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Quantifying the Financial Impact of Poor Search Experience on eCommerce

Updated: Apr 23, 2023

TL;DR: Improving on-site search directly impacts revenue, as customers rely on internal site search to find products quickly and efficiently. To understand how much bad internal site search is costing your eCommerce, look at your conversion rate, average order value, customer lifetime value, search exit rate, abandoned cart rate, search engine ranking and the user experience of your website.

Did you know:

  • A 1-second improvement in site search speed can result in a 1.8% increase in revenue. (BigCommerce)

  • 74% of online shoppers abandon a website if they can't find what they're looking for within 2 minutes. (Baymard Institute)

  • eCommerce sites with poor search functionality are 80% more likely to have a bounce rate above 25%. (Industry Data)

  • Poor site search is a top reason for cart abandonment, with 42% of shoppers citing it as a reason for leaving a site without making a purchase. (Baymard Institute)

Internal site search is essential for every eCommerce business.

Improving on-site search directly impacts revenue, as customers rely on internal site search to find products quickly and efficiently.

Not yet convinced?

No problem. We’ve narrowed down crucial metrics to help you understand how much your eCommerce loses due to crappy on-site searches.

Quantifying the Financial Impact of Poor Site Search on eCommerce

Is internal site search as vital as you’ve heard? Or is that another lollapalooza marketing gimmick?

The jury is in; let’s look at the following vital touchpoints for an informed assessment of how your business is hemorrhaging cash due to poor site searches.

#1: Conversion Rate

The conversion rate is the first metric for quantifying the financial impact of poor site searches on eCommerce. That is, the number of website visitors that complete a specific predetermined action, such as making a purchase, completing a form, downloading a PDF, or signing up for a service.

In general eCommerce terminology, the conversion rate is the percentage of website visitors who purchase.

A high conversion rate proves that your website effectively engages visitors and leads them to become paying customers. And a low conversion rate signals the opposite, which could mean bad UX design, poor navigation, or a checkout process.

As a prudent eCommerce merchant, your aim should be to maintain a high conversion rate.

You’re not in business to joke around, are you?

If customers can’t quickly find what they want, they drop off the radar. They leave the site without purchasing, which means lower conversion rates. That means everything you did for that period is a total waste!

According to Forrester Research, visitors who use site search are 2-3 times more likely to convert than those who don't. The same study found that visitors who use site search have a 50% higher average order value than those who don't.

So the math is pretty straightforward:

Compare the conversion rate of visitors who use the search function to those who don't.

And you can understand how much money you’ve been leaving on the table due to poor internal site search.

To calculate the conversion rate, you can divide the number of completed purchases by the total number of website visitors. And then multiply the outcome by 100.

For example:

If your website had 10,000 visitors in January and 1000 of those completed their transaction, your conversion rate for January would be:

Conversion rate = (1,000 /10,000) x 100 = 10%.

Note: Your conversion rate can vary significantly depending on your industry, product type, and target audience. Therefore, it's essential to benchmark your conversion rate against industry standards and continually work to improve it through optimization and testing.

Consider using these tools for benchmarking: SimilarWeb, SEMrush, and Google Analytics.

#2: Average Order Value

Average order value (AOV) measures the total $$$ amount a customer spends during a single transaction on your eCommerce website.

To understand your AOV, divide the total revenue generated in a specific period by the total number of orders.

That is:

AOV = Total Revenue / Number of Orders

For example, if your eCommerce website generated $100,000 in revenue from 1,000 orders in January, the AOV would be:

AOV = $100,000 / 1,000 = $100.

That means your customers spent $100 per transaction in January.

A high AOV indicates that customers are spending more money per transaction, which means increased revenue and profitability for your eCommerce business. But a low AOV suggests that customers are purchasing low-cost items or not buying as much as possible.

So what has that got to do with internal site search?

Well, glad you asked!

An excellent internal site search is vital for sustaining high AOV because if customers cannot find what they need, how will they buy from you? With optimum internal site search, customers find the products they love or might love.

With intelligent internal site search like HeyDay, customers can search for products by keyword or category. And your system can tailor search results to their query, so they don’t have to struggle to navigate your store.

Again, Heyday’s algorithm helps you upsell to customers by suggesting related or complementary products, which can increase the customer's order value. For example, if a customer searches for "running shoes," the search results can also suggest socks, shorts, or other running assets.

That’s not all.

HeyDay helps you recreate your store for each customer by showing them only what they want. Such an intelligent, personalized shopping experience is one of the secrets of eCommerce behemoths like Amazon. It helped them build customer loyalty and encourage repeat purchases.

#3: Customer Lifetime Value

Customer lifetime value (CLV) is one of the essential metrics for eCommerce businesses.

CLV assesses the total revenue a customer will bring to your online store over their relationship.

It considers the customer's average order value, frequency of purchases, and customer relationship duration.

To calculate CLV, multiply AOV by the Number of Repeat Purchases and Average Customer Lifespan. Then subtract the Customer Acquisition Cost from the outcome.

CLV = (Average Order Value x Number of Repeat Purchases x Average Customer Lifespan) - Customer Acquisition Cost.

For example:

Assume your AOV is $100, the client makes 5 transactions from your eCommerce site per year, the specific customer lifespan is 3 years, and you spent $50 on Facebook ads to acquire the client.

