Conversion rate optimization is important if you want visitors to your store to turn into customers.
It takes a lot of time and effort to get an e-commerce business started and off the ground.
But most e-commerce businesses fail to live up to expectations or end up not achieving the financial and personal goals of the owners.
Success for e-commerce businesses at a very basic level comes down to attracting a lot of people to your store in the first place, but then also converting that traffic into paying customers.
We’ve previously discussed the impact of search engine optimization (e-commerce SEO) on increasing traffic to your store.
This article is your definitive guide to conversion rate optimization. It looks at how to convert that extra site traffic into paying customers so you are not leaving money on the table by letting customers leave without buying.
What is Conversion Rate Optimization for E-Commerce?
Conversion rate optimization has become a big topic as online commerce has grown over the last 20 years.
Broadly speaking, conversion rate optimization refers to ensuring that you convert as many visitors from your site into paying customers as possible. As such, it looks to incrementally improve all the various factors of e-commerce that lead to a buying decision from customers.
Conversion rate optimization is essential to ensure that you are able to convert all the traffic your e-commerce store gets into paying customers, to make your business a success.
The factors that lead to customers buying can be many and there is a point of diminishing returns where continuing incremental improvements will lead to minimal returns.
However, there are a number of more fundamental factors and areas of e-commerce that typically get overlooked or ignored completely by business owners.
Conversion rate optimization is achieved by focusing on these factors so you can move the needle materially and change a lacklustre store into a highly successful one.
How to Measure Conversion Rate
In order to achieve conversion rate optimization, it is first important to define and properly calculate the e-commerce conversion rate itself so you know how you currently score, and so you can track improvement over time. Measuring the e-commerce conversion rate is what will let you know if you are making headway with optimizing your conversion rate.
In order to measure e-commerce conversion rate for your e-commerce business, you first need to define the goal. For many businesses this will be to get customers, i.e. to increase sales.
In this instance, the goal for e-commerce conversion rate is sales. This is the most common and most tangible of goals for e-commerce businesses. For other businesses, it may be getting email sign ups or engagement with content for example.
Once you have identified this, you can refer to Google Analytics to ensure you have set this up properly so that you can track your conversion rate accurately for all activity on your e-commerce store.
Source: Google Analytics
Only those customers who have successfully completed a purchase will be shown the ‘thank you’ page and so every time it fires up, it signifies a sale to your Google Analytics i.e. a conversion.
As such conversion rate is all visitors to your site who achieve a conversion event (i.e. make a purchase), as a percentage of all visitors to your e-commerce site.
What Does a "Good" E-Commerce Conversion Rate Look Like for E-Commerce?
Now that you have Google Analytics set up to capture traffic to your site as well conversions when sales happen, it is worthwhile assessing what a good e-commerce conversion rate looks like.
This will give you a better sense of the level of conversion rate optimization necessary for your business to make you competitive.
It is also important so as to benchmark you against what you can likely expect and what you should aim for.
A lot of research has been done around the area of conversion rates for e-commerce businesses in the past at a general level. Globally, the conversion rate for e-commerce businesses is 2.86%, or approximately 3%.
Clearly to some extent the e-commerce conversion rate will vary depending on the niche that you operate in. Selling high-end luxury fashion is quite different to selling more commodity products such as disposable household goods like toothbrush, razors, or day-to-day skin products.
The business model you operate will also affect the e-commerce conversion rate in your business.
For someone buying a fashion item, especially one that is priced higher due to the brand and quality of products, the level of conversion is likely to be lower as it may be a one-off purchase done with extra disposable income.
This is very different to a business that has a subscription type business model for products that are required on repeat, such as, for example, razors. In this instance, it is an essential product that customers will return to buy over and over again, and typically, will be set up to buy on a repeat basis month on month. This dynamic will clearly increase the e-commerce conversion rate.
