Everything you need to know about ecommerce conversion rate optimization
The way shoppers consider and make their purchases has evolved as access to online retail has expanded. According to Forbes, 24% of purchases are expected to be made online by 2026, with ecommerce sales forecast to grow by more than 10% this year.
Ecommerce looks different for each vendor, with some taking an online-only approach and others using multiple channels to capture potential customers wherever they are. Regardless, selling goods over the internet has become a priority for companies looking to remain relevant and accessible to their customers, with 74% of Americans making at least one online purchase in 2021, up from prior years.
For ecommerce retailers, conversions are crucial — that is, seeing site visitors turn into paying customers. Marketing and advertising strategies do their part to increase site traffic and brand awareness, but once these leads are directed to a website and tempted to make a purchase, companies need to pull out all the stops to convince them to pay and convert into customers.
That’s where ecommerce conversion rate and its optimization come into play. This vital metric can help sellers understand their place in the market more clearly and work to improve their sales outcomes by applying best practices to their marketing strategy, website experience, and purchasing workflows. But with so many factors at play, it can be difficult to know where to start when optimizing your ecommerce store’s conversion rate.
In this article, we’ll take a closer look at what ecommerce conversion rate optimization is and explain how your business can improve its sales figures by paying attention to it. To do this, we’ll cover:
- What ecommerce conversion rate optimization is
- Calculating ecommerce conversion rate
- Ecommerce conversion rate goals
- Ecommerce conversion rate optimization strategies
What is ecommerce conversion rate optimization?
Ecommerce conversion rate optimization (CRO) is a marketing tactic used to increase the percentage of website visitors who take a particular action by making strategic improvements to your site. It’s a holistic approach taken by an ecommerce business to provide a seamless shopping experience that reduces barriers to sales and increases conversions or purchases.
The rate of conversion is a metric that measures the number of website visitors against the number of actual purchases made on the website over a period of time. Optimizing this metric can help businesses make the most of traffic to their website and maximize their return on investment with marketing campaigns.
Keep in mind conversions can take different forms for different businesses. Generally, this is a purchase or sale of a product or service. But depending on your goal, a conversion can also be when a person adds a product to a cart, signs up to an email list, or shares a post on social media. The point is to message effectively to a prospective customer, or lead, to get them to take a desired action.
Conversion goals are typically part of broader operational business objectives. Key performance indicators (KPIs) are used to monitor the success of a business strategy, campaign, or product more tangibly. CRO efforts usually drive specific KPIs. A team with a KPI for a set sales revenue goal may want to increase purchases on their website. Or a marketing team may run a campaign to get current customers to share their experiences with the brand and measure success by the number of mentions they get on social media.
Calculating ecommerce conversion rate
While CRO can be variable, there are straightforward ways of calculating it as a core metric for your business. Of course, you can’t improve on something without having a sense of where things stand to begin with. That’s why you’ll want to measure your ecommerce conversion rate at the start to determine if or where you need to make improvements.
Fortunately, there’s a clear formula for how to calculate this:
(Conversions / visitors) x 100 = conversion rate
For example, let’s say you define conversions as the number of people who purchase an item on your website. In a given period of one day, you have 20 conversions (i.e., sales). On that same day, 2,000 people visited your website. The conversion rate formula would look like this:
(20 / 2,000) x 100 = 1
In other words, you’re converting 1% of all your website visitors into customers.
You can change the period of time you’re including in your measurements as long as you’re consistent with both the number of conversions and the number of visitors being pulled from the same timeframe.
You can also apply this to other types of conversions. If you run a campaign with a goal of email sign-ups and you have 6,000 impressions and 500 sign-ups, the formula would look like this:
(500 / 6,000) x 100 = 8.33
If you think the figures in our examples seem low, you’re not wrong. While conversion rates will vary because of how they are defined and what is being calculated, an average conversion rate often comes in around 2–5% for products. The rate is closer to 9% for service offerings.
Part of that difference is service sales usually only have a one- or two-step checkout process, while ecommerce stores may have four or five. The more barriers to a sale you have, the less likely you are to convert a prospect into a customer. But more on that later — along with some easy-to-implement optimization strategies.
Having this information can help you establish a baseline for any campaign’s performance and determine areas for improvement as needed. Now you can focus on setting goals and defining what it means for you to optimize your own conversion rates.
Ecommerce conversion rate goals
Now that we know how to calculate conversion rate, it’s important to know what our target rate should be. Every business is different, but understanding general trends in the ecommerce market can help you better align your targets and performance with competitors.
The average ecommerce conversion rate is 3.68%. Generally speaking, existing businesses should be able to perform with close to a 3% conversion rate, while new stores still establishing their web-based marketing should expect closer to 1–2%.
