Introduction: Understanding eCommerce Conversion Rates
Ecommerce conversion rates are a critical metric to understand and optimize in order to grow your online business. A conversion happens when a site visitor takes a desired action, such as making a purchase or signing up for a newsletter. The conversion rate is the percentage of website visitors who perform a conversion.
For example, if you have 1,000 visitors to your online store over the course of a month and 50 of those visitors make a purchase, then your conversion rate for that month would be 5% (50 purchases / 1,000 visitors). Tracking and analyzing your conversion rates is key to uncovering opportunities and improving your store's performance. Some key aspects to understand around ecommerce conversion rates include:
Calculating Conversion Rates
There are a few formulas you can use to calculate conversion rates:
- Purchase conversion rate: Number of orders / Number of unique visitors
- Abandonment rate: Number of abandoned carts / Number of site visitors who add a product to their cart
- Email sign-up rate: Email sign ups / Unique visitors
Luckily, many ecommerce platforms like Shopify and BigCommerce will actually track and display your conversion rates for you inside your admin dashboard. You can also use Google Analytics.
Why Conversion Rates Matter
Monitoring your ecommerce conversion rates provides valuable insights into your customer journey and experience on your site. If you see a declining conversion rate month-over-month, that signals there may be UX issues turning customers away.
Likewise, an increasing conversion rate indicates your site optimizations and marketing tactics are working to turn more shoppers into buyers. This drives more revenue for your business. Understanding the factors influencing your conversion rates allows you to double down on what works to maximize growth.
Increasing Ecommerce Conversion Rates
Now that we’ve covered the fundamentals, let’s explore tips and strategies for improving your ecommerce conversion rates...
How can conversion rate be increased?
Conversion rate optimization (CRO) is a crucial component of any successful ecommerce strategy. With so much competition online, it's vital to continually test and refine your website to turn more visitors into paying customers.
Here are 13 proven tactics to increase ecommerce conversion rates:
1. Conduct A/B and multivariate testing
A/B testing different versions of your site allows you to make data-backed decisions on what converts best. Test elements like copy, headlines, images, calls-to-action, page layouts, checkout flows and more. Multivariate testing combines multiple variables for insights into interaction effects.
2. Strengthen your value proposition
Clearly convey your unique value, competitive advantages, and benefits to shoppers. Craft messaging focused on their desires and highlight differentiators.
3. Optimize navigation and site search
Minimize clicks to purchase and remove friction in finding products. Improve search relevancy and auto-suggestions. Site search analytics reveals opportunities.
4. Enhance product pages
Compelling descriptions, specs, images, videos, reviews and Q&As build trust and address buyer concerns. Ensure mobile responsiveness.
5. Reduce cart abandonment
Understand reasons for abandoned carts with exit surveys and analytics. Identify pain points across checkout process. Apply principles of persuasion and influence. Offer incentives.
6. Retarget site visitors
Remarket to users who left without converting. Tailored ads keep your brand top of mind and nudge them to return. Effective for cart abandoners.
7. Urgency and scarcity
Countdown timers, limited inventory alerts and expiring promotions incentivize quicker purchases. However, avoid being overly aggressive.
8. Social proof
Showcases of buyer activity increases conversion. Testimonials, customer reviews, best selling badges and other forms of social validation build trust.
9. Ensure site speed
Improved site speed directly correlates to higher revenue. Use page speed tools to diagnose issues. Optimize images, enable compression, efficient caching, responsive mobile design, and modern web development practices.
10. Personalization
Tailor content and product recommendations to individual user segments and contexts. Welcome new visitors differently from return customers. Email, on-site messages and ads can be personalized.
11. Offer free shipping
One of the most effective promotional strategies. Lower minimum order thresholds expand eligible purchases. Can be tied to larger discount percentage rates.
12. Email collection and marketing
Email converts ~40x more than social media. Offer opt-in incentives on site exit. Send targeted, personalized, and relevant communications guiding visitors down the funnel. Avoid oversending.
13. Testing and optimization mindset
CRO is an ongoing process, not a one-off project. Continually experiment with incremental changes to uncover revenue growth opportunities. Appoint team members to own optimization.
Implementing even a handful of these tips can significantly move the needle on your ecommerce site conversion rates. Analyze your analytics to identify weak points in the customer journey, then leverage CRO best practices to turn more shoppers into delighted customers.
What is a high conversion rate for ecommerce?
Industry Benchmarks
On average, ecommerce websites see conversion rates between 1-4%. These figures tend to be lower than the overall average across industries of 3.65%. However, conversion benchmarks can vary significantly depending on factors like:
- Industry - Fashion and apparel sites tend to convert better than consumer electronics.
