Breaking down ecommerce maturity models

Ecommerce businesses usually grow in stages. Whether your online brand has been around for six months or six years, it can be useful to evaluate where you’re currently at in your business development journey—with a clear sense of where you’d like to go.

Ecommerce maturity models help businesses understand their current stage of development so they can chart the right path for continued growth. Think of a maturity model as a business GPS that situates your online shop on a map and gives you direction to navigate to the next level. Or, as Buy with Prime Partner Klaviyo noted, “a maturity model is a roadmap for progress.”

Ecommerce maturity models come in a variety of flavors. Big research firms such as Gartner and Forrester and consultancies like Avanade have their own versions. Buy with Prime Partner Above The Fray breaks down its ecommerce maturity model into six distinct stages, while ecommerce provider BigCommerce structures its model in four basic tiers.

Though the individual labels, tiers, and criteria may differ across models, the stages of ecommerce maturity generally follow a standard progression that’s most often simplified as crawling, walking, running, and flying.

This article is broken into three parts:

1. The four main stages of ecommerce maturity
2. Guidance to help you understand where you are on the maturity scale
3. Tactics to elevate your business from one stage to the next
4. Applying tactics to the maturity model

1. The four main stages of ecommerce maturity

Stage 1: Foundational
Key characteristics: single sales channel | basic website | limited marketing and analytics

If you’re at this stage of the maturity journey, you have a product or service that you’re selling online through a functional store that is receiving and shipping orders. You offer multiple payment options, you have your pricing figured out, and you’re likely selling through a single channel. Sellers at this stage have a store on online sites like Amazon or eBay and may offer a basic, templated shopping experience through an ecommerce provider like BigCommerce.

In the foundational stage, pain points can include manual scaling and managing your operations. If you’ve set up your own site, you’re likely working on delivering a more polished, presentable customer experience, and looking for ways to make the checkout process easier for shoppers.

“An omnichannel approach is imperative because single-channel strategies don’t promote long-term growth, as shoppers don’t shop exclusively on a single channel,” says Sharon Gee, SVP Sales & Partnerships at Feedonomics. “To meet shopper expectations, merchants who want to scale their businesses are constantly looking to diversify their ecommerce portfolios and advertise on multiple channels.”

At this stage, you’re still figuring out their marketing strategy, experimenting with organic social promotion, looking for ways to tap into the power of search engine optimization (SEO), and beginning to dive into the world of data to understand what drives sales.

Stage 2: Growth
Key characteristics: multiple sales channels | streamlining operations | omnichannel marketing

When you’re in the growth stage, your website and product descriptions are fully optimized for SEO, and you’ve either implemented or are investigating third-party solutions to increase sales. As you reach a higher volume of sales, you’re looking for ways to simplify your operations through automated fulfillment solutions, such as Fulfillment by Amazon (FBA) or Amazon’s Multi-Channel Fulfillment (MCF) service. You’re also beginning to take advantage of data, and getting familiar with the types of shoppers visiting your site.

At this stage, you’re starting to invest in user-generated content like customer reviews, sharing insights on blogs, social media, and newsletters, and are tracking conversions from marketing campaigns across sales channels.

Stage 3: Optimization
Key characteristics: iterative testing | basic automation | robust analytics

At the optimization stage, you take active steps to evolve into a fully omnichannel operation. You use analytics and integrated third-party tools to gain insights into customer behavior so that you can deliver personalized experiences to different customer segments. By implementing A/B testing you’re optimizing checkout conversion rates and improving user experience (UX). You’ve elevated your marketing using advanced SEO tactics, established segment-specific email campaigns, and invested in paid social media ads to reach your customers wherever they are.

“It is critical for merchants to establish diversification in their paid advertising strategy to reach more shoppers across the different channels they use to shop online,” says Matt Dornfeld, Feedonomics Sr. Director of Global Partnerships. “While a mix of both search and social advertising (including channels like Google, Microsoft, and Meta) is a good start, merchants should think outside of the box, and need to explore the greater scope of opportunities to attract shoppers. Those strategies can include affiliate marketing, display ads, and remarketing.”

At this stage, you have an established technology backend system that allows you to improve operational efficiencies. You’ve integrated automation tools to streamline fulfillment, set up analytics dashboards to track sales across channels, are testing new customer engagement channels such as SMS, and prioritized resources to support customers.