The other element that is often overlooked but important when it comes to e-commerce conversion rates relating to what your store sells is the variety of products on offer.
Stores that have a wider range of products for sale are likely to have a lower conversion rate as the site will attract a wide pool of visitors with only some looking to buy.
Conversely, if your site is very specific in terms of what it sells and the niche it serves, the e-commerce conversion rate should be higher.
People visit a site to answer a specific question or to solve a particular problem. If your store is very focused on a niche, and that is what a customer has searched to get to you, the chances are higher that their visit will result in a sale, and this will naturally increase your e-commerce conversion rate.
As such, it is important to try and understand where your business fits in and not to get too overwhelmed or disappointed if your business doesn’t hit the widely regarded conversion rates across e-commerce.
Breaking down the e-commerce conversion rate identified earlier of 2.86% by niche (to the extent that data is available) suggests the following trends in conversion rates for e-commerce businesses.
As you can see, there are some variances to average e-commerce conversion rates across niches.
The additional layering to apply on top of this, as I mentioned earlier, is to recognise if you sell products in one niche or in varying niches. If the latter, you can expect the conversion rate to be on the lower side.
This is important context to know as you are trying to achieve e-commerce conversion rate optimization for your business so that the target you are aiming for is realistic for your type of business.
Tactics to Improve Conversion Rate Optimization
Given we have identified what conversation rate optimization is, how to measure conversation rate, and what targets you should be aiming for in your niche, its time to focus on actions you can take today to start to improve the conversation rate for your e-commerce business.
The speed with which your site loads is one of the key factors that can impact conversion rate optimization right at the beginning of the buying process.
In fact, there is a direct correlation between page time load and the bounce rate (i.e. the percentage of people who leave your site without taking an action).
Source: Google / SOASTA Research 2017
Sites that load slow don’t even give customers a chance to go further as people have shorter attention spans online and are likely to leave much quicker out of frustration.
The aim is to have a site that loads quickly so that the customer can easily search around your store for what they want, and so the process of buying is made as easy as possible.
Have a look below at the speed tests for one of the worlds best known e-commerce brands to see how it fares, and what you should be aiming for. A site load time around 3 seconds or less is considered very good.
Optimising the speed of your site is achievable whether you are a big company or small. With GTmetrix you can identify problem areas that are slowing down your website.
Large images will obviously load much slower than smaller sized images. Check the size requirements on your e-commerce platform and conform to their size guidelines. If an image doesn’t have to be large, don’t make it large.
Also, if images are loaded all at once when a page is called, this can take extra time, as the site will only fully show once all images have been loaded. However, by lazy loading images you can instruct your browser to load images only when they are scrolled to on a page.
You can test your e-commerce website through GTmetrix to see how long it takes to load, and also what the problem areas are so you can go about fixing them. In so doing, you will make a material impact on your conversion rate optimization.
Optimize for Mobile
Smartphones in their most commercial form have been around now for about 13 years with the launch of the Apple iPhone in June 2007. In that time we have become more dependent on them for everything in our daily lives, including shopping.
E-commerce sales via mobile (also known as M-Commerce) represented about 28% of all e-commerce sales in 2019 in the US. M-Commerce is expected to be 45% of all US e-commerce sales by 2024.
But it is only when you look at the global numbers that you can truly see the impact of M-Commerce. In 2017, M-Commerce accounted for 59% of global e-commerce market share and this is expected to increase to 73% of global e-commerce market share by mobile by 2021.
As such, a significant amount of your customer traffic and conversions are likely being lost if your site is not optimised for mobile.
Review the following site that is ideally optimised for mobile making the purchasing process easy, and fostering trust from the very outset of the interaction.
Given the trend for more online sales on mobile, it’s worth the time and effort to ensure this is optimised for your site, and in any case, this is not something that should take very long, or cost you very much to do.
Tell Your Story
Many e-commerce sites have been put together without much thought and this shows in the results when these businesses struggle to make sales, or to build a sustainable business.
