Brick-And-Mortar Companies Convert Fewer Online Shoppers To Buyers

Retailers without brick-and-mortar stores convert far more online shoppers to buyers than companies that depend on store sales.
Retailers without brick-and-mortar stores convert far more online shoppers to buyers than companies that depend on store sales, a market researcher said Thursday.

Nine of the top 10 retailers in February, based on conversion rates, are cataloguers, online-only stores or a TV shopping network, Nielsen/NetRatings said. Women's apparel seller Coldwater Creek was the only company in the top 10 with a significant brick-and-mortar presence.

Companies without stores have an advantage because shoppers heading to their sites are more often ready to buy, Nielsen retail analyst Heather Dougherty said.

"There's still significant (online) research going on for offline purchases, so consumers are less likely to convert at retailers with a brick-and-mortar presence," Dougherty said. "On the flipside, if someone gets a catalog in the mail, they're probably going to make a purchase when they go to the catalog site."

In addition, cataloguers, such as Lands' End and L.L. Bean, have been in business for a long time, and have built up a loyal following. The same applies for TV shopping network QVC Inc., which had the highest conversion rate, 16.3 percent, in the Nielsen rankings.

"It makes sense that someone like QVC would have a lot higher conversion rate," Dougherty said. "They have a very loyal, repeat customer base."

Online-only retailers, such as and EBay, have high conversion rates, because transactions have to take place on the site. There's no option to go to a local store. and EBay also have loyal, repeat customers.

Retailers with a strong brick-and-mortar presence, on the other hand, also want to get shoppers in the stores, Dougherty said. Research indicates that store shoppers will often buy more than intended, either out of impulse or because they see something else they need or wanted to buy anyway.

"The difference in conversion rates (with online retailers and cataloguers) is mostly indicative of the various business models," Dougherty said.

Retailers with stores, however, should have online conversion rates equal to the average of 4.9 percent among the top 100 retailers. An even better standard would be the average for retailers in a particular category.

"An insanely low conversion rate can definitely be a warning signal," Dougherty said.

The top 10 online retailers and their conversion rates were QVC, 16.3 percent; Lands' End, 14.8 percent;, 13.5 percent;, 13.4 percent;, 13.4 percent;, 12.8 percent; Coldwater Creek, 12.7 percent; EBay, 12.3 percent; Yahoo Shopping, 12.1 percent; and, 11.8 percent.

Nielsen/NetRatings also ranked the top 15 online retail categories, based on average order size. The top three were computer hardware, $584.47; event and movie tickets, $121.60; and automotive, $119.23.

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