Stage 4: Innovation
Key characteristics: artificial intelligence | personalization | global growth

At the innovation stage, your ecommerce business is achieving its growth goals, and you’re looking for what’s next. You’re no longer seeking to mimic your top competitors. Rather, you’re raising the bar with artificial intelligence (AI) and machine learning to deliver tailored experiences that meet your customers’ needs on every channel. Your mastery of data empowers you to find opportunities for global expansion and identify gaps you can fill.

Businesses at this stage are perceived as market leaders. They’ve set the bar by using advanced automation to manage fulfillment and inventory, inventing new ways to use analytics to deliver customized one-to-one personalized experiences (such as through SMS), and using AI to create ads that drive engagement and support customers across channels.

2. Where do you stand on the ecommerce maturity scale

Identifying your current stage of development is an essential first step in using any ecommerce maturity model to chart a growth strategy that’s aligned with your needs and capabilities. Knowing where you stand allows you to get more strategic in setting growth goals and allocate resources more effectively.

Above The Fray offers a simple questionnaire to help you determine your maturity stage. Your responses to questions about the size of your team, the number of sales channels, the payment and technology tools that you use, and how you handle inventory and fulfillment, helps the agency’s algorithm the inputs to place you in a maturity tier. The inputs you provide are turned into a prescription of proven tactics that you can take to elevate your business to the next level.

“One of our clients at the foundational stage of the maturity journey was facing the challenges of limited market reach, inefficient processes, and untapped potential,” says Caitlin Aronin, Director of Digital Marketing at Above The Fray. “Working hand-in-hand with its team to implement our recommendations to level up their ecommerce maturity over the course of a year, we took the client from an information-only site to an ecommerce brand that was selling on multiple marketplaces and maximizing its potential on a variety of digital marketing channels. Witnessing the transformation into a thriving ecommerce powerhouse has been truly inspiring.”

Above The Fray’s assessment offers a robust and actionable plan to help you grow. There are some basic indicators that you can track to determine where your business falls on the maturity scale.

Evaluate the functionality of your websiteAssess the quality and functionality of your website, especially the digital infrastructure (e.g., content management system) that you rely on. You can assess your site in a variety of ways, such as asking friends or family to perform tasks, using affordable assessment tools, or hiring an agency to help provide perspective.

Looking at the volume of pages, ease of navigation, page load time, number of payment options, and other variables that guide users to convert offer useful signals of maturity.

If you’re still working on setting up the basic elements of your site and you don’t have full clarity on conversion rates, you’re in the foundational stage. If your assessment indicates that your website is helping to drive your growth goals and your UX improvements are paying off, then you’ve progressed to the growth stage.

“Understanding shopper behavior on your website is absolutely vital. You’ve invested significant resources to attract shoppers, but if they struggle to navigate your site or can’t find the information that they need to feel confident making a purchase, it can lead to significant problems,” explained Josh Jennings, Manager of Conversion Rate Optimization at BigCommerce. “By analyzing how shoppers interact with your site, you can pinpoint specific pain points, address usability issues, enhance the overall user experience, and maximize conversion rates. This ensures that the investments you made getting shoppers to your website translate into meaningful engagement and sales.”

Analyze your sales and customer baseA good measure of maturity growth is looking at the volume of your sales and the size of your customer base. If your data shows that you’re steadily acquiring new customers, and you’re seeing signals of return purchasers, you’re likely in the growth stage. If your analysis suggests that your investments in automation are driving operational cost savings, and the adjustments you made based on your A/B tests are helping broaden your customer base and driving more conversions, you’ve reached the optimization stage.

Assess your marketing and customer engagementTake an objective look at the sophistication of your marketing and customer engagement strategies. Ask yourself: Am I getting enough SEO exposure for my brand? Are my organic social media and promoted social posts driving conversions? Are my newsletter subscribers growing? Do I need to hire a marketing agency?

If you’re primarily focused on building brand awareness, trying to expand your reach, and still working out the right channel mix for your marketing campaigns, you’re in the growth stage. If your robust analytics allows you to deliver customized and personalized marketing programs to specific customer segments and you’re seeing more engagement with your loyalty programs, you’ve attained optimization-level maturity.

“Finding the right mix of marketing tactics and channels to reach the right customers is an ongoing challenge for online brands,” says Rich Gardner, SVP of Strategic Partnerships at Klaviyo. “Regardless of maturity stage, as a proven way to drive engagement and build customer loyalty, email marketing is table stakes for growth. In fact, our marketing mix study found that nearly 77% of ecommerce businesses ranked email marketing in the top three ROI-generating marketing channel.”