Customers shop around and so will be exposed to a whole range of online stores, gaining familiarity with styles and designs.
One thing that stands out for most successful small and medium-sized e-commerce stores is the back story for why the store was created in the first place and what it represents, in addition to the vision for the business from the founders.
It may seem odd that something so intangible can affect your store’s conversion rate optimization, but it is a signal to visitors to your site that allows for associations to be made with your brand.
This information, typically displayed the ‘about us’ section helps visitors to familiarise themselves with the business and brand and can go a long way to building trust.
With Pura Vida Bracelets, the founders clearly explain how they came about the idea of selling the bracelets as well as why this was important to them.
The founders go on to explain how they are giving back to the communities they work with which is a noble initiative that should resonate with many customers visiting their site.
Activity such as this is likely to lead to more conversions as it humanises the business and the founders and allows people to connect with their motivations and their cause, thus positioning the business in the ‘familiar stranger’ territory. This brings people a huge step closer to buying because of the familiarity and trust this breeds.
Be careful though as your motivations and story for creating the business needs to be truthful and authentic otherwise it has the opposite effect, and in any case, is likely not the kind of business you want to create.
Kistler Rods is a customized fishing rod company that demonstrates a very personal story. People who have been searching for customer fishing rods in Google and who came across this page have already shown an interest and intent to buy, which is why they landed on the page. The story only helps them to connect with Trey and the team and is more of an incentive to buy.
Having a real backstory helps keep people on the page, keeps the business memorable, and influences people to take action and buy.
Allow Customers to Find your Products
Once on site, customers need to be able to find your products with ease and to be able to filter based on relevant criteria.
Once you have a customer on your site, it is your job to make the process of buying for them as easy as possible. This is the essence of conversion rate optimization – encouraging visitors to buy.
This is why you should approach your site as a customer would. What would they want to see? What would they want to do? How easy is the site to navigate to find what you want?
Having clear and compact menus is an essential part of ensuring your site is organised.
This organisation needs to ensure showing too much does not clutter the site, but is structured in such a way as to allow people to logically navigate into different product categories that are titled obviously and correctly.
Skinnydip London sells accessories, clothing and lifestyle products and has a wide range of products but has neatly organised the products it sells into a number of discernible categories. Note that these categories would be obvious and recognisable to the target market that would be visiting this site.
The business has also included filtering that allows customers to refine their search to better find what they want. This is important as customers visit websites to answer a question or solve a particular problem. The quicker they can do this, the better.
Having filtering on your site, especially if you have a larger product range, makes the process of buying all the easier, which will optimize your e-commerce conversion rate.
Focus on Product Descriptions
It is usually easy to tell apart a business that has been put together quickly with the intention of selling as much of anything as quickly as possible vs. a business where the founders care about what they sell and about the customer experience.
One way to identify this is through product descriptions.
Not only do the product descriptions need to be accurate and address the key questions customers are likely to have about the product, but the descriptions also need to be well written, engaging and real.
This means clear, succinct language with the right grammar and correct spelling. Even though these points seem obvious, many people make errors that are unforgivable and can turn customers off immediately.
LIVINCOOL is a lifestyle brand that has clearly paid attention to their product descriptions and added personality whilst ensuring the details are clear enough to give a potential customer everything they need in order to buy.
You should also look towards optimising product descriptions for the right keywords. The correct keywords should be identified at the outset and used appropriately throughout your site, and especially in product descriptions to ensure your search engine optimization (e-commerce SEO) is strong and works in your favour to direct more traffic to your site via Google and other search engines.
In executing on the above not only does your store get more overall traffic, but also you can convert that traffic better leading to better conversion rate optimization.
High Quality Images & Videos
Customers use the images and videos on your site as another subconscious (and even conscious) cue as to the quality and credibility of your overall business.
