In the competitive world of online retail, the success of an ecommerce business hinges on its ability to convert website visitors into paying customers. This critical metric, known as the ecommerce conversion rates, determines the effectiveness of your online store and directly impacts your bottom line.
In this blog, we’ll explore what conversion rates are, how to measure them, and most importantly, how to optimize them to boost your ecommerce business’s success.
What is a Conversion Rate?
In e-commerce, a conversion rate specifically pertains to the percentage of website visitors who complete a purchase transaction on your online store. It’s a direct measure of how well your website is able to guide visitors through the sales funnel and turn them into paying customers.
While the mentioned is the common conversion rate for ecommerce, there are often multiple conversion goals that you may want to achieve, and each will have its own conversion rate.
Ecommerce conversion rate is a crucial metric that helps your business measure the effectiveness of your online efforts in turning casual visitors into active customers or users. A higher rate suggests effective website design and marketing, while a lower rate indicates room for improvement.
Average Ecommerce Conversion Rate Benchmark
You may ask, “What is considered a favorable conversion rate for ecommerce?” and “What serves as a noteworthy benchmark to aim for in terms of ecommerce conversion rates?”
According to the latest data, as of May 2023, average conversion rates across ecommerce businesses were at 2.02%. However, this figure can vary significantly based on factors like the nature of the products, the audience demographics, and the effectiveness of the website.
If we narrow down average conversion rates by product, the health and wellness category takes the top spot. See more below.
- Health and wellness: 5.4%
- Arts and crafts: 4.46%
- Kitchen and home appliances: 2.77%
- Pet care: 2.09%
- Sports and recreation: 1.77%
- Fashion clothing and accessories: 1.55%
- Toys, games, and collectibles: 1.51%
- Cars and motorcycling: 1.37%
How Are Ecommerce Conversion Rates Measured?
To calculate ecommerce conversion rate formula, simply divide the number of conversions by the number of visitors.
(%) Website Conversion Rate = (#) conversions / (#) of website sessions
For instance, if your ecommerce site gets 300 visitors in a month and gets 150 sales purchases, your conversion rate would be 150 divided by 300, or 50%.
Example: 50% = 150/300
Factors Affecting Ecommerce Conversion Rates
The conversation rate gives us a clue about how well your business is doing online. There are many things that affect this number, and these are the following:
Traffic Source
Think about where the people visiting your website are coming from. Some may come from search engines like Google because they’re looking for something specific. These folks are more likely to buy something, so the conversion rate might be higher. Others might see ads and click on them. Some people arrive from social media, and they have different reasons for visiting. Then there are those who come directly to a website because they know what they want. All these sources of visitors can lead to different conversion rates.
Price Point
The prices of the things being sold also matter. If something costs a lot, people might take longer to decide if they want it. So, the conversion rate might not be very high. But if things are cheaper, more people might decide to buy them quickly, so the conversion rate could be higher.
Purchase Type
People buy things in different ways. Sometimes they buy something just once. Other times, they sign up for subscriptions, which means they’ll keep paying for something regularly. And then there are some who buy the same thing again and again. These different types of buying show how much a customer is committed.
How to Improve Your Ecommerce Site Conversion Rate
Investing time and resources in ecommerce conversion rate optimization is a strategic move that can yield significant returns. Continuously striving to improve your website’s user experience and addressing pain points can lead to higher conversions and revenue growth.
Boosting your ecommerce conversion rate involves a combination of strategies aimed at enhancing the user experience and minimizing obstacles that prevent visitors from making purchases. Here are some key tactics:
Remember, conversion rate optimization is an ongoing process. Regularly monitor your results, analyze user behavior, and make data-driven adjustments to continue improving your conversion rate.
Optimize for Mobile Devices
Most people use their smartphones a lot, even for shopping. So, your online store should be easy to use on phones. Ensure your website is fully responsive and provides a seamless experience on mobile devices. When people can shop easily on their phones, they’re more likely to buy from you.
Offer Live Chat Help
When people shop online, they often have questions and need help quickly. To make them happy and trust your store more, consider adding a live chat option to your website.
A chat feature can address customer queries in real-time and facilitate the decision-making process. This way, they can get immediate answers to their questions. People like to buy from websites that have this feature because it helps them decide. It’s a great way to make more people buy things from your store. Make sure the people who answer these chats are quick and helpful.
Send Emails for Abandoned Carts
Sometimes, people put things in their online shopping carts but don’t finish buying them. This happens a lot, and it’s a problem for online stores. To fix this, you can send emails to these people reminding them about the things in their cart. When you send these emails within three hours, many people will read them, and some of them will come back to buy. Personalized emails work even better, and they can really help you sell more things.
You can also address common reasons for cart abandonment by optimizing checkout flow, offering guest checkout, and sending abandoned cart recovery emails.
Describe Products Well
When people shop online, they can’t touch or see products in person. That’s why it’s important to describe your products really well. Craft compelling product descriptions and persuasive copy that speaks directly to your target audience. Make sure these copies are interesting and will be helpful information about them.
