There are several conversion types. For example, digital marketing conversions count how many people clicked on your online ads. There are also online store conversions. Such stats show how profitable your e-commerce website is.
Today, we will talk about this exact type of conversion, known as the eCommerce conversion rate. We will discuss both good and bad conversion rates for online stores, highlighting eCommerce conversions across different industries and devices. You will also find out the reasons why your conversion rate might be low and how to use tools for eCommerce conversion rate optimization.
After you apply our advice on eCommerce conversion rate optimization, your site will become easy to use for your customers and provide them with a better shopping experience.
What is the eCommerce conversion rate?
Conversion rate (CR) is one of those metrics online retailers should track regularly. The Ecommerce conversion rate tells how many online shop visitors turn into customers. In other words, the eCommerce conversion rate shows the percentage of visitors who actually buy at your e-commerce website. However, it is not so simple.
What is a good eCommerce conversion rate?
The conversion rate in eCommerce depends on many factors. Online stores vary by sector and sell different products. Thus, some of them have a higher CR due to increased product demand. For example, online stores that sell apparel have higher conversion rates than online stores that sell jewelry or beauty products.
To put the record straight, let's find out how eCommerce conversion rates vary across different industries.
Average conversion rates for eCommerce sites by sectors
What is the typical eCommerce conversion rate? Before calculating the conversion rate of your eCommerce website, make sure to take a look at sectors with a higher and lower online conversion rate.
So what online shoppers purchase more often?
Statistics from Adobe Digital Index say that the higher conversion rates are in such sectors as gifts, pharmacies, apparel, footwear, and sports. All these industries have a 3% conversion rate in 2020.
The same report shows that jewelry and cosmetics, home furnishing and decor, automobile, DIY, and tools have a conversion rate below 3%.
So, what is a good conversion rate for an eCommerce store? The answer depends on your sector and the type of goods you are selling. It could be anything between 1-3%.
However, your conversion rate also depends on the traffic source, the buyer's journey stage, and device type. Let's take a closer look at each factor and see the bigger picture.
Ecommerce Conversion Rate by Source
The best performing traffic sources that bring the most eCommerce conversions are:
- Referral (13.5%)
- Email (10.2%)
- Organic (4.1%)
- Direct (3.9%)
Do not expect a high conversion rate from traffic that comes from social media, Facebook, and Google Adwords. All these traffic sources can only bring between 3.1% to 1.7% of the total amount of conversions.
Why? People who saw your Google ad know nothing about your business and the products you sell. Thus, they are less likely to purchase than customers who regularly receive updates from you via email.
These two types of people are at different buyer journey stages and have different motivations to buy something.
Let's find out more about the stages of the buyer's journey and how they differ from each other.
Ecommerce Conversion Rate and buyer's journey stages
Once the buyer sees your advertisement on the Internet, one still has little to no motivation to buy at your e-commerce website. To become a paying customer, one needs to go through awareness, consideration, and decision stages.
- At the awareness stage, a buyer learns about the products and services you sell
- At the consideration stage, one evaluates products or services you offer
- At the decision stage, a buyer chooses your online business among competitors
In a nutshell, when you know about the buyer's journey stages, you can predict where most of your conversion came from and invest in the most performing channel.
But how do devices impact eCommerce conversions?
Ecommerce conversion rate by device
Online shoppers visit your eCommerce website using different devices. You need to know which device results in a higher conversion rate. In this way, you can concentrate your efforts on the type of device that drives conversions.
The main devices on which shoppers access e-commerce sites are desktops, tablets, and smartphones.
While most potential customers may discover your products using mobile devices, they are more likely to purchase a desktop. The mobile eCommerce conversion rate is at 1.82%, the desktop conversion rate is twice as high (3.90%), followed by tablets (3.49%).
Now that you know what eCommerce conversions are and what they consist of, let's move further and learn how you can calculate your eCommerce conversions.
How to measure conversion rates in e-commerce?
To see your e-commerce conversion rates, you need to divide the number of site visitors by the number of orders you received during a particular period. You can calculate the eCommerce conversion rate each month, season, and even year.
Let's imagine your eCommerce website had 1,000 visitors in the last month. During the same period, you received 30 orders. Thus, your conversion rate is 30 divide by 1000 which will be 3.0%
Where can you access eCommerce conversions?
You can see your e-commerce conversion rate in web analytics. Open your Google Analytics profile. Next, go to Conversions, and click on the Goals report. Here, you can see each goal's conversion rate, including Add to cart or Completed purchase. In this section, you can add alternative metrics to narrow down your results.
Open the Analytics section in your Shopify Admin panel and visit Dashboards. Here you will find the Online Store Conversion Rate widget and your sales funnel divided into different stages.
The average conversion rate for a Shopify store was 1.5% in 2019. In May 2020, the average Shopify conversion rate was a little higher at 1.6%.
But what to do if your conversion rate is 1% or even lower? First of all, you need to find out the reason for such a low conversion rate. Then, you need to use eCommerce conversion rate optimization tactics.
While most reasons vary depending on the website, sector, and products, there are typical reasons for low eCommerce conversion rates most retailers ignore. What are they? Let's find it out.
