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Does the 80/20 rule apply to ecommerce?

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The 80/20 rule is the idea that, in most cases, 80% of the results stem from 20% of the effort. Since it was originally coined by an economist in 1894, the concept has been applied to topics from business to health. Ultimately, it suggests that a majority of the outcome will come from a minority of the input. But how might this apply when it comes to ecommerce? There are two ways you could interpret it:

  • The majority of your revenue comes from a small percentage of your customers
  • Most of the results you see on your site can be attributed to a focused number of tactics

The precise ratio or numbers aren’t what you should focus on here. Break it down into the more simple premise that focusing your efforts on the right tactics can generate more revenue and conversions than time spent elsewhere. If you’re working with a small team or limited resources, it becomes more particularly important to identify what the ‘20%’ is that you should be focusing on. 

Visitors who use site search convert faster

Forrester research claims that 43% of site visitors navigate straight to the search box, and those visitors are two to three times more likely to convert than shoppers who browse. This isn’t just the case for established brands with a wide range of inventory either. One Econsultancy study of smaller, independent online retailers found that the overall use of search was lower than that of the Forrester research, but that visitors who searched accounted for almost 14% of revenue. 

Optimizing your site’s search experience may involve some upfront investment and work, but once a search solution is successfully integrated with your ecommerce store, the majority of the work is done. Of course, you should review your search reports to continually identify opportunities to refine redirects or autocomplete suggestions, but the time and effort involved is minimal. 

Rule-based merchandising automates manual tasks

Rule-based merchandising allows you to make sweeping changes across your ecommerce store in just a few clicks. From there, the rest of the work is automated as your rules kick in and your category and results pages update themselves. 

This is an opportunity to leverage the 80/20 rule in another way: if 20% of your products generate the majority of your conversions or revenue, then these are the products that should be the focus of your merchandising. Boosting rules can promote these products to the top of category pages, demote them as they sell out, and re-position them when they come back in stock. Once this rule is set, it will continue to run and update without the need for you to manually monitor stock levels or intervene on your site. 

The same goes for your landing pages and campaigns. Take some time to review which perform better than others and double down on them. 

Work smarter, not harder

The 80/20 rule is not too dissimilar to another well-known business trope: work smarter, not harder. Is it a cliche? Yes. Is there some truth to it? Of course. We’ve all experienced days or weeks that were busy without necessarily being productive. Like anything, focusing on the tasks that deliver the greatest pay-off is key when you’re under pressure. That’s not to say you should abandon all other aspects of your ecommerce strategy. Perhaps organic social media doesn’t generate a significant proportion of your revenue – that doesn’t mean you should close your accounts. But just be conscious of how you divide up your time if there are more lucrative opportunities you could be focusing on. 

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