Use Good Pictures and Videos
Since customers can’t touch or try products online, it’s good to show them lots of pictures and videos. This helps them understand what they’re buying and makes them more likely to buy. Through videos, you can provide a more engaging and informative experience for potential buyers. For images, ensure you give visitors high-quality images from various angles to provide a better understanding of your products.
Show Reviews from Customers
When people want to buy something online, they often read reviews from other customers to know how the service or product was which helps them decide. If you show reviews on your website, it’s an additional credibility for visitors to trust your store and buy from you. Moreover, the reviews on your website can also be used by your previous customers in referring to new potential consumers.
Test Different Web Pages
Sometimes, it’s hard to know what works better on your website on which headline for a page that customers will like more. The solution for this is to have an A or B testing by creating two versions of the page, test different call-to-action (CTA) placements, options, and wording to find what resonates best.
Consequently, to help you in deciding what to use, conducting a survey is a good option by showing the choices of outputs among the team. For its result, you will see which one is the most preferred answer. In this way, you can make your website better and sell more.
Make Shopping Personal and Interesting
Shopping online feels more personal when you show customers things they might like. For example, if they are on the homepage, display the items they want, and if they are subscribed to your email marketing, send the customer a discount code that can direct them to the application.
Additionally, when you send emails to customers, you can input suggestions about other items they might like based on what they bought before. Most people like these recommendations, especially if they suit their interest or if they’re enticing enough for them to buy. As a result, people might buy more than they intended, which can boost your ecommerce conversion rate and sales.
Build Trust
It’s really important for customers to trust your store because if they don’t trust you, they simply won’t buy from you. So, to build trust, be honest and clear in giving them information about the items on your website. This makes your website look credible and it lessens misunderstandings among the consumers. If customers have other concerns that are not present on the website, you should address them well. When customers trust you, they’re more likely to buy things from your store and can also refer to their friends or family.
Tweak Your Checkout Process
Streamline your checkout process to reduce friction and increase completion rates by eliminating unnecessary steps and simplifying navigation. Encouraging customers to create an account is fine, but it’s also better to provide choices for your consumers by allowing a “Guest Checkout” since some customers prefer a quick checkout process without the need to create an account.
Track the Right KPIs
Monitor key performance indicators like bounce rate, exit rate, click-through rate, and average session duration to gain insights into user behavior. Being able to track these things can help you to be aware of the things that you can adjust or improve. This helps you to maintain a good ecommerce conversation rate in the long run.
Tools That Can Help Improve Ecommerce Conversion Rates
These are some tools that can aid in tracking and optimizing your ecommerce conversion rate:
- Google Analytics – Provides comprehensive website analytics, including conversion tracking
- BigCommerce Analytics – Designed specifically for ecommerce businesses, offering detailed insights into online store performance
- HotJar – Heatmaps and visitor recordings provide insights into user behavior
- Quantcast Measure – Offers audience insights and analytics to inform your optimization efforts
Optimizing Conversion Rates is Key for Ecommerce Success
Improving your ecommerce conversion rate is a multifaceted endeavor that involves understanding your audience, refining your user experience, and employing data-driven strategies. By implementing the right tactics, tools, continuously testing, and staying responsive to customer needs, you can create a high-converting ecommerce website that not only attracts visitors but also turns them into loyal customers, contributing to the long-term success of your online business.
Frequently Asked Questions (FAQs) about Ecommerce Conversion Rates
Q1: How can I measure my ecommerce conversion rate?
Conversion rate is calculated by dividing the number of conversions by the total number of website visitors and then multiplying by 100. For example, if you had 200 conversions from 10,000 visitors, your conversion rate would be 2%.
Q2: What’s a good benchmark for ecommerce conversion rates?
Ecommerce conversion rates can vary by industry, but a healthy benchmark is around 2-3%. However, top-performing ecommerce websites can achieve rates as high as 10%.
Q3: How often should I update my ecommerce website to optimize conversion rates?
Regular updates are essential to keep your website fresh and engaging. Conduct A/B tests, analyze performance metrics, and make necessary changes to your website at least every few months.
Q4: Is it better to focus on getting more traffic or improving conversion rates?
Both aspects are important, but focusing solely on increasing traffic without optimizing for conversions can lead to missed opportunities. Strive for a balance between attracting quality traffic and maximizing conversion rates.
Q5: What role does mobile optimization play in boosting conversion rates?
Mobile optimization is crucial, as a significant portion of online shoppers use mobile devices. Ensure your website is responsive and user-friendly on all screen sizes for a seamless shopping experience.
Q6: How can I encourage repeat purchases from existing customers?
Implement a loyalty program, offer exclusive discounts, and engage with customers through personalized email campaigns. Building a strong relationship with existing customers can lead to higher repeat purchase rates.
Creating a personalized and successful shopping experience for customers is vital for ecommerce businesses. Streamline operations, enhance customer experience, and focus on innovation with experts on your team!
If you’re searching for quality, cost-efficient, and professional services, we at Cloud Development is here to assist. We can help you improve your business processes to help achieve positive customer satisfaction. Consult with us today!
