While some observers might think the answer to this question would be automatically “no”, geography does make a difference to ecommerce conversions – and there are various ways your own online store could make the most of the locations your customers are shopping from.
You’re probably already broadly aware of the counties, regions or even other countries where your shoppers reside. Buyers need to provide this information about themselves at the checkout stage, and it can also be seen in Google Analytics when Enhanced Ecommerce is enabled.
It’s much less likely, however, that you will have given much thought to how you could incorporate geographical variables into your marketing campaigns. By first knowing how to evaluate which locations are performing best with regard to such factors as sales, number of transactions and profitability, you’ll be able to target audiences with your marketing much more effectively.
As for what causes what might be very significant performance differences from one region to another, below are some of the factors to bear in mind – and how your brand might adjust its marketing approaches accordingly.
- Marketing costs. It might cost you more to reach a customer from, for example, London, than from York, such as if you are running a Google Ads campaign. So, if you know your total sales and marketing cost for each region, you might calculate the relative cost per conversion for each of those localities, and therefore profitability. It may be that you get more transactions from your London customers, for example, but that your York shoppers give you greater overall profit.
- Products. The products or product types of yours that are most popular might noticeably vary from one region to another. Even drilling down to certain product attributes such as colour, size and materials, you may see significantly differing preferences, which could have big implications for your regional marketing efforts.
- Population. Touching a bit on what we said above, you might gain more sales from certain cities, towns or regions, simply because they are the most populous. That’s why you might gain greater insight into the true levels of demand for your products on a region-by-region basis, if you divide the number of customers in each region by its total population. When you do, you may find that you’re getting poor value for money out of your marketing in one locality, but that you could benefit from upping your marketing spend in other regions.
- Household income. You’re likely to get a greater lifetime value (LTV) out of customers situated in geographical areas where the level of disposable household income is higher. So, checking which regions command the highest average household income could help you to direct your marketing towards more profitable localities. Statistics from the Office for National Statistics (ONS), for example, indicate that as of 2017, London had gross disposable household income (GDHI) per head of £27,825 on average; the equivalent figure for Wales, meanwhile, was a much lower £15,754.
When we draw attention to the above geographical factors, we aren’t saying that other demographics – such as age and gender – aren’t important. Those factors should be considered by ecommerce site owners as well, and can provide even greater insight into the customer buying patterns that help the savviest merchants to direct their marketing expenditure more effectively.
Give the Piranha Designs team a call now, whether at our Gibraltar, London or Edinburgh offices, and we’ll be pleased to have a chat with you about our various website design, SEO and marketing services that could make a significant difference to your brand’s success in 2020.