Ecommerce conversion rate is like the speedometer in your car.
It tells you how quickly you are going (efficiency) and by simple calculation you’ll know how soon you’ll be there.
Ok, so how does this help me?
Ecommerce conversion rate is your calculated efficiency (like the speed above), or the percentage of people that have actually bought something from your online store.
The conversion rate helps you see how well your store is doing and how long it takes to sell your products.
Ecommerce conversion can also be any targeted action like signing up your email, adding product to chart, referrals and so on.
How to Calculate Ecommerce Conversion Rate
The ecommerce conversion rate is calculated like this:
So if you had 400 visitors this month and 50 sales your conversion rate was 12.5%.
The higher the number you get the more people are buying from you, which means you are more effective at selling.
No matter what percentage you got on the equation above you can always make an ecommerce conversion optimization and get more sales.
What is the Average Ecommerce Conversion Rate?
Average ecommerce conversion rate equalized between all markets can go from 1.3% to 2.5%.
Some markets like Arts and Crafts can go up to 3.9%, but that’s usually the exception.
Many times on the internet you will find online stores that claim to have average ecommerce conversion rate of 2.5% to 3.0%. That is a bit over-enthusiastic in our experience.
How to Increase Conversion Rate Ecommerce?
Conversion rate can be improved in different ways depending on the ecommerce store you got and the needs of your customers.
We do that by a process called Conversion Rate Optimization or CRO, CRO is our weapon for transforming website visitors into customers.
Important thing to remember concerning ecommerce is that when customers visit your store they are in most cases in the 2nd or 3rd phase of buying decision.
Let me explain, customers go through 4 different phases when they make buying decisions. In marketing this is called the AIDA model or Attention, Interest, Desire, Action.
The vast majority of ecommerce customers are in the 2nd and 3rd phase. Meaning they are already aware of the product.
They have come to your store to either find out more about the product (2nd phase) or to choose what brand and color they want (3rd phase).
You should be aware of this when making any changes to your website. You should always optimize your website for these phases of buying and increase the number of conversions.
This will improve your conversion rate significantly because you will be targeting the right customers.
Here are some e-commerce conversion rate optimization tips:
Improve Website Speed
Over 53% of users will abandon your website if it doesn’t load in 3 seconds!
This climbs up to 79% abandonment if doesen’t load in 6 seconds!
So the faster your website loads the better conversion you will get out of it.
Optimal loading time is between 1-2 seconds. To achieve this you can make few changes like reducing image size and use a responsive web design.
This is GTmetrix.com speed test on Amazon.com and as you can see the loading time is 1.1 seconds.
Implementing responsive web design will ensure that your ecommerce store is as functional on mobile devices as it is on desktop computers.
Also, if you have high bounce rate, slow website loading speed is one of the major errors you should check for.
When the loading speed of a website is low users become impatient and bounce to another website.
This can happen in any phase but many times it is also happening in the checkout process and results in cart abandonment.
Use High-Quality Product Images
Good product images are vital because they give us the feeling of looking at a product in real life.
For example if we go to an ecommerce shop that sells sneakers shoes we will be a lot more engaged and interested if we see high resolution, well-lit images of sneakers at different angles.
It will be close to the experience we would get if we went to the closest sport shop. Almost like holding them in our hands.
Also having a video that showcases them on a real human foot and walking around a bit with them will inform us even better of how they look when worn.
So having a high-quality product images and videos (as well as detailed product descriptions) is crucial to increasing your conversion rate.
Optimize Website Navigation
Clear and easy-to-use navigation menu can help customers find what they’re looking for quickly reducing the risk of losing them to frustration, thus increasing the chances of a conversion.
Try things like:
- Use an easy and intuitive design for your store.
- Cut on the number of steps the user has to do to buy your product.
- When the user goes into the buying part don’t distract him with unnecessary notifications.
- Have an option for the customer to buy your product without signing up for a membership in your shop.
- Always have in mind the user experience of your customers and remove obstacles to making a purchasing decision
Also, using heat maps can be very effective to see where your customers are clicking and what they are spending most time on.
Paired with SEO analytics you will get a good insight of how your content and design influence customers’ behavior.
Offer Fewer Options
Offering fewer options in one category can boost conversions due to the Paradox of choice theory.
This theory developed by psychologist Barry Schwartz claims that having fewer products available boosts sales.
If you have fewer available computer keyboards to choose from you will probably end up buying one.
On the other hand, if you have to choose from dozen different keyboards you will likely not buy because the choice will overwhelm you.
This all is because too many options make decision fatigue and analysis paralysis.
There was a famous jam jars experiment where results for conversion were compared for a period when there were just 6 jam jar brands to pick from and another period where there were 24 jars of jam available.
The 24 jars got more looks from the customers, but customers ended up buying 27% more when there was a reduced choice of just 6 jam jars.
So reducing the total number of choices ironically may increase conversions, meaning it is a form of Conversion Rate Optimization (CRO)
Use FOMO
FOMO or Fear OF Missing Out is a very effective marketing strategy that is connected to lose aversion.
Offering limited-time promotions, discounts or low stock notifications creates a sense of urgency and scarcity of the product that motivates the customer to make a quick purchase.
FOMO works great for selling products in bundles like “buy one get one free” where you additionally make the offer time limited.
Usually customers will buy the product and give the second product to a friend or a relative.
Have Excellent Customer Service
In many markets that are oversaturated the winning businesses are not the ones offering the best price, but the ones offering the best customer support.
Best advice I have gotten over the years is: treat every information you got about your business like a customer support issue.
It’s best to have 24/7 customer support that will answer complaints and fix issues within 2 hours time frame.
Great way to do this is to have a Live Chat at your website that is prominently positioned and easily reachable.
It’s also smart to have a pop-up asking the customer to leave their mail before entering chat dialogue so you can follow up later with an email.
Good customer support builds trust and increases customer satisfaction driving the conversion rate up.
Also having good customer support usually translates into good customer reviews.
Meaning that from the number of visitors that shop online at the moment there is always a small percent that will experience some problem.
If you help these shoppers, they are more likely to fill up their shoping cart and become a happy customers, thus increasing conversion.
Conclusion
Running an ecommerce store is a serious business (pun intended).
It requires constantly testing new approaches to be more efficient.
Many times, the best results come not from some major changes that you apply to your store design or functionality, but from a subtle shift in the thinking and interacting with your customers.
We gave you a few ideas on how to do an ecommerce conversion rate optimization, feel free to implement what you like and ignore the rest. And if you have some strategy of your own, please feel free to share it in the comments.
If you need help with your ecommerce conversions please contact us right away. We run the best web marketing agency in Montreal and we can surely help you!