- Size of Business - Larger companies with more traffic generally have lower conversion rates.
- Type of Offering - Commodities like office supplies convert better than big ticket purchases.
So rather than relying on industry averages alone, it's best to track your own conversion rate over time to determine an appropriate goal.
Setting Realistic Goals
When first starting out or undergoing a major website redesign, aim for a 10-20% increase in conversion quarter-over-quarter. As you collect more data, you can set goals based on your site's past performance during peak seasons.
Other key metrics beyond conversion rate to factor into your targets include:
- Average Order Value
- Repeat Purchase Rate
- Profit Margin
Optimizing for conversion rate alone may neglect bigger opportunities to maximize revenue and profitability. Adopt a holistic approach across key performance indicators when setting benchmarks.
Key Takeaways
- Average ecommerce conversion rates range from 1-4%
- Set goals based on your own site's historical performance
- Look beyond conversion rate to revenue and profitability metrics when setting benchmarks
By tracking meaningful KPIs over time and setting incremental performance goals, ecommerce sites can consistently improve conversions.
How can I increase my ad conversion rate?
Track success with conversion tracking
Implementing conversion tracking is key to understanding what's working and what's not. By tracking conversions through Google Ads, you can see which ads and keywords are driving conversions. This allows you to double down on high performing areas and improve low performing ones.
For example, if a particular ad group has a high CTR but a low conversion rate, you can try testing new ad copy or landing pages to better resonate with those high-intent visitors. Taking advantage of conversion tracking provides the data you need to make smart optimization decisions.
Use specific keywords for better conversion rates
Generic broad match keywords may drive high traffic volume but often result in low quality visitors. On the other hand, more specific and descriptive keywords allow you to reach users further down the purchase funnel.
For example, someone searching for "red running shoes" is much more likely to convert than someone simply searching for "shoes." Use negative keywords to weed out irrelevant traffic and focus spending on visitors demonstrating clear purchase intent through their queries.
Apply negative keywords
While relevant traffic is important, it's just as crucial to keep irrelevant traffic away from your ads. Negative keywords prevent your ads from showing for searches that don't indicate buyer intent for your offerings.
For example, if you sell home office furniture, adding negative keywords like “kids” and “outdoor” helps avoid wasting budget on visitors less likely to purchase. Pay close attention to search query reports to discover irrelevant terms to add as negatives.
Analyze search queries for greater relevancy
Google Ads’ search terms report provides insight into the actual queries triggering your ads. Analyze this frequently to discover new relevant keywords to target as well as irrelevant terms to add as negative keywords.
You may find high performing queries that aren’t currently targeted. Or you may uncover odd, unrelated queries wasting budget. Mining search queries aids optimization and improves account relevancy.
Include pricing in ads
Having pricing information in your ads allows you to garner interest from deal-seekers more likely to purchase. When relevant, incorporate pricing details like discounts, sales, price ranges, or dollar amounts into your headlines and descriptions.
Visitors specifically searching for special offers are hot leads since they have indicated intent to buy under the right conditions. Your ads with pricing details can capture their attention.
How do I increase my conversion rate on Shopify?
Talk to your customers
Connecting directly with customers through surveys, interviews, and focus groups can provide invaluable insights into pain points and desires. Ask open-ended questions to uncover conversion obstacles or motivators. Leverage findings to guide tests and personalize experiences.
Define your website's goals
Clearly outline macro and micro conversion goals. This provides focus for priotization and measurement. Goals may include email signups, purchases, content downloads, etc. Align design and content to steer visitors to those endpoints.
Review your site's friction points
Examine analytics for drop-off pages and identify friction like long forms, too many options, unclear navigation. Run tests simplifying processes, reducing fields, clarifying language, adding graphics to guide.
Test and enhance your value proposition
Run A/B tests of page copy and visuals to determine which resonate best. Refine messages highlighting customer pain points and your solution. Ensure consistency across channels.
Audit your technical setup
Fast load speeds, mobile optimization, clear calls-to-action, quality content improve conversions. Perform audits checking site health, broken links, accessibility. Implement technical best practices continually.
Calculating Your eCommerce Conversion Rate with Tools and Calculators
Defining Conversions in eCommerce
Conversions in ecommerce represent the completion of desired actions by users on a site, such as:
- Product views
- Add-to-carts
- Checkouts
- Purchases
Tracking these actions allows you to measure user engagement at each stage of the sales funnel. This enables identifying opportunities to reduce fallout and boost conversions.