In our previous example, the business with the 1% conversion rate on its website is below the industry average, which means the company would benefit from establishing a different target rate and employing strategies to make up the difference.
The average email sign-up rate is between 2–5% as well. The variability lies partly in how quick and easy it is to sign up for the email itself. Too many fields or complex interfaces complicate the process and increase bounce rates, or the number of people who leave your site and fail to convert.
Ecommerce conversion rate optimization strategies
With an understanding of what conversion rates are, how to calculate them, and what to aim for, you can look into ways to improve your outcomes. If your conversion rate is lower than it should be, there’s no need to worry. Instead, you can do an audit of your site and marketing strategies to get more conversions out of the visitors you’re already attracting regularly.
To do this, we’re going to take a look at seven key CRO strategies to help you improve your results. Starting with higher level themes, we’ll move into individual tactics and provide examples you can apply along the way.
1. Create eye-catching pages
A great website offers functional ways for visitors to get to what they need as efficiently as possible while also being easy to read and engaging. If your website design is outdated or cluttered, has poor or unappealing content, is difficult to navigate, or doesn’t work on mobile, you’re leaving leads on the table.
You can create or enhance your website by relying on a few tried-and-true approaches:
- Simplify the user experience. Try to think like a customer and design your pages with the most important information up front and easily accessible. If you have a specific call to action, display it clearly and prominently. The idea is to make it as easy as possible for a visitor to find what they want and make a purchase.
- Use high-quality content. Don’t shy away from media that paints a clear picture of what you have on offer. Graphics and video can engage and educate visitors, but poorly produced or low-resolution content will prompt them to leave for a more reputable-looking option.
- Write detailed descriptions. Once a shopper hits a product or service page, it’s time to show why you’re the best at what you do. A great description not only tells what the offering is but how the customer can benefit from purchasing it. Use this space to convince visitors to take action.
- Check for correctness. Errors detract from credibility. Whether it’s pricing inaccuracy, a spelling or grammatical error, or just a random typo, poorly written and inconsistent copy can seem unprofessional and push customers away.
- Recommend products. If a consumer is interested in one of your offerings, chances are they could be a customer for another product (or two or three) of yours. Make sure to cross-promote related products and services on different pages so visitors are aware of everything you have on offer. They just might purchase multiple items.
- Use CTAs sparingly. While you’ll want to keep your calls to action clear and consistent, you should not overwhelm a visitor with too many CTAs. Bombarding them with ads, pop-ups, or lots of buttons can actually have the opposite effect and turn them away from your website.
2. Offer incentives
Whether a first-time visitor or a returning customer, it could take some encouragement to get someone to convert on your website. One way to do this is to offer incentives to entice them to act now. Regardless of the form they take, some of the best incentives are time based, creating a sense of urgency around consumer action and gently recommending they not put off their purchase decision.
Incentives come in a variety of shapes and sizes, some working better than others depending on your business model and product or service offering. Here are a few to consider incorporating into your CRO strategy:
- Free shipping. This is often done by requiring a minimum purchase amount.
- Coupon codes. These can include anything from discounts to additional free products or services.
- Competitive pricing. Stand out by being willing to match or beat a competitor’s rates.
- Reward programs. Encourage brand loyalty by offering discounts or other benefits to people who sign up.
3. Make your store easy to navigate
Not only should your website look amazing, it should be quick and easy for a visitor to find exactly what they’re looking for. While you’ll put in hours of work to create pages with the perfect copy and collateral, you don’t want your visitors spending too much time trying to find the right product or service. They’ll get frustrated and go elsewhere.
One thing to keep in mind is website navigation. A clear and simple navigation bar shows all of your offerings in an organized manner. This is often one of the first places visitors go, not only to find what they’re looking for but also to get acquainted with the available options. A streamlined navigation avoids too much nesting and makes it quick to see items with just a click or a mouseover.
But navigation extends beyond the nav bar. Here are some more things you can do to bolster your website experience for visitors:
- Use banners. Showcase popular products or services by placing banner art on your website. This makes it quick for people to find what you’re known for with ease.
- Create filters. If you offer a wide variety of products, let users filter using common criteria to narrow and find the right product — in the right size, color, or shape — fast.
- Implement intelligent search. From using keywords to auto-completing search input, optimizing search can make it faster for visitors to find what they’re looking for.
- Monitor heatmaps. Discover exactly where and how users are interacting with your site, telling you what is working and what might not be.
4. Make purchasing easy
Your potential customer has successfully searched, navigated, perused, and explored your website. Now they’ve selected a product and clicked to add it to their cart. While this is a success in itself, the ecommerce process has only just begun.
A major part of conversion rate optimization is helping website visitors along through the purchasing process. This is where the number of steps and ease with which they can be completed become critical.
