The ecommerce market is growing, and it’s growing fast. In 2013, the growth of ecommerce significantly outpaced brick-and-mortar both domestically and worldwide. 2014 kept up this pace of growth, and according to recent projections from eMarketer, this trend is going to continue in the coming years:

  • Worldwide total retail will continue to grow between 5-6% through 2018
  • Worldwide ecommerce will grow at a rate between 13-25%
  • U.S. total retail will grow at a rate around 5.5%
  • U.S. ecommerce will grow at a rate between 11-16.5%

On average, ecommerce retailers are making over $1 million in monthly revenue by the end of year three, not a bad business to be in. This is an interesting data point, but as Avinash Kaushik famously said, “The interesting thing about averages is that they hide the truth very effectively.” So, here’s the first tip about indicators of breakout ecommerce growth: ignore the averages.

So let’s step away from averages and start looking at what separates the best ecommerce companies from the rest.

Indicator #1: Acquire new customers 3.5x faster

Once we get the averages out of the way, we can start looking at performance by quartiles. Top performing companies are Quartile 1, next best are Quartile 2, and so on. What you see here is that out of the gate, top performing ecommerce companies are performing exceptionally well at one of the toughest challenges of any new business — acquiring customers.

By month six, top performing companies are acquiring new customers at a rate 3.5x that of the others. They maintain this advantage throughout the first three years of their business. By the end of year three, this builds into top performers having 196% more total customers than others.

Indicator #2: 36% Higher Average Order Value

Top performing customers are acquiring customers at a faster pace than other companies, they’re also getting those customers to spend more per order. Top performing ecommerce companies have an average order value (AOV) of $102, 36% higher than companies in the lowest quartile.

Indicator #3: 3.5x the Number of Monthly Orders

The third growth indicator is that top quartile companies are generating over three and half times the number of monthly orders by month six. At the end of year three, they have reached over 500,000 all-time orders, while the lower quartiles have yet to break 150,000.

Indicator #4: More loyal customer base

All these repeat purchases mean that by the end of year three top performing companies have a loyal customer base, with the majority of their revenue coming from repeat purchases. The ability to keep customers coming back creates a “renewable resource” for top performing companies.

Indicator #5: $600k in monthly revenue by month six

And what all of these indicators add up to is the bottom line — revenue. By month six, top performing companies are generating $600k in monthly revenue, over 4x that of Quartile 2 companies.

How are they doing it?!

Of course, this is the million dollar question, and it’s a tough one to answer definitively. But we caught up with our friends over at Lerer Hippeau Ventures to see what their theories were. Here are a few areas where they’ve observed best-in-class companies creating a competitive advantage:

  • Creating a near frictionless buying experience. From solving the inconvenience of mattress shopping (Casper) to delivering all the ingredients for a healthy home-cooked meal (Plated), ecommerce companies are building lasting consumer brands by blurring the line between product and service.
  • Building passionate communities. Amazon owns commodities, but best-in-class companies build competitive advantage by engaging with vibrant communities. Bark & Co. has built a strong community around shared interests of dog lovers, just as Chubbies has done with shorts for “bros.” In these companies, customer loyalty fuels growth.
  • Blending content and commerce. Other companies have re-imagined the catalogue and turned it into an editorial experience. Examples of this include Thrillist with Jackthreads and Glossier with Into the Gloss.
  • Offering a “try before you buy” experience. The “What if it’s not like the picture?” hurdle is a barrier that any ecommerce retailer needs to overcome. But some of today’s biggest success stories come from companies who have made overcoming this hurdle a core part of their experience. Warby Parker’s home try on kits for prescription glasses builds returns into the experience. Birchbox reimagined the cosmetic sample, creating an entirely unique buying experience.

Bottom line: Top performing companies excel at two things:

  1. a product and brand experience that customers love and keep coming back for, and
  2. a keen focus on their KPIs, particularly around customer acquisition.

Get more ecommerce benchmark data

In case you’re wondering, all of the data in this blog post comes from our 2015 Ecommerce Growth Benchmark Report. It’s the result of analyzing 200+ ecommerce businesses, 31 million customers, and $25 billion in transactions.

Over the next few months we’re going to continue to mine this data set and uncover the secrets of top-performing ecommerce companies. The 2015 Ecommerce Growth Benchmark is only the first report in this series. Sign up to access the full report here and, if you subscribe to the blog, you’ll automatically be notified when new research is released.


  • Gaurav Rao

    For the who is starting his ecommerce business,is very important to know these growths because these factors play very important role when it comes about one startups. has grown very much on the base of these factors.

  • William Thomas

    I think the article would be great with some idea of what these top performing companies are spending to acquire customers and where that money comes from. It’s great that they ‘create community’ but that doesn’t happen till after a massive ad spend to acquire new customers. Are these fast growth companies that hit 600k/month in 6 months bootstrapped or are they venture funded? Are they profitable or spending venture money to acquire new customers and hoping to make it up in lifetime value? Without some more data there is no actionable content in this post.

    • JanessaLantz

      Hey William. This is the first in a series of benchmark reports. Over the next few months we’re going to try to answer some of the very questions that you outlined. We’ll be digging deeper on things like CLV, ad spend, email marketing, etc. So stay tuned! Hopefully by the end of the year we’ll know a little more about what exactly these top performing companies are doing.

  • Nirav Sheth

    Once begun with its undiagnosed success, eCommerce is certainly growing high. With the purest forms of online stores, the retailers that are both brick-and-mortar and now online are emerging rapidly. It has made the world compact with competitive prices being served ever.

    Without data, it is an opinion only; agreed with you, Janessa! Seeing its growth since now, don’t we think that we should give an eCommerce some additional time to prove?

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    Evolution in digital transformation has passed through several stages, all of these having a number one theme: SEO, contents, merchandising funnel, usability, conversion percentage. Without any doubt, 2017 will be the year within which all of this may be known as into question, focusing mainly on the Client.

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