For example, a high product view to add-to-cart fallout may indicate issues with pricing, product information, or the checkout process. Fixing these can directly lift conversions.
Implementing Tracking with eCommerce Conversion Rate Google Analytics
To leverage Google Analytics for accurate conversion tracking:
- Set up goals to match important conversions like add-to-carts, purchases etc. This enables monitoring performance.
- Enable ecommerce tracking to record key data. This includes information like:
- Implement event tracking for actions like wishlisting products or starting checkouts.
- Filter bot traffic which may skew conversion rates.
Proper setup is crucial for reliable data. Best practices include:
- Funnel mapping your goals during planning for suitable tracking.
- Regularly validating data through random order checks or statistically significant sampling to catch discrepancies.
- Comparing conversion rates across platforms like web, mobile etc. to catch issues early.
- Granting limited analytics access to prevent accidental setup changes affecting data integrity.
Using an Ecommerce Conversion Rate Calculator: Key Formulas
Common formulas used to calculate ecommerce conversion rate include:
Purchase Conversion Rate
Number of Purchases / Number of Site Sessions * 100
This reveals the percentage of visits leading to a purchase - a key business health metric.
Cart Abandonment Rate
Number of Abandoned Carts / Number of Add-to-Carts * 100
The higher this rate, the more revenue is lost from shoppers not completing checkout after adding items.
Checkout Abandonment Rate
Number of Abandoned Checkouts / Number of Started Checkouts * 100
Similar to the cart abandonment rate, a high value here signals issues in the checkout process negatively impacting conversions.
Smart use of above formulas and Google Analytics facilitates identifying underperformance across the sales funnel. Common remedies like friction reduction, incentives etc. can then directly boost conversions.
Benchmarking Your Conversion Rate Performance Against Best Converting eCommerce Websites
Average Conversion Rates by Industry
Ecommerce conversion rates vary significantly across industries based on a number of factors, but here are some general benchmarks:
- Fashion and Accessories: Average conversion rate of 2-3%. Categories like shoes and purses tend to convert higher.
- Furniture and Home Goods: 1-1.5% average conversion rate due to considered purchases. Higher priced items bring rates down.
- Electronics: Around 1.5-2% conversion rate on average. Commoditized categories can be lower while high involvement purchases are higher.
- Toys and Hobby: 3-4% average conversion as impulse buys are more common. Niche hobby stores can be much higher.
- Sporting Goods: 2-3% overall conversion rate. Specialty stores (fishing, golf etc) convert better than general sporting goods.
Of course, factors like traffic source, geo-targeting, promotions and more can influence conversion rate significantly within any given vertical. But these benchmarks serve as a good starting point for comparisons.
Assessing Your Business Against Best Converting eCommerce Websites
When benchmarking your conversion rate, here are some tips:
- Compare similar traffic sources (i.e. organic vs paid vs referral traffic). Conversion rates can vary drastically across channels.
- Factor in geo-targeting and localization. Regional performance differences are common. Global sites tend to convert lower.
- Consider product pricing and purchase cycle. Higher priced items or considered purchases negatively impact rates.
- Assess influence of promotions and sales events skewing metrics over shorter windows.
- Ensure accurate tracking with goals set up properly in your analytics platform. Exclude test/internal traffic.
- Monitor rate changes over longer periods to identify positive/negative trends and outliers. Quarter over quarter assessments remove seasonality.
Doing apples-to-apples comparisons and normalizing external factors allows you to make an informed assessment of conversion performance and areas needing optimization.
Leading eCommerce Sites' Conversion Rates
Top ecommerce companies often publish benchmark reports highlighting their site conversion rates:
- Amazon: Reported 2.9% conversion rate across its site as of Q4 2021. Rates vary significantly by category and campaign.
- Wayfair: Over 4% average conversion rate thanks to heavy personalization and on-site search optimization.
- Chewy: Conversion rate greater than 3% benchmark for their pet supplies niche.
- Etsy: Approximately 3% conversion rate given the handmade and artisanal nature of their products.
While these rates are impressive, they aren't achievable for most businesses without similar investments in UX design, merchandising, logistics and personalization. However, these leading sites demonstrate the revenue growth potential of even marginal conversion rate improvements at scale.
Key Areas Impacting Conversion Rates
Simple and Intuitive Site Navigation
A clean, easy-to-use navigation menu is essential for guiding customers to the products and information they need. Cluttered menus with confusing categories or hard-to-find links will frustrate shoppers and increase bounce rates. Consider streamlining your main navigation to the most important pages, using drop-downs sparingly for secondary options, and simplifying your category structures. Testing different menu layouts using A/B testing software can reveal opportunities to optimize.
