How to Improve Ecommerce Conversion Rates

Increase revenue. Learn strategies to improve ecommerce conversion rates here.

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When you open an ecommerce business, one of the primary benchmark metrics of success is your ability to convince customers to make a purchase. While getting site viewership is extremely important, it means very little if you get no transactions from these traffic sources.

As you look at your ratio of transactions, you may see people abandoning their shopping carts during the checkout process or even leaving your site immediately. So what can you as an online retailer do to improve your website and its numbers?

One of the key performance indicators (KPIs) of an ecommerce store is its average ecommerce conversion rate. Although you can measure conversion rates through each stage of your funnel, an average conversion rate can give you an overall sense of your ecommerce store's health. Investigating conversion rate optimization tactics can change the course of your sales significantly. As ecommerce continues to grow to an estimated 21.8% of total global retail sales by 2024, getting a solid foot in the door now is vital.

What is a Conversion Rate?

A conversion rate measures the number of users who perform a desired action. It is usually expressed as a percentage.

The conversion rate is calculated differently depending on what you are trying to achieve, but for ecommerce, a standard average conversion rate measures how many visitors make a purchase. To find this conversion rate, divide the number of visitors who have completed a purchase by the total number of visitors. (Make sure you are comparing the same timeframes.) You will see this same equation used by analytics platforms such as Google Analytics.

And in fact, Google Analytics allows you to set up goal tracking to make conversion rate tracking easier. When looking at these numbers, here are some details to keep in mind.

Understanding Average Conversion Rates

Once you have your average conversion rate, you will want to consider what it says about your sales funnel. While you certainly can compare against the average ecommerce conversion rate, which was 2.12% as of April 2021, that won't give you an accurate picture. It is best to consider your industry, where your visitors are from, and how your site is accessed to see the bigger picture.

Percentage of visitors who turn into customers

To determine how to measure your customer base, consider what you are trying to achieve with your website. Do you want to calculate how many customers add an item to their cart or only count sales? Is your actual goal to get customers to fill out a membership form or buy a subscription? Depending on your sales and marketing goals, it may be entirely inaccurate to compare your conversion rate to the global ecommerce average.

Context matters

When you look at where your sales are coming from, you may notice a difference between devices. While tablets and mobile devices account for 63% of most ecommerce traffic, they only account for 53% of sales. Desktop users tend to spend more time on websites, and while only accounting for 35% of traffic, these customers bear 47% of overall sales conversions. If you have optimized your website to be smartphone-friendly and have neglected your desktop experience, you may want to reconsider. While mobile sales are growing and will continue to be necessary, desktop sales still dwarf mobile sales in terms of revenue.

Another area you can look at is how customers arrive at your site. For example, referrals often have a higher conversion rate at 3.0%, while paid search options like Google Ads are close behind at 2.9%. Surprisingly, social media links are pretty low in comparison at 1.1%. On top of this difference, the country of origin can change conversion rates, with the United States having an average rate of 2.57% and the United Kingdom averages 3.81%. By analyzing where your customers come from, you better understand what methods are working and what may have a better long-term ROI impact.

E-commerce conversion rates by industry

Considering what product categories you fall into is very important when seeing how you stack up against your competition. IRP Commerce is an excellent resource for understanding how you compare, providing comprehensive data and graph breakdowns of conversion rates. Below is a general overview of conversion rates segmented by industry as found on IRP Commerce:

Arts and Crafts - 3.21%

Baby and Child - 0.86%

Cars and Motorcycling - 1.52%

Electrical and Commercial Equipment - 1.82%

Fashion Clothing and Accessories - 2.19%

Food and Drink - 1.76%

Health and Wellbeing - 2.92%

Home Accessories and Giftware - 1.15%

Kitchen and Home Appliances - 2.82%

Pet care - 3.01%

Sports and Recreation - 1.76%

UX and Web Improvements

Once you have your conversion rate goal, you can start looking at ways to improve it. One of the most effective ways you can keep customers on your site is through UX and website optimizations. 57% of customers will abandon a site that takes more than 3 seconds to load, and 80% of those who have a negative website experience will never come back. Overhauling your navigation structure and load times can be a massive boost to your conversion rate.

Simplify navigation

Make sure that customers can easily find what they need on your website. If someone visits your site and gets lost in the shop categories and lists because of poorly designed information architecture, the customer may get frustrated and leave. Consider how your menu appears for those on desktop and mobile, and make sure both processes are accessible and quick.

Optimizing search and filters

It is essential to make sure your search functions and filters work smoothly, especially if your store has many products. Filters should be easy to select and provide plenty of options for your products, while your search function should be robust and easy to find on the page. Filters often fall prey to being hard to use on mobile devices, ensuring the process works well across all platforms.