The CLV will be as follows:

CLV = ($100 x 5x 3) - $50 = $1,450.

That means your business will get $1,450 in revenue from that consumer throughout their relationship with your company.

Again, how does that involve an internal site search?

Look at the numbers:

A study by Forrester Research found that 43% of customers are likely to switch to a competitor if they have a poor search experience on a website. If customers become frustrated with a site's search function and cannot find what they need, they move to your competition.

Also, ​​the Baymard Institute research referenced earlier found that 70% of e-commerce site searches get abandoned. If your site search makes it difficult for customers to find what they need, they bounce to another site.

And you lose out on building that long-term relationship with them.

#4: Search Exit Rate

The search exit rate measures the percentage of users leaving your eCommerce website after an internal site search but before purchasing or performing any other desired activity.

Measuring your search exit rate is crucial as it helps you test the effectiveness of your site search in assisting prospects in finding what they need.

And to calculate your search exit rate, you divide the number of users who leave after a search by the total number of users who conduct searches. And multiply the outcome by 100.

For instance:

Assume that 4,500 out of 15,000 visitors to your eCommerce website who used the search bar left without buying anything.

Site exit rate = 4,500/15,000*100 = 30%.

In that case, 30% of site visitors who searched did not buy anything or complete any other intended action before exiting your website.

You can find trends and locations where your site search functionality needs improvement by tracking the search departure rate over time. According to a study by Baymard Institute, the average eCommerce site has a 14.8% search exit rate, meaning that almost 15% of users leave the website after using the search function.

Hence, a high search exit rate suggests that consumers’ search results aren’t matching their search intent, resulting in annoyance and lost purchase opportunities.

With HeyDay’s smart search tool, you can effectively lower the search exit rate and boost conversions by optimizing your internal search capability with tools like autocomplete, spell-check, and product suggestions.

#5: Abandoned Cart Rate

Abandoned Cart Rate measures the percentage of online shopping carts users leave before completing the checkout process.

That metric gives you insight into how effective your eCommerce website's checkout process is and whether users face any barriers in purchasing.

And to calculate your store’s shopping cart abandonment rate, you divide the total number of completed transactions by the number of initiated sales (i.e., adds to basket). You then subtract the result from 1 and multiply the outcome by 100.

For example:

If 200 people completed their transaction out of 750 initiated sales, your abandoned cart rate is:

1-(200/750) = 70%.

70% of buyers who started the checkout process left the website without purchasing.

Research from Baymard Institute shows buyers abandon 69.82% of online shopping carts. Your internal site search can also contribute to a lost sales opportunity, among other possible culprits.

Sometimes, buyers forget what they’re shopping for after adding multiple items to their carts. In such instances, they often empty their cart, return to the product page to cross-check the specs, and never complete the transaction.

With insight from HeyDay into such buyers’ journeys, you can optimize your product listing by adding a product image with a summary of crucial product specs for reassurance.

#6: Poor SEO Ranking

If you keep upsetting your website visitors with poor on-site search experience, there’s no way search engines like Google will rank your website.

Lack of sophisticated internal search algorithms, an obsolete search function that ignores synonyms and related keywords, or a poorly designed search results page that fails to display product information in an easily understandable way are just a few triggers of poor SEO.

With Heyday’s intelligent site search, you give your prospects a joyous site search experience without incurring many expenses.

An excellent search engine presence is like oxygen for eCommerce merchants. Without an excellent SEO, you’re dancing in the dark. Your store might as well be buried under a rock.

#7: Bad User Experience

User experience (UX) is a user's overall experience while interacting with a product, service, or system. It encompasses all user interaction aspects, including perceptions, feelings, behaviors, and satisfaction.

Good UX design aims to make the user's experience as smooth and enjoyable as possible. That involves understanding the user's needs, preferences, and goals and designing the product or service accordingly.

And contrary to popular opinion, having an excellent on-site search is central to delivering a positive, efficient, and enjoyable experience for the user, ultimately increasing user engagement and satisfaction with your product or service.

The numbers tell the whole story:

  1. A study by PwC found that 32% of customers would stop doing business with a brand they loved after one bad experience. Losing customers due to poor UX is proportional to revenue loss and a negative brand reputation.

  2. Forrester Research found that every dollar invested in UX can return between $2 to $100. One way to reduce support costs is by designing a user-friendly on-site search that reduces the need for customer support inquiries.

How to do that?

  1. Ensure the search bar is visible and prominent. Make the search bar easy to find and accessible from any page on your website.

  2. Apply "autocomplete" and spell-check. HeyDay’s free site search with autocomplete and spell check helps users find what they want faster.

  3. Display relevant search results. HeyDay’s algorithm returns the most relevant results first.

  4. Provide filters and sorting options. Provide filtering and sorting options to help users refine their search results and get a better search experience.

  5. Analyze search queries and results. Using HeyDay analytics tools to track user behavior and search queries helps you improve the search experience for your users.


About the Author

Tom-Chris Emewulu is HeyDay’s Digital Evangelist. With 8+ years of digital marketing and business development experience, he crafts high-intent, high-converting, data-driven SEO articles that put brands on page 1 of Google search. Forbes, DW, Business Insider, Businessss2Community, and many other publications have featured his works. You can find him on Social Media via @tomchrisemewulu.


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