Now that you have a good sense of ecommerce maturity models and have some ideas to help you determine the maturity of your business, the next question is: Are you ready to evolve your business?

Determining your readiness to move up the maturity scale requires some introspection. On a fundamental level, you and your team need to decide whether your business culture is capable of continuously adapting and improving in crucial areas like customer experience, analytics, and automation. You also need to take a serious look at the processes you’ve established to determine if you’re ready to facilitate and manage the change needed to evolve.

3. Tactics for elevating your business from one maturity stage to the next

After you’ve assessed and analyzed some of the basic indicators of growth and found your place on the maturity scale, your next best step is to dive into two business essentials: getting to know what your customers want and finding the right success metrics to track your development—applicable whether you’re at the foundational or innovative stage.

So let’s start with some general advice for businesses at any maturity stage.

Understand your customers’ expectationsEcommerce maturity can be measured by the readiness of your brand to meet the ever-changing needs and expectations of today’s discerning consumers. Your business operations need to offer a connected shopping experience across channels, giving consumers multiple payment options, and a convenient, seamless checkout.

It also means meeting and exceeding their expectations when it comes to delivery speed, transparent shipping fees, accurate delivery estimates, order and return tracking, and cross-channel customer support. And, don’t forget the importance of wooing potential customers with personalized experiences.

Very few ecommerce businesses can meet or exceed customer expectations, and none of them can do it overnight. The path to achieving true business maturity is always incremental—the most important part is making sure you’re taking the steps to evolve your business to meet your growth goals.

“In today’s digital world, customers have more choices than ever before, so that’s why it’s more important than ever to understand your customers and put them at the forefront of everything you do,” says Airon White, Senior Manager of Product Marketing at BigCommerce. “By using personalization at every stage of the customer journey, such as recommending products that they’re likely to be interested in, offering personalized discounts, and creating personalized content, you can deliver a truly memorable experience that will keep them coming back for more.”

Identify the right metrics to trackChoosing the metrics to track can be essential for any business attempting to climb the ecommerce maturity ladder. As you move from the foundational stage into a growth and optimization mindset, using data to make informed decisions becomes increasingly critical. Filtering out the noise and honing in on the key performance metrics that will have the most impact on your business can put you on a path to maturity.

“Data is the foundation of any business growth strategy, and having your analytics in order is critical to assessing your current state,” noted Rich from Klaviyo. “Whether you’re running iterative A/B tests or consistently looking at some key metrics, the analytics that you capture about your marketing efforts and your customers is how you can identify opportunities to continually evolve your business.”

As one of our Buy with Prime sales leaders, Dan Jeong, puts it, “If you can’t measure it, you can’t improve it.” Dan expanded on the importance of measurement in this article about the building blocks to elevate your business.

To help you on your way, here’s a short list of critical metrics to track:

• Conversion rate (CVR): Your conversion rate is determined by dividing the number of conversions by total number of visitors. More than any other metric, your conversion rate can make you or break you in ecommerce. Check out our detailed set of 10 best practices for boosting your ecommerce conversion rate.
• Average order value (AOV): Average order value is a measurement of the amount your customers typically spend on an order. To calculate AOV, divide total revenue by total orders.
• Customer lifetime value (CLV): Developing longer-lasting customer relationships allows you to spend less constantly acquiring new customers. Both retention and acquisition strategies are critical for growth, but it’s typically cheaper to retain customers than to acquire new ones.
• Customer retention rate (CRR): Ecommerce businesses that lose customers as fast as they acquire them likely have serious issues with their products or their customer experience. Tracking return purchasers or visitors is a good metric to consider.
• Customer acquisition cost (CAC): Calculated by dividing total amount spent on acquisition efforts - such as sales and marketing - by the number of new customers acquired during a specific period (e.g., a promotional campaign), customer acquisition cost tells you how much you’re spending to attract new customers. Unusually high or constantly growing CACs are indicative of a problem.
• Return on ad spend (ROAS): In ecommerce, tracking your ROAS can help you avoid spending more on advertising and marketing than the revenue those efforts actually bring in. Regularly evaluating the effectiveness of your advertising can be critical to any growth strategy. Check out this Hubspot guide about ROAS with tips on how to calculate it.
• Checkout abandonment rate: The more friction shoppers confront on your site, the more likely they are to leave without making a purchase. Bolt offers a good overview about calculating checkout abandonment rate, and you can learn more about the causes and tactics to avoid checkout abandonment on the Springboard blog.