If you cannot make the effort to take high quality images, and include multiple images per product to give the customer a better sense of the product, then what does that say about how you care for your business or customers?
Another thing to be aware of is to ensure you have some consistency in branding in your images and videos. This could be the same or similar background, or at least a similar theme so that it is evident that all images and videos are branded to the style of your business.
This kind of attention to detail plays well with customers and again, solidifies your brand and shows that you care. It also plays an important role in increasing conversions.
Crown & Paw is a fun-loving custom pet goods brand allowing pet lovers to express their affection for their beloved pets. You can see below the consistency and quality with which they present product images.
When loading images onto your site you should be mindful of size guidelines for your platform. You should choose the size that keeps the quality intact without potentially slowing down your site because of its size.
Videos can be a little trickier to get right so you should make a call as to if you really think they are needed. If you decide to use videos you should aim for the quality you see on larger, well-known brands. This is what customers will expect.
It’s important to do your homework when it comes to pricing because you can be assured that your customers will have done theirs.
Pricing can be one of the instant factors that turn customers away from your store compromising your conversion rate optimization initiatives. As such, it’s important to get your pricing right.
Being unreasonably priced in your market for your products is an easy way to turn people off from buying and getting them to leave your site.
If you have done your research properly, you will know of other competitors in the market and where they position themselves with regards pricing.
You should also know the differences between your products and theirs and also be familiar with differences in quality of the products, and their features. This information should be able to help inform you regarding pricing for your products.
If you believe your products are better than the market and should command a premium that’s fine. But then you need to be prepared to justify and stand behind your products.
Some people take the view of being the cheapest in their niche in an attempt to secure volume and grab market share, perhaps at the expense of profit. That is fine and is your call how you run and operate your business.
The key point here is to know the price sensitivity of customers in your niche. As long as you are aware of this then you will have a clear approach.
Provide Social Proof with Customer Feedback
Customer feedback has been proven to encourage conversions over and over again. Over 90% of people read reviews before purchasing. That’s pretty much everyone visiting your site.
Given the evolution of e-commerce, it is inexcusable for an e-commerce business not to show customer feedback, though some still don’t. In striving for conversion rate optimization, customer feedback can be a great ally if used correctly.
Reviews have an important role in providing social proof to customers to encourage them to buy.
In real life you have sales assistants whose job it is to handle objections and influence the sale. Online, a big part of this responsibility is handled by customer feedback so it is important you have quantity and quality of reviews on your site, including fresh and recent reviews all the time.
ILIA is a skincare and beauty brand who clearly understand the importance of customer feedback and showcase these prominently with their products. If you look at the dates, you can see the high frequency with which they are able to collect reviews on an ongoing basis.
However, it is not enough to have only have reviews on your own site. The issue of fake reviews and the manipulation of reviews have become prevalent over recent years.
Though most businesses try very hard to ensure they only collect authentic reviews, it is the few bad apples that ruin this for all. This includes people faking as customers to write fake reviews, and some businesses manipulating reviews to make themselves look good.
The UK’s Competition and Markets Authority (CMA) estimates fake reviews potentially influence £23bn of UK customer spending each year. For larger economies such as the USA and China, this number is likely to be much higher.
The issue of fake and manipulated reviews has customers worried and concerned leading them to question the authenticity of reviews on a company’s own website. After all, customers are parting with their hard-earned cash and so to get a product that is not what it was made out to be has left customers wary.
This has resulted in greater scepticism of reviews on stores’ own sites. It’s a question of trust at the end of the day.
As such, in addition to showcasing customer feedback on your own site, it is highly recommended to also show reviews on an independent third-party site.
This gives customers confidence and can reinvigorate conversions at a key stage of the buying process. Over time, independent reviews will further help strengthen your brand which will have a profound impact on your overall conversion rate optimization strategies.
This is the problem we have been focused on addressing at Syntellio. You can get started with us today for free so that you can show transparency and honesty with customers, leading to an increase in your credibility, and your conversions.