Reasons for a low conversion rate
Now we are going to analyze the typical reasons why your e-commerce website doesn't convert visitors. For this purpose, let's imagine an average shopper, for example, me. I like buying things on the Internet. As a shopper, I want a streamlined buyer's journey. For me, this will mean I can find a product and checkout in 10-15 minutes.
However, only a few sites can offer such a convenient user experience. It is no surprise that most stores have very low conversion rates and require eCommerce conversion optimization.
So, what keeps people away from buying at your e-commerce website? The Baymard Institute study report says that low conversion rates are caused by the following reasons:
Research suggests that 22% of eCommerce sites do not have an intermediate Category Page at the top of their catalog hierarchy. For this reason, site visitors can't properly navigate the eCommerce product catalog.
As a customer, I like to find products within just a few seconds, especially if I know what I'm looking for. However, if the shop I visit has poor navigation, unclear product categories, and no keyword search, I wouldn't give such a website a second look, but open another shop in the next tab. Most shoppers will do the same since it is easier to deal with eCommerce websites that respect your time.
Additional shipping costs
Around 61% of shoppers abandon shopping carts because of high or unexpected shipping costs.
When I visit an eCommerce site to purchase something, I expect to spend a particular sum of money. I add products to a shopping cart with a total order sum in mind. But at the checkout page, when I see additional costs charged for shipping and handling, I will interrupt the checkout process because I didn't expect to pay additional costs.
As a result, customers abandon carts and never return to finish the checkout. That is the way buyer psychology works. We get used to the fact that eCommerce retailers offer free shipping. Thus, shipping costs, even around 5-10 dollars, negatively impact your decision to make a purchase.
Forced customer account creation
The absence of guest checkout makes 34% of e-commerce website visitors abandon their carts.
Not all customers are ready to create a customer account, especially when they shop at your site for the first time. As an online shopper, I respect my time. Besides this, I get used to a streamlined and straightforward buying process.
Thus, if your potential customer already added come products to their cart, but need to create a customer account to place an order, they will look for a more straightforward option at your competitor's store.
Complicated checkout process
According to Baymard's Checkout research study, checkout issues are caused by the following reasons:
- Long and complicated checkout caused 21% of US online shoppers to abandon their orders.
- The average US checkout flow consists of 23.48 form elements and 14,88 form fields, negatively affecting the checkout process.
When I add products to the shopping cart and even agree to pay extra costs for shipping and handling, it does not mean I will make a purchase. Once I begin the checkout process and see many fields to fill in during a complicated checkout, I will interrupt it. Spending some time just filling all these fields simply annoys me as a customer.
Thus, if your eCommerce website has a long and complicated checkout, your potential buyers leave your eCommerce website, negatively impacting your conversion rate.
Shopping cart abandonment
Shopping cart abandonment could be a result of both extra shipping costs and long checkout.
But, there is a third option.
If the website I visit does not have a wishlist on the product page, I will add products I like to the shopping cart.
In such a way, I will not lose these items. When I am ready to make a purchase, I visit this site once again to complete the checkout. The funny thing is that I’m not the only one who does this.
58.6% of US shoppers also have abandoned their shopping carts because they were just browsing and were not ready to buy something.
Unfortunately, most customers forget about products in their abandoned shopping carts. However, even such behavior has its approach.
We just discovered the main issues that cause a low conversion rate for eCommerce. But how can you increase conversions?
Ecommerce conversion rate optimization strategies to try
What methods and tools do you need to apply for eCommerce conversion rate optimization? We suggest the following options as the most effective for conversion optimization.
Use product search optimization
To increase eCommerce conversion rates and help your website visitors find products in several seconds, you have several optimization options to choose from:
- Search bar. The search bar should attract customers' attention to use it and find products more effectively. Thus, we recommend placing it in the top menu. The search box should also provide auto-complete versions for the most popular products and categories. Thus, you eliminate situations where a customer can't find a product because of misspelled words and, consequently, increase sales.
- Search algorithm. To achieve better e-commerce optimization, empower on-site search with Natural Language Processing technology. NLP helps the eCommerce search to understand more complex search queries that include the type of product and its price, color, and size. For example, the user could type "red cocktail dress size 9 under 200 dollars" to the NLP interface and receive relevant information.
Related reading: TOP E-COMMERCE AI TOOLS TO MAKE YOUR ONLINE STORE PROFITABLE IN 2020
Offer free shipping or inform beforehand
To avoid your customers' disappointment with additional shipping costs, you have two optimization options to apply:
Offer your online shop visitors a free shipping option. This type of optimization mainly works for new customers. You can also offer a free shipping option for shoppers whose total order value is more than a predefined sum. You can also add shipping costs to the product cost and say that such products are shipped for free.
Shipping costs calculator
Another eCommerce optimization option is to show shipping costs on the product page. For this purpose, you can integrate a shipping cost calculator. This type of shipping cost optimization automatically calculates shipping prices and shows shopping costs near the total order sum. Such optimization plugins calculate the shipping costs based on shipping destination, product weight or dimensions, cart total, etc.