corner to the retail store and purchased it off-line!)

    So Google Product Search is attributed with the sale but it really originated from a review in a normal magazine.

    There are ways to get round this, of course. A good approach is Avinash Kaushik's Paid Search Analytics: Measuring Value of “Upper Funnel” Keywords
    http://www.kaushik.net/avinash/2009/02/paid-sea…

    I was going to write a post about attribution later but, thanks to your comment, I'll bring that forward.

  • http://twitter.com/BobbyC10 Bobby Cintolo

    That is exactly where I was going Bruce, well put. Attribution is huge challenge for merchants and it only gets more difficult as the number of channels continue to expand. I think this would be a great topic for further elaboration.