Everything you need to know about ecommerce conversion rate optimization

A man learns about ecommerce rate optimization on his phone.

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 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

A graphic that shows the formula for how to calculate ecommerce conversion rates.

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 (CRO) is a marketing tactic to increase the percentage of website visitors who take a particular action by making strategic improvements to your site.

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:

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:

A graphic that shows examples of offer incentives that can help to optimize ecommerce rates.

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:

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:

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:

A graphic that shows how to build trust in order to optimize ecommerce rates.

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.