“Checkout is the make-or-break point for most customers,” according to Airon from BigCommerce. “Creating a checkout experience that is easy and straightforward eliminates friction and frustration. If a shopper has to go through multiple pages, has trouble filling in fields, doesn’t see their preferred payment method, or has to provide redundant information like filling in their address in both a shipping and billing section, they are more likely to abandon their cart, and not complete the transaction.”

Beyond the quantitative metrics, there are some qualitative measures to consider. Answering the following questions can help reveal where your business is positioned on the ecommerce maturity scale:

• Is your view of customer behavior and engagement data inclusive of all channels?
• Are you using customer personas and engagement best practices?
• Have you created a cohesive and connected brand experience across sales channels?
• Are you investing in new tools and technologies to increase your traffic, brand presence, and conversions? And are they working?
• Do your digital experiences and marketing campaigns drive growth? Are you building customer loyalty?

Phew! It’s a lot to consider, but you’ve got this.

“The growth of your business parallels the complexity of both your business and your marketing operations,” says Klaviyo’s Rich Gardner. “But investing in the resources to put all the puzzle pieces–UX optimization, analytics, marketing–together can pay big dividends in the long-run as your business evolves.”

There’s a variety of territories to explore as you set out to uplevel your online brand. On the Springboard blog, we’ve covered a broad mix of marketing strategies designed to boost traffic, offered best practices for social media, SEO, promotional campaigns, email, and automation, tapped into omnichannel trends and tactics, and discovered ways to find unexpected sales drivers. If short for time, for a complete look at the tactics we’ve outlined for scaling your ecommerce business, read our comprehensive growth guide.

“As you evaluate your readiness to expand your ecommerce business, you’ve got to be realistic,” cautions Feedonomics’ Matt Dornfeld. “Agility and a growth mindset are more than handy buzzwords. They are the cultural determinants that can help you decide if your business is ready to invest in proven strategies that drive growth.”

Now it’s time to focus on the specifics of how you can progress through the four ecommerce maturity stages.

4. Applying tactics to stages of the maturity model

Foundational-to-Growth

• Optimize your website’s UX.

If you’re at the foundational stage, you can start by boosting trust with your user (UX). By following some fundamental principles of UX design and UX best practices, you can easily avoid some of the more common trust busters that tend to cause shoppers to pause. Use detailed, high-quality product images, give shoppers detailed product descriptions, and make checking out easy.

• Improve your checkout flow.

Baymard Institute found that brands can gain a 35.26% increase in conversion rate by providing a better checkout design. Learn how to streamline your checkout process by making it as intuitive, transparent, and simple as possible.

• Optimize for SEO.

The higher your site ranks in results for search terms relevant to your business and products, the more traffic and customers you can attract to your website. Search engine optimization is foundational to any marketing and growth strategy, and one of the biggest opportunities to increase shopper traffic and sales.

Growth-to-Optimization

• Check in on your site’s UX.

Regardless of how fast you are growing, there are two important reminders: invest in ongoing testing and consistently check in on the mobile aspects of your site like load time, image rendering. For more insights to optimize your site, read the Baymard Institute report on key UX optimizations to increase conversions on your ecommerce site.

• Leverage social proof by displaying product reviews.

In the era of social proof, featuring positive, authentic reviews from real people on your ecommerce site can have a significant impact on sales. According to data collected by Statista, sites that display ratings and reviews increased conversion rates by as much as 38% for certain product categories. A survey conducted by Power Reviews also found that 98% of consumers feel that “reviews are an essential resource when making purchase decisions.”

Learn how you can display Reviews from Amazon next to the Buy with Prime products on your site to provide a powerful signal to boost customer confidence and brand credibility.

• Streamline fulfillment and inventory management.

When ecommerce businesses scale rapidly, logistical issues with fulfillment and inventory management are common pain points that can affect your operations, sales, and customer experience. Buy with Prime takes the headache out of fulfillment and inventory management.

Buy with Prime orders are fulfilled using Amazon’s Multi-Channel Fulfillment (MCF) service and inventory in Amazon fulfillment centers. If you’re already using Fulfillment by Amazon, you can use one pool of inventory to fulfill orders from multiple sales channels, including Amazon.com, site orders through Buy with Prime, and site orders using your native checkout (which also uses MCF). Amazon handles all of your storage, packing, delivery, and returns for products offering Buy with Prime.