Compelling Product Pages
Your product pages make or break the sale - they need to clearly showcase your items with quality images, detailed descriptions, key specifications, and calls-to-action to add to cart. Providing zoom capability, alternate views, real customer photos, and comparison tools can significantly lift conversions. Keep page copy succinct, highlight USPs, and use trust badges to reassure visitors.
Seamless Mobile Experience
With over 50% of ecommerce traffic coming from mobile, delivering an intuitive user experience on smartphones and tablets is mandatory. Use responsive web design to ensure site elements resize and reorder seamlessly across devices. Check forms and CTAs are tap-friendly, minimize pinch/zoom needs, and confirm fast mobile load speeds. If conversions lag on mobiles, investigate further using device-based analytics.
Targeted On-Site Search
On-site search is a major conversion accelerator if optimized effectively. Ensure search results display closely matching products through intelligent algorithms and human-readable page titles/descriptions. Show category refinements, match misspellings, and provide 'no results' suggestions to guide visitors. Use search data to identify high-demand terms without product matches to fill portfolio gaps.
Customer Account Signup
Encouraging account creation early in the buyer journey allows for segmented targeting and personalized recommendations later onsite. Offer new subscribers immediate incentives like discounts or free shipping through pop-ups and sticky bars. Reduce signup friction with 1-click social login options. Confirm password requirements are not overly strict to avoid drop-off.
Trusted Security and Payment
Lack of trust in payment and personal data handling leads over two-thirds of shoppers to abandon purchases. Combat this through clear trust badges, customer reassurance messaging, and easy-to-find policies. Allow guest checkouts and offer multiple payment methods like PayPal. Use a security seal from a well-known provider. Restrict free shipping or discounts to registered accounts to encourage more signups.
Post-Purchase Customer Engagement
The sales process shouldn't end after customers hit 'buy' - following up with personalized messages and content builds loyalty for future transactions. Send behavior-based cart abandonment email reminders to recover lost sales. Establish an onboarding flow for new buyers guiding them to related purchases. Share curated content and new arrivals matched to purchase history. Surprise rewards, special coupons, and VIP sales can turn one-time buyers into lifelong brand advocates.
Optimizing Conversion Rates Through CRO: An Ecommerce CRO Checklist
CRO eCommerce Meaning and Overview
Conversion rate optimization (CRO) is the systematic process of increasing the percentage of website visitors who complete a desired action, such as making a purchase. For ecommerce businesses, the conversion rate specifically refers to the percentage of total site visitors that end up making a purchase or adding an item to their cart.
Implementing an effective ecommerce CRO strategy is crucial for boosting profits without heavy additional investment in driving more traffic to your site. Even marginal improvements in conversion rate can translate to significant revenue gains over time.
Understanding your customer journey and identifying friction points is key. CRO allows you to run experiments on various elements of your site to determine which changes persuade more visitors to convert. This data-driven approach takes the guesswork out of decision making.
CRO Tools and Methodologies for Ecommerce
To implement a successful ecommerce CRO strategy, leveraging the right set of tools and analytics is essential. Here are some that provide great value:
- A/B Testing Platform: Properly structured A/B testing allows you to test changes against a control to quantify impact. Some popular platforms are Google Optimize, Optimizely, and VWO.
- Heatmaps and Session Recordings: Understand how customers interact with your site and where they face difficulties in the shopping journey. Hotjar, Crazyegg, and Inspectlet offer useful heatmaps and recordings.
- Goal Tracking in Google Analytics: Accurately measure micro and macro conversions, understand your conversion funnel better, uncover additional optimization opportunities.
In terms of methodology, the CRO process follows three main steps iteratively:
- Identify issues and hypothesize solutions
- Test potential fixes with A/B tests
- Analyze results and scale winners
Following this structured framework prevents relying solely on assumptions and gut feel.
Optimization Opportunities and Tactics from an Ecommerce CRO Checklist
Some high impact areas of an ecommerce site that can be optimized through CRO experiments:
Landing Pages
- Simplify layout and reduce distractions
- Improve value proposition messaging
- Add social proof elements
- Shorten form fields
Product Pages
- Enhance visuals showing product usage
- Reduce friction in finding variations
- Feature scarcity or urgency messaging
- Spotlight unique value proposition
Shopping Cart and Checkout
- Reduce number of form fields
- Offer guest checkout option
- Display delivery timelines accurately
- Provide multiple payment options
Website Copy
- Use benefit-driven headlines
- Reduce generic marketing jargon
- Answer common customer questions/objections
- Highlight unique selling propositions
Site Search
- Expand synonym coverage
- Promote high intent search queries
- Remove irrelevant results
- Guide searchers to optimal navigation pathways
By methodically experimenting with various ecommerce CRO tactics over time using analytics and testing tools, you can engage customers effectively and increase conversion rates substantially.