The first step is making sure visitors can clearly and easily add items to their virtual shopping cart. Design add-to-cart and checkout buttons that are prominent and consistent throughout your website. If pages have a lot of content, the button should move with the content or be placed at regular intervals along the page so visitors always have the option visible.
From there, you’ll want to optimize the payment and checkout process. The underlying message here is that less is more. Fewer steps, fewer fields, fewer clicks, and fewer pages will streamline efforts and make it less likely for a consumer to abandon the process out of frustration or lack of attention span. Here are some key concepts to keep in mind as you optimize:
- Offer guest checkout. Collecting consumer information is helpful for retention and cross-sell, but it can jeopardize an initial sale if a visitor has to create a new account to purchase your products. Consider that 24%of abandoned carts result from customers being asked to create an account. You can always ask customers if they’d like to create an account after the purchase is finalized.
- Make returns easy. Customer-friendly return policies go a long way to encouraging action. In the long run, the prospect of not being able to return a product easily if something is wrong is more likely to stop a purchase than prevent a return.
- Prefill fields. If you have access to the information, prefill as many fields on the checkout form as possible. The more fields the user has to input, the less likely they are to complete the form and the checkout process. This can be helpful for returning customers who have an expectation that you should know them already.
- Optimize forms. Consider the inputs being used for each field and determine the value of every field on the form. If it isn’t necessary, don’t include it. For required fields, include drop-down selections, calendar choices, and auto-format information to reduce input errors and speed up form entry for the user.
5. Optimize your website performance
You could have an amazing website full of optimized content — but if visitors can’t easily and quickly access the information from anywhere, then you’re missing out on countless conversions.
First and foremost, make sure your website’s speed and performance are up to standard. It should take no longer than two seconds for an ecommerce site to load to continue engaging prospective customers. In fact, the majority of people are likely to leave a website completely if it takes more than three seconds to load.
Another factor to remember is not all ecommerce happens on a desktop computer. Mobile ecommerce has become a big part of omnichannel marketing and selling. In 2023, experts expect more than 43% of ecommerce sales to take place through mobile devices. If your website does not load properly or takes too long to view on a smartphone or tablet, potential customers are going to give up and look for alternatives. Make sure your website is responsive, which means it operates properly on devices and monitors of all sizes and types.
6. Build trust
Brand loyalty and trust are not to be overlooked when considering conversions. Consumers who find a company, service, or product they can rely on are more likely to be returning customers. Among top brands, research has shown repeat purchases become more probable with each sale.
Trust takes time to cultivate, but there are hallmarks that brands can use to underscore their reliability and loyalty to a customer base:
- Customer reviews. Consumers like to see what other customers have to say about their experiences. Feel free to feature reviews and testimonials on your website, promote them on social media, and encourage consumers to give their own feedback.
- Be transparent. Make sure all contact information and applicable corporate statements are easy to find on your website. From return policies to customer support numbers, consumers are more likely to engage with companies that are transparent about who they are and what they offer.
- Highlight security. Make sure any applicable third-party payment logos and security badges are displayed prominently throughout the purchase process. Consumers want reassurance that they are providing their information to a trustworthy and secure vendor.
7. Test, test, test
Of course, nothing is set in stone when it comes to a CRO strategy. You’ll have the basics in hand with your calculated ecommerce conversion rate in comparison to industry benchmarks, but what works for one brand may or may not work for another.
Marketers and business owners need to stay flexible throughout the process of optimizing their conversion rates. If an approach isn’t working, do the research to determine why and change things to get more out of that particular channel or collateral.
Testing is an important optimization component because it allows you to iterate on your ideas and determine what is the best fit for your customer base and business needs. One tactic to use here is A/B testing, where you try different approaches on different segments of your customer base to see what resonates.
For example, you could write two separate marketing messages asking people to sign up for an email newsletter and send one message to 25% of the list and the second message to another 25% of the list. After a set period of time, look at the results and determine which message performed better based on your internal KPIs. Then, send the winning message to the remaining 50% of your mailing list.
Create your own CRO strategy
Optimizing the conversion rate for your ecommerce store is essential to creating a great experience for your potential customers and meeting your goals. This can affect everything from engaging with leads to achieving and exceeding sales projections, depending on how you define your KPIs.
The important part is to establish a baseline by calculating your own ecommerce conversion rate and then comparing your current performance with the competition and your internal goals.
When you’re ready to get started, calculate your conversion rate and walk through the current checkout flow customers encounter on your website. Evaluate where you have room to improve that shopping experience, whether in the form of new features, fewer steps, or clearer communication to name just a few.
Then, consider how adding to your toolkit can help you succeed with your plans. Adobe Commerce gives you the tools you need to create amazing product pages, personalize your customers’ experiences, and securely process payments, all of which support a CRO strategy.
Take a product tour to find out how Adobe Commerce can help ensure you’re efficiently converting customers.