• Learn to A/B test, then keep doing it.

There’s always something you can do to enhance the customer CX on your site and boost conversions. From tweaking layouts and CTA button placement to swapping product images, ongoing A/B testing is the tool that puts your data and benchmarks to use so you can objectively tell which changes to your CX design drive the most conversions.

Testing gives you the insights needed to make informed decisions about messaging, images, colors, fonts, layouts, feature launches, and checkout flows so you can turn shoppers into customers. Check out these five tips to help you use A/B testing to determine the impact that adding Buy with Prime can have on your sales.

Optimization-to-Innovation

• Harness data to find new opportunities.

Consumers expect brands to deliver consistent and personalized interactions, and while there’s no one-size-fits-all approach to developing a cohesive marketing strategy, there are many proven tactics for acquiring and keeping customers.

Before you make any significant investments in a marketing plan, it’s crucial that you know who your customers are, where they are, and how they shop. To help you understand the motivations driving different types of customers that interact with your online brand, our Buy with Prime shopper experience optimization team identified three shopper archetypes based on insights gleaned from studying the behaviors of online shoppers.

“Collect customer information and use that to reduce your marketing costs as much as humanly possible,” says Buy with Prime Sr. Economist Aaron Bodoh-Creed, who recently outlined some of the most important sales drivers for smaller ecommerce businesses to watch for. “Work very hard to optimize the traffic coming to your site and look at the profiles of your return customers to deliver a consistent, personalized message to drive lifetime value.”

• Embrace automation

Charting a path for growth can be a laborious endeavor, and the faster you scale, the more complexity you have to manage. Tapping into automation tools can help you streamline workflows and increase productivity for you and your team, which can save you valuable time and resources.

“Automation can bring a wide variety of time and cost-savings benefits like scaling the volume and types of emails and reallocating resources to more creative outlets,” explains Klaviyo’s Rich Gardner. “Moreover, with today’s smart automation technologies, you can deliver more personalized experiences to customers, which can bolster brand affinity.”

• Invest in omnichannel marketing

Today’s consumers expect a unified brand experience, whether they’re shopping online or in person.

Omnichannel marketing means putting the customer first and leveraging the power of data and personalization to create better user experiences. McKinsey research shows that omnichannel customers shop 1.7 times more than single-channel shoppers.

“People today shop across a range of formats and channels, so merchants need to give them a seamless experience, no matter the channel,” Sharon Gee from Feedonomics adds. “This all starts with merchants ensuring that their catalogs, inventory, and order data are up to date so they can measure performance across channels. Every channel–be it search, social, or marketplaces–has their own set of requirements, best practices, and recommendations for optimized catalog syndication. More often than not, merchants struggle to support this at scale, which makes it ever more important for them to find the right solution partner to achieve their omnichannel marketing goals.”

Complement your paid search, organic social, and email marketing efforts by layering in paid advertising, PR, influencers, and promoted social posts at the top of the funnel. As you build upper-funnel brand awareness, you can begin investing in middle-funnel tactics such as blogs and ebooks to nurture leads through to conversion.

With the social commerce market forecast to grow to $80 billion by 2025, or 5% of total ecommerce, social is a channel ripe with opportunity for businesses at all stages of maturity. Check out these social media best practices to help you build a strategy to tap into the growing social commerce opportunity. Additionally, Social Ads for Buy with Prime is an app that helps you reach engaged shoppers with dynamic ads on Instagram and Facebook that feature the trust of Prime.

For more on effective approaches to omnichannel marketing, read our posts on key tactics for developing an omnichannel marketing strategy and marketing strategies for driving engagement.

How will you move through the ecommerce maturity stages?

By strategically navigating each stage of the ecommerce maturity model, you can establish a strong foundation, achieve sustainable growth, optimize operations, and foster innovation. Always remember that you have to crawl before you can walk, and run before you can take flight.

“Ecommerce maturity is a journey, not a destination,” emphasizes Airon from BigCommerce. “The road might be long, with many ups and downs along the way, but if you stay focused, you can eventually reach your next level of growth. By understanding where you are now, you can identify the right tactics to elevate your business. And just as a journey requires planning, preparation, and perseverance, ecommerce maturity requires a strategic mindset and a commitment to continuous improvement for the benefit of your customers.”

Uplevel your ecommerce business and start climbing the maturity ladder using Buy with Prime. When you’re ready to progress from one level to the next, Buy with Prime will be here to help you on the journey.