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magento & ecommerce

Does Migrating to Magento Commerce 2 Help Grow Your Revenue?

Magento is one of the most popular eCommerce platforms for a reason – many people use it because it’s exceptional. Although many users don’t have much to complain, Magento 1 is nearing its long-awaited retirement. Support for Magento 1 is officially going to end in the coming June (2020).

Fortunately, its successor, Magento 2, is better than ever. It’s not going to be hard to use and it brings with it a lot of cool things. Migrating from Magento 1 to Magento 2 has never been more critical. Even if you’ve never used Magento, you should consider switching to Magento Commerce 2.

Either way, Magento 2 is very capable of growing your online store’s revenue. This research should be enlightening.

The Data

An early 2019 study, done by global consulting firm Stax Inc., shows the benefits of migrating to Magento 2.

The participants were retailers that used either Magento 1 or another eCommerce platform.

78.9% of respondents reported an efficiency improvement in content creation with Magento 2 to the tune of 60.6% time savings. It translates to monetary savings as the productivity increase allowed them to cut back on staff.

The best way to take note of how much Magento 2 has progressed from the original is to observe the KPIs (Key Performance Indicators). In the Stax Inc. study, the KPIs of downtime, site traffic, conversion rates, average order value, and mobile revenue all improved.

List of Revenue Growth KPIs

You might not be certain of how migrating to Magento 2 can help your eCommerce store. To provide some clarity, let’s have a look at how the above five KPIs behaved going from Magento 1 to Magento Commerce 2.

Downtime

In this study, downtime pertains to any period of time where customers couldn’t complete transactions due to outages or platform failures. This, of course, excludes updates and maintenance.

Before upgrading to Magento 2, the participants experienced significant downtime, especially when there’s heavy traffic. This is particularly problematic, as you can imagine. Outages make tracking target customers more difficult, if not impossible.

After moving to Magento 2, they saw a whopping 92.9% decrease in average downtime in the first year. This is owing to Magento 2's scalable architecture, which maintains superior performance under heavy site traffic.

Site Traffic

Site traffic is a highly important KPI in eCommerce. After migrating to Magento 2, the respondents reported a 24.8% increase in average site traffic.

Increasing site traffic is a major challenge for eCommerce companies. In this regard, the participants were pleased with Magento 2’s “out-of-the-box SEO tools.” They cited this feature as most responsible for improving site traffic.

Another great thing about Magento 2 regarding site traffic is that it allows eCommerce store owners to come up with personalized buyer journeys. In the case of the study participants, this feature helped them to keep customers on their site longer, which usually results in a proportional increase in the number of conversions.

Conversion Rates

This KPI might be even more important than site traffic. The study participants reported an average increase of 16.1% in conversion rates after the migration. This was during the first year.

Once again, this sizable increase was achieved through Magento 2’s support for more personalized buyer journeys. In addition, extensive checkout optimization and instant purchases also boosted buyer experience.

Generally speaking, the more user-friendly and the easier the checkout process is, the better the conversion rate. Therefore, you should never underestimate the effects of a seamless checkout process. Shopping cart abandonment goes down if you can provide a smooth checkout. This is what Magento 2 brings to the table: A user-friendly checkout experience that alleviates shopping cart abandonment.

Average Order Value

Although conversions and sales are the leading metrics for eCommerce stores, a lot of people fail to recognize the importance of upselling. A proper upsell strategy can help a business improve its revenue model and profitability.

The best way to track the effectiveness of upselling is to track the average order value. If this KPI goes up, customers are buying more per order (in terms of total dollar value). A number of things can affect this but perhaps none as significant as upselling and cross-selling.

How does Magento 2 help with this? By offering automated cross-sell and upsell features that help businesses improve average order values.

The respondents achieved a 4.8% increase in average order value after migrating to Magento 2. This increase is achieved solely as a result of Magento 2’s automated cross-sell and upsell features.

It’s a 4.8% increase in revenue, and if you’re able to upsell and cross-sell higher profit margin items, your profits will go up more than that. Amazon, for example, is believed to generate up to 35% of company profits as a result of cross-selling – that’s according to Forbes.

Additionally, some B2B respondents found Magento 2’s wholly integrated features hugely helpful for average order value improvement. Case in point, the advanced search helps customers to find everything that they’re looking for on the eCommerce site.

Mobile Revenue

The world is moving to universal responsive design. The technology is geared for a seamless experience from a smartphone/tablet to a PC.

Although an equilibrium has not been agreed upon, Magento 2 allows users to have a unified desktop and mobile experience. Believe it or not, this is a critical factor in revenue increase.

The research participants saw a 29.1% increase in mobile revenue post-migration. The unified desktop and mobile experience enabled in Magento 2 was quoted as a major contributing factor.

Is Magento 2 That Good?

Yes, Magento 2 is going to help eCommerce stores to grow revenue. As demonstrated in the above study, this lies in Magento 2’s enhanced eCommerce capabilities. The cost of the migration is low enough compared to the outsized advantages that higher revenue for the study participants should also result in increased profits.

Moving to Magento 2 can be a good idea for eCommerce store owners, which is why many have done their research and went ahead. In any event, those who have yet to do so are going to have to get started, as June 2020 is the last month that Magento 1 support will be available.

Be that as it may, migrating to Magento Commerce 2, whether it’s from Magento 1 or another platform, can be pretty involved and should not be taken lightly. Fortunately, there are professional agencies that have executed this many times before and may be of help.

By interactivated • on May 15, 2020

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