Conventional Retail Wisdom Might be Wrong for Online Retailing

Conventional wisdom in the retail business is that the longer a retailer can keep a customer in the store, the more the typical customer will buy. Paradoxically, small retailers operating online e-commerce sites might find the converse is true: the longer a user stays on a site, the less the chance that user will buy something.

Dane Atkinson, CEO of Sumall, an analytics company CEO, said that many online businesses tend to think of traffic in monolithic terms, namely that more traffic equals more money. That's wrong. 

“There’s a sweet spot where you’re getting someone to do a transaction,” Atkinson said. Using the company’s data, which includes more than 10,000 e-commerce stores and $1 billion transactions, Sumall noted that, for most businesses, that sweet spot is around 3 minutes and 20 seconds, adding that if a customer is on the site for 14 minutes, they’re more likely to browse that visit than buy.

Some might suggest there is a logical explanation for such behavior. Many users go online when they already have decided to buy a particular item, and simply are looking for which particular supplier will handle the transaction.

In such cases, a short session indicates a user has concluded that one specific online provider has the best combination of value and price, or at least, "good enough" to trigger an immediate purchase. 

A longer session might indicate a prospect has not yet decided to buy a specific item, but is doing product research.