One of the major indicators of your business’s profitability is your conversion rate.
When an online shopper clicks on a pop-up on your website to become one of your email subscribers, that is a conversion.
Essentially, a conversion occurs when someone takes a desired action on your ecommerce site.
Since a good ecommerce conversion rate is essential for your ecommerce store’s success, one of the most important questions to ask is, what is a good ecommerce conversion rate?
In this article, we will look at what a good ecommerce conversion rate looks like and how you can optimize your ecommerce website to increase your conversion rate.
An ecommerce conversion rate is a ratio of the total number of shoppers who purchased something on your website compared to your total number of visitors.
So, if you have 100 people out of 1000 website visitors make a purchase, your ecommerce conversion rate will be a percentage of the total number of people who made a buying decision divided by the total number of website visitors.
With our example above, the ecommerce conversion rate will be 100/1000 = 0.1= 10%.
A conversion in ecommerce is typically any completed action taken on an ecommerce site. This could be a completed sale or a newsletter signup.
Here’s how to calculate your ecommerce conversion rate:
Conversion Rate = (Total no. of conversions/ Total no. of visitors) x 100
If you have a total conversion of 50 and a total number of visitors of 1000, your ecommerce conversion rate will be expressed as: (50/2000) x 100 = 2.5%.
When calculating your conversion rate, you want to ensure the timeframe calculated is consistent. So, if you’re calculating for a year, you want to make sure both the number of conversions and visitors are for a year.
So, you’re selling your products or services and have calculated your ecommerce conversion rate. How do you know what a good ecommerce conversion rate should be?
First, it is important to note that conversion rates (CVR) vary across various categories and industries. So, you want to find out what the average conversion rate for your industry is.
However, generally, a good ecommerce conversion rate falls between 2-4%.
As we already established, your ecommerce conversion rate will differ depending on your industry.
Here are the global average conversion rates for some industries as of the first quarter of 2023:
Various factors can affect the conversion rate of your ecommerce store. An ecommerce store’s conversion rate may not always be driven by the store’s quality. Several other factors may come into play.
Here are some factors that can affect an ecommerce conversion rate benchmark:
Traffic sources can be a major factor that affects eCommerce conversion rate benchmarks. So, sites that rely on traffic from existing customers may have more traffic than sites that get a bulk of their traffic from blog posts. Keep in mind that this doesn’t make one traffic source less potent than the other.
The purchase type for your ecommerce can also affect your conversion rate. For example, you may see lower conversion rates if you’re operating a subscription model as opposed to one-time purchases. This is because a subscription store may have fewer visits from returning customers. In addition, consumers may need more time to think about their decision before making a commitment to subscribe.
The more expensive your product is, the lower your conversion rate. If a customer needs to buy an expensive product, it will require more consideration than if the customer is trying to purchase a cheaper product. This is because it requires a larger portion of their income.
One factor that can affect the conversion rate of ecommerce stores especially between countries is the type of market. Well-established markets with mature brands will typically have higher conversion rates than markets where ecommerce is still trying to penetrate.
Ecommerce stores in countries that do not have a robust logistics and distribution network may struggle to meet high demands, leading to lower conversion rates. On the other hand, ecommerce stores that have robust logistics will typically have a higher conversion rate.
These factors and more can contribute to the increase or decrease of a store’s conversion rate. However, it can still be helpful to consider the overall average in your industry and country to help you better understand your performance.
Perhaps you’ve compared your ecommerce conversion rate with your industry and are falling short. How can you boost your ecommerce conversion rate? There are various optimization strategies you can implement in your store. However, you want to follow a proper repeatable process.
First, you want to carry out research to identify areas of improvement. You can use tools like Google Analytics to gather data, user interviews, surveys, and tests.
Based on the data collected, you can then come up with a hypothesis and decide on what changes need to be made.
Next, prioritize the changes that will increase conversion rate and directly have the most impact on your ecommerce store.
Next, you want to use A/B testing to find out the changes that work best and lastly analyze your results and make necessary changes.
Here are some strategies you can implement to boost your conversion rate and top up sales on your ecommerce site:
One thing that can turn potential customers away and affect your conversion rate is a product image with poor quality. Since your customers won’t handle your product before buying it, the only other way to convince customers to buy your product is to help them experience it through high-quality images and videos.
Ensure the images show your product from various angles and zoom in on key features.
Product videos are also a powerful way to show customers exactly how your product works and how it can fit into their lives.
Social proof like customer reviews and testimonials can serve as a major push in a customer’s buying decision. Social proof tells customers if your product does what it claims to do.
A customer is likely to buy a product with positive reviews as it reassures the customer that they are making the right decision. Studies show that customers are more likely to trust a customer review just as much as they would a personal recommendation from a friend or family member.
If you’re looking to push your ecommerce conversion rate, adding positive reviews to your product page is one effective way to do that. You can encourage your customers to drop a review after making a purchase via email or social media.
Today, mobile ecommerce has risen to the lamplight with $2.2 trillion in sales and accounting for up to 60% of total ecommerce sales around the world.
With this in mind, you want to provide a seamless shopping experience for your mobile customers.
Ensure your ecommerce site is mobile responsive with easy navigation, fast load times, a simple checkout process including mobile payment options, and a clear call to action (CTA).
Offering free and fast shipping can be a major game changer for your ecommerce business. Most consumers will buy a product if they don’t have to pay for shipping and still get their items delivered on time. So, with free and fast shipping, you are likely to have more customers make a purchase from your store.
While free shipping isn’t the cheapest option, it can bring about a significant ROI.
You can set a minimum order amount for free shipping and incentivize your customers to spend a little more to offset free shipping costs.
The checkout phase is the final part of a customer’s shopping journey. By simplifying the process and making little changes to your checkout process, you can increase the conversion rate and avoid losing out on sales.
First, you want to avoid unnecessary fields. While you may want to collect as much information from your customers, adding lengthy fields can slow down the process and make your customers impatient.
You can allow guest checkout for first-time customers to avoid losing customers who are ready to buy.
Adding a progress bar is also one way to optimize your checkout process. A progress bar gives customers a sense of accomplishment and builds a positive feeling towards completing their purchase.
Lastly, you want to include as many payment options and methods. You can consider carrying out a survey to find out the most convenient payment methods.
Your conversion rate is one metric that directly impacts the growth of your ecommerce store. It is important to keep an eye on it by setting benchmarks and measuring your conversion rate side by side with them. You can use tools like Google Analytics to track your conversion rate, collect valuable data, and improve your conversion rate over time.