Have Promotion Codes
Customers want a bargain, irrespective of the brand or price point you operate at.
Offering promo codes are a great example of how you can do this without compromising your profitability too much.
The logic is that you’re converting customers who perhaps otherwise would not have bought. So although the margin you achieve on each customer will be lower, the chances are you would not have had that customer without running a promotion in the first place.
The Skinny Food Co. is a business that sells healthy food products. You can see how the business makes good use of promo codes in order to get customers hooked.
There are other strategies you can use alongside promo codes in order to increase the overall order value.
You can consider upselling or cross selling. This is typically done at point of checkout and can be used as a method to further sell to a customer once you’re convinced they are ready to buy.
You ought to be careful though as you don’t want to turn customers off with inappropriate upsells or cross sells such that they end up not buying at all.
Clearly Show Contact Information
You should realise by now that 90% of getting a customer to buy is getting them to trust you. This is the basis of all transactional relations.
With e-commerce this is heightened even more as they cannot see your store, they cannot speak to you face to face, and you may even be operating from a city or country outside their own.
As such the barriers for trust are already quite high. Fortunately, given the history of e-commerce, familiarity has led to some level of trust, which is why e-commerce has continued to grow over the last 20 years.
However, there are still things you can do, and should do on your site to further consolidate that trust.
And they don’t shy away from providing further details around how customers can contact them.
This is relatively simple to do and doesn’t take time yet many businesses still fail to do this. If you’re concerned that you’ll be flooded with calls, its possible to outsource this function to a reputable third-party who can triage these calls on your behalf, albeit with some training.
If you’re an e-commerce business and care about customer service, then setting up this information and making it clearly available is important to foster trust, which will go a long way to increasing your conversions.
Have Clear Call To Actions
Optimizing conversions on your site is about letting customers know what they should do next. You have an idea about the customer journey your customers should take but that is not always clear to them.
Conversion rate optimization can be achieved when the journey you envisage for your customers is the journey that they also take successfully.
This is why your site needs clear call to actions (CTAs) throughout to help guide customers on the actions they need to take at every step.
For e-commerce businesses, the clearest call to actions you want to achieve are for customers to add products to the basket, and then go to checkout.
Amazon does this best with their site and these CTAs have been prominent and clear on their site.
It is best to keep CTAs as simple and clear as possible. Pay attention to button size, colour and the text used. These seemingly insignificant details have been the subject of intense debate and testing over the years to see what converts best.
We would suggest keeping the text as ‘add to basket’ and ‘proceed to checkout’ and ‘buy now’. These are all terms that have been a/b tested in depth and there is no need to change them. Customers are already familiar with them.
Make the Checkout Process Easy
Following on from above, particular emphasis should be given to making the checkout process as easy as possible.
If customers have got to the point of checkout then there is clear intent to buy in most cases. Your focus at this point ought to be to help smooth the journey from here to eventual purchase.
One way you can do this is by allowing customers to checkout as guests. One of the most frustrating things when a customer gets to checkout is to ask them to create an account from scratch.
This is clearly counterproductive to the customer journey and mindset they are already in. What you’re actually doing is stopping them from buying and distracting them to do something else.
In order to facilitate conversion rate optimization for your e-commerce store, allow customers to check out as guests. They are on the way to becoming your customers and so you can foster a longer relationship with them then but there is no point in jeopardizing it before it has even started.
Mielle Organics which provides organic hair and skincare, allows for express checkout via certain payment options, ensuring customers can buy quickly.
When customers get to checkout, they want to know how much is left to do and how long the checkout process will take. Customers expect the buying process to be super quick.
Think of it as the equivalent for customers waiting to buy in a store in real life. Nobody likes queues and delays. The same is true online.
A progress bar is a really good way to show customers how close they are to completing the purchase. This can help motivate them to continue to complete the purchase.