Apply persuasive copy

Copy that fits your branding can make a massive difference in grabbing a customer's attention. Think about your audience, and find a copywriter that can engage with them in a way that brings your brand to life. Adding personality to your site and creating a persuasive copy can be the difference that helps customers feel connected to your store.

Handle objections upfront

Objections come up often as customers consider purchases, such as "I don't need this" or "This price seems too much." Address these negative thoughts upfront through strong copy or by proving the value of your stock. Alternatively, provide deals such as free shipping after meeting a specific cart value threshold, or offer a coupon code to seal the deal.

Employing AI for Next-Level Personalization

Automation, AI, and chatbots are all becoming a huge part of ecommerce. These technological advances provide an empowering toolkit for website owners, helping tailor each experience to the individual user. A handful of ways that AI and automation can help give you the edge over your competitors, including personalized experiences, better recommendations, and consistent cart experiences.

Better product recommendations and related products

A commonly seen AI application is the customization of product recommendations and suggestions based on a user's purchase or browsing history. By showing the customer items more closely related to what they have been interested in before, they get a more tailored experience. Customers will also be more likely to find things they are interested in buying without as much effort, leading to larger carts.

Personalized search and sorting

Especially popular in clothing and accessory ecommerce stores, providing a powerful personalized search and sorting method can help users find what they need without digging. When used by customers, this has proven to increase conversion rates significantly. One dataset saw customers who used personalized search convert at 4.63%, much higher than the 2.77% average of the website.

Personalized emails

Personalized and segmented emails have huge effects on opens and clicks. A Mailchimp study saw that those who personalized and segmented their emails saw 14.31% higher open rates, 10.64% higher unique opens, and 100.95% higher clicks! Even personalizing an email's subject line means a chance at a 26% higher open rate. You also can set automation to email customers who abandon their carts, reminding them of their potential purchases. By implementing AI that can help you make emails a more personalized experience, you can significantly increase the success of your campaigns.

Category-specific discounts

By offering bulk discounts within specific categories tailored automatically to top-selling areas, you can help move your products much quicker and encourage a higher average order value (AOV). You can use AI and automation to have these discounts apply automatically, speeding up the checkout process and allowing customers to see their savings immediately. This process encourages customers to buy more in your discount categories while helping you profit simultaneously.

Consistent cart experience across platforms

It isn't uncommon that a customer will use both mobile and desktop methods to access your store. Allowing your cart to persist across platforms consistently means that customers will see their saved items no matter where they log in. Persistent cart experiences can even extend to brick and mortar purchases, where your customer can see their past purchases and re-add them to their cart from their phone at a later date.

Geo-location and weather-based personalization

Often overlooked outside of the travel industry, geo-location and weather-based personalization can significantly elevate the customer experience. By offering shipping discounts based on location or warning users of inclement weather, you can find unique ways to connect with your users and push sales. Geo-location data can even automate personalized landing pages to show customers brick and mortar stores near them and customize greetings.

Timed social retargeting

Social retargeting allows you to remind customers of items that they were interested in previously. If the visitor adds an item to their cart, a cookie can track it and later can show them personalized ads with that product. Social retargeting pulls customers back to the cart where they can complete their purchases. It also provides them with new purchase suggestions based on their previous interests.

Enhancing the Post-Purchase Experience

After improving your website UX and implementing AI-driven personalization, you can focus on improving the post-purchase experience. When thinking about the customer and their experience, you have to consider all steps of the buying process. Gone is the linear purchasing model. According to a Gartner study, customer experience drives over two-thirds of customer loyalty, outperforming brand and price combined. There are a few ways you can help improve your post-purchase experience, specifically by enhancing the shipping and handling experience.

Proactive delivery exception handling

Shipping delivery exceptions happen, whether because of an incorrect address, damaged package, or weather problems. When these issues arise, 93% of customers expect a proactive notification explaining the situation. Rather than forcing the customer to call you or the delivery provider, sending them an automated update can help keep them in the loop. Customers will appreciate these updates and will see your company as transparent and quick to address concerns.

Cross-selling and up-selling through shipment tracking

On average, shipment tracking emails are opened at significantly higher rates than marketing emails. It's easy to see why more and more companies are beginning to pollinate their shipment tracking experience with cross-selling and up-selling opportunities.

Ecommerce software like Malomo makes cross-selling and up-selling throughout the post-purchase experience easy and non-invasive through beautiful shipment tracking landing pages and emails.

Conclusion

Each step of your ecommerce experience is vital to raising your overall conversion rate. By providing a seamless and customized experience from landing page through post-purchase, customers will be less likely to abandon their carts and more likely to return to your store. You can improve customer experience through clever design, accessible website features, open communication, and AI implementation. However you choose to enhance your purchasing experience, it's possible to achieve higher ROI for your ecommerce storefront.