Continuously Monitoring Performance with Ecommerce Conversion Rate Google Analytics
Set Up Goals and Events Tracking
To continuously monitor ecommerce conversion rates over time, the first critical step is setting up proper tracking in Google Analytics. We need to establish clear goals that align to our key desired outcomes, whether that is product purchases, email signups, or content downloads. Defining these goals will allow Google Analytics to calculate goal conversion rates and determine how effective our site is at capturing users through the most important funnels.
Additionally, implementing event tracking for key user interactions provides visibility into important micro-conversions that impact macro-goals. For ecommerce, essential events to track include product adds to cart, checkouts initiated, account creations, product views, and newsletter signups. Capturing these user actions helps uncover conversion rate bottlenecks earlier in the funnel.
With strategic goals and event tracking established, we have the foundation for monitoring performance through actionable and insightful KPIs.
Configure Ecommerce Reports and Dashboards
Google Analytics contains powerful, customizable reports tailored for assessing ecommerce conversion rates and sales funnels. Under the Conversions section, enable Ecommerce reports to analyze product performance, track checkout funnels, attribute sales data, and optimize your digital storefront.
Useful preset reports include:
- Shopping Behavior - Explore macro user flows from Product Views to Add to Carts to Product Purchases
- Checkout Behavior - Isolate checkout funnel performance to identify cart abandonment pain points
- Sales Performance - Evaluate product-level and category-level conversion rates and revenue contribution
Additionally, create custom Analytics dashboards containing goal completion rates, top conversion paths, revenue charts, and other KPI widgets to monitor daily. Dashboard snapshots enable effortless periodic analysis to catch conversion rate changes early.
Act on Insights to Improve Site Performance
While Analytics provides the valuable data, taking action on the insights is the critical driver behind conversion rate lift. We must set up processes for regularly reviewing reports and dashboards to analyze trends and identify optimization opportunities.
If product views are high but add to cart rates are low, that signifies issues with our product pages. Falling email capture rates on blog posts could indicate content formatting problems. About page bounce rates increasing may point to bad messaging. We need to let the data guide where enhancements will make the biggest impact.
By continuously monitoring Analytics and responding with targeted site improvements, we create a feedback loop for systematically moving conversion rates upward. Over time, the compounding positive impact can transform performance and profitability. But without disciplined processes for tracking, analyzing, and optimizing, key insights get overlooked and gains left unrealized.
Wrapping Up
With strategic goal planning, comprehensive ecommerce reporting, and commitment to data-driven optimization - businesses can tap into the immense power of Google Analytics to drive steady ecommerce conversion gains. The key is continuously monitoring KPIs to unlock insights, paired with processes to quickly apply learning to site experience. Over time, the compounding impact generates exponential returns through substantially higher online conversion rates and revenue.
Key Takeaways and Next Steps for Ecommerce Conversion Rate Optimization
Recap of Key Concepts Covered
Elevating ecommerce conversion rates requires focusing on customer experience, building trust to drive repeat purchases, and constantly testing new ideas. Key takeaways include:
- Calculate conversion rates using Google Analytics to establish benchmarks and track improvements
- Focus on high-impact areas of the conversion funnel like product pages and checkout
- Test changing page layouts, designs, content, calls-to-action, customer flows
- Personalize content to connect with customers and meet their needs
- Optimize speed and mobile experience for improved engagement
Essential Next Steps
With the foundations covered, what actions should ecommerce merchants prioritize next?
- Conduct a full conversion rate audit - Identify weak points creating bottlenecks
- Speak to customers directly - Phone, email, and chat interactions reveal pain points
- Prioritize mobile optimization - Most traffic is mobile so streamline experience
- Establish an optimization roadmap - Outline testing plan and focus areas
- Invest in tools and talent - Leverage capabilities for experiment velocity
The path to improved conversion encompasses strategy, technology, and team capabilities. Establishing processes to continually experiment based on insights and data is key to staying ahead.
Conclusion
With focus, persistence, and the right approach, significant conversion rate improvements are within reach. Ecommerce is a dynamic space requiring constant optimization. Leverage the strategies covered to delight customers, stay competitive, and boost revenues over the long-term.