New Zealand based Pure Nature which provides skin care, personal care and home crafting goods does this well on their checkout page so they know what to expect.
The purchase progress bar lets customers know what to expect. It also gives them a promise that after a couple more steps they will have completed the purchase.
Analyze Cart Abandonment
It will be inevitable that even at this stage, some customers will decide not to buy and will leave your page. This is known as cart abandonment and is something that needs to be understood for your business.
E-Commerce brands lose $4.6 trillion in sales revenue each year due to cart abandonment. That’s a huge number and clearly impacts conversion rate optimization.
In fact, it is estimated that the global average rate of cart abandonment is 75.6%, that is three quarters of people get to cart and then decide not to buy.
As such, there are things you need to do to understand what is causing this for your business.
The easiest is to track those users who have got to this stage and to send them an email to understand the reasons they abandoned their cart.
There could be a fundamental underlying reason you’re missing that is harming your conversions and your business. Getting feedback in this way will really help to address this.
UGMONK shows how you can be personal with your abandoned cart email in order to entice customers back.
Beyond this you should also review the customer journey to cart and beyond and try this out with friends or family to see if something breaks down along the way.
You’ll be surprised that despite hours of testing yourself, you may have overlooked something simple that is leading to a loss of sales every single day.
Cart abandonment is an untapped area for a significant increase in the e-commerce conversion rate and should be given serious attention.
Offer Free Shipping
It comes as no surprise that customers hate to pay for shipping. This is a behaviour that is being engrained from the larger brands out there that understands paying for shipping is a real impediment to the process of buying. Amazon with its Prime membership takes advantage of this even though customers have to pay a monthly fee for Prime.
Offering free shipping can not only address this but can also go a long way towards being a key factor in helping people buy.
Everlane is a good example of a store in the US that offers free shipping to its US based customers.
This is a logistical issue that you need to think about in your business. There are now service providers who can efficiently handle shipping for you economically.
Having longer term relationships with these service providers can mean you are not paying for every delivery, rather you are paying for an ongoing service which is much cheaper in the long run, and serves the purpose of removing yet another obstacle for your customers so they can buy.
Have a Product Returns Policy
Customers want to have security when they buy. One area of this is product returns.
This is clearly more important in certain areas than in others i.e. fashion. Nonetheless, having a clear and concise product return policy is going to be essential if you want to optimize conversions and increase sales.
This is important for retailers as well given 57% said dealing with returns has a negative impact on the day to day running of their business.
LoveShackFancy is a fashion brand inspired by vintage finds. It makes its policy and process very clear for customers for returns.
It is the responsibility of the e-commerce store to provide this security.
The basic way in which you can do this is by having an SSL certificate on your site that signifies security for taking payments. This is also a sign that it is difficult to hack the business for its data.
Modest clothing fashion brand, NeeSee’s Dresses does this clearly and it inspires confidence from the outset.
In addition to this you should ensure other security measures are taken to make hacking difficult. This includes having hard to identify site passwords that are not stored physically, but rather using a secure password service provider such as LastPass and 1Password.
To allay customer concerns, highlight badges that demonstrate payment security prominently on your site.
There are some badges that give greater comfort than others as illustrated below.
These can help to let customers know that you take security and their personal data seriously and that actions have been taken to keep their data secure.
All these initiatives give customers confidence to go ahead and buy from you, hence, improving your e-commerce conversion rate.
Conversion rate optimization is important if you run an e-commerce business. Not paying attention to this means you’re losing money every single day.
Having your site set up to make sure you measure conversion rate optimization is the first step to see where you stand compared to your competitors.
Though industry data varies per niche, you should aim for between 1-2% for conversion rate for your business.
In order to improve your conversion rate, the steps highlighted above will help you optimize your business to ensure you are growing your business in the best way possible.
Let us know in the comments what steps you are likely to implement for your business, and if there are any others that have worked for you that we have missed.