Ecommerce conversion rate — what is a good conversion rate and how to optimize it
Let’s talk about conversion rates.
Key performance indicators (KPIs) for ecommerce sites matter — from big choices about company growth to small tweaks to the customer experience, metrics should inform each decision. While ecommerce sites gather countless data points — from traffic to profile data and beyond — one of the most critical KPIs is conversion rate (CR). Put simply, your conversion rate is the percentage of your website traffic that has successfully purchased on your site. For example, if 100 people visit your site and 3 complete a purchase, your conversion rate is 3%.
Conversion rate is key to understanding how your customers are engaging, what’s influencing their intent to purchase, and what can be optimized in the customer journey to help your site increase the revenue it generates for your business.
Let’s dive into what a good conversion rate is across major industries and how leading businesses are optimizing their sites to increase it by looking at examples of real Adobe Commerce customers.
Why is conversion rate important?
Conversion rate is important for several reasons, the most obvious being the influence it has on revenue. For example, if you increase your conversion rate by just 1% on a site generating $10 million, you add $100,000 to your top line instantly.
Understanding your conversion rate performance can help define your SEO strategy, advertising spend, email tactics, and where else to optimize engagement along the customer journey.
Conversion comes down to moving customers through the purchase funnel.
Boosting conversion rates comes down to providing your customers with personalized, easy-to-navigate, differentiated experiences that influence them to move through the conversion funnel from the initial site visit all the way to purchase.
“Today’s buyers have strong preferences and seemingly endless choice in their purchase decisions,” said Tom Cosgrove, senior director analyst in the Gartner Sales practice. “Simply being sensitive to this reality is woefully inadequate for sellers and marketers to cut through the noise and differentiate themselves in buyers’ eyes."
What is a good conversion rate?
A good conversion rate can be subjective and can come down to the purpose of your site, the products you sell, and the type of customers that are purchasing on it. However, a helpful place to start is to understand how your conversion rate stacks up against benchmarks for your industry. Getting specific to your industry is crucial because, as you can imagine, a B2C retail ecommerce store like Nike will have very different results and customer experiences than a B2B ecommerce store like global packaging company Sealed Air.
To provide industry benchmarks for you, we’ve aggregated anonymized data from Adobe Analytics customers who have opted into Adobe Digital Insights benchmarking program. This data is not specific to Adobe Commerce but rather provides industry averages across all ecommerce platforms. Let’s check out conversion rates by industry:
The manufacturing industry is projected to amount to $14.83 trillion in 2023, encompassing the manufacture of goods as well as installation, repairs, and associated parts sales. Ecommerce transactions in this industry increased in recent years, with an Adobe study finding the accelerated adoption of technology in B2B sales organizations was heavily influenced by the COVID-19 pandemic — as businesses had to adapt to operating in virtual environments. We are also seeing younger generations with more technological comfort moving into senior buying and decision-making roles.
As you can see from the data below, the average conversion rate for the industrial manufacturing industry sits at 0.6%. While this may seem low in comparison to other industries, the use cases for ecommerce in this industry are very different.
Use cases in B2B ecommerce environments often require sales intervention to set up their customers’ online shopping experience — for example, personalizing their experience with select product catalogs and negotiated pricing.
A good conversion rate based on the 75th percentile is 2.2%. Companies achieving strong conversion rates often have optimized buying portals to reduce friction and drive B2B customers from discovery to purchase.
Consumer goods manufacturing
The consumer goods industry encompasses items such as food, beverages, and clothing. Similar to industrial manufacturing, consumer goods manufacturing was heavily impacted by the COVID-19 pandemic. According to Statista, digitalization puts the customer in the driver's seat, enabling endless comparison and scrutiny of fast-moving consumer products on the spot.
The median conversion rate for this industry in 2023 is sitting at 0.8%, with a significant gap between that and the 75th percentile conversion rate of 2.8%.
In 2021, retail ecommerce sales amounted to approximately $5.2 trillion worldwide. This figure is forecast to grow by 56% over the next few years, reaching about $8.1 trillion by 2026, according to Statista.
The median conversion rate for the retail industry in 2023 is sitting at 2.3%, decreasing by 10% in comparison to 2022. The decrease has been attributed to COVID-19 influences. As people return to in-store shopping, however, they continue to visit ecommerce sites to research and validate availability in store.
At the 75th percentile, retail companies are hitting a conversion rate of 4.2%.
Strong growth in the global telecommunications market is expected in 2023, with a forecasted $1.5 trillion to be spent worldwide. This represents a 2.8% increase in the estimated spend for 2022, according to Statista.
The average ecommerce conversion rate in this industry increased by 8% from 2022 to 2023. At the 75th percentile, companies are seeing a 0.50% conversion rate. Services and devices have become increasingly more available for online purchases, as businesses like T-Mobile look to reduce human intervention and focus on self-service experiences for customers.
According to Statista, telecom services have become even more important in an era of flexible working, with organizations and governments recognizing the value of telecom investment in the digital economy.
Now that we know what good looks like, let’s explore tactics to optimize your conversion rate.
Tactics for optimizing your conversion rate
There are endless strategies, campaigns, and experiences businesses can create to improve their ecommerce conversion rate. Let’s take a look at some real-world tactics used by real Adobe Commerce customers to boost conversion at their companies.
HP Asia Pacific
HP Asia-Pacific is a $10 billion regional business unit with over 3,000 employees. It has ecommerce sites for 16 countries across APAC and LATAM on Adobe Commerce. In a recent re-platforming project with Adobe Commerce, the business saw significant impacts on conversion rates including:
- 48% increase in conversion rates for Thailand
- 36% increase in conversion rates for Hong Kong
- 22% increase in conversion rates for Indonesia
- 8% increase in mobile conversion
Here are tactics HP Asia-Pacific used to improve conversion rates:
- HP aligned customer experiences across markets on Adobe Commerce’s multi-site architecture, enabling them to deliver common site navigation, page templates, dashboards, and security to customers across regions. This gave HP the ability to deploy tried and tested conversion boosting changes to all regions faster than if it was operating on many platforms, accelerating time to market.
- The company used personalized payment and fulfillment experiences by region, which enabled flexibility and empowered HP to meet local requirements for payment gateways, fulfillment logistics, language, order management, and other capabilities to ensure a seamless localized customer experience.
- Finally, HP implemented a very successful click-and-collect program at 600 locations, boosting conversion on-site as customers purchased online before picking up in store.
“We needed agility across multiple segments of the platform and a sustainable cost structure that would pave the way for our global deployment plan.”
Relias provides digital and in-person training and education for 11,000 healthcare organizations and their caregivers. In a recent project to revamp and improve the customer experience across its direct-to-consumer (D2C) brands, Relias saw:
- A 14% increase in digital commerce revenue
- A 70% increase in conversion rate
- A 28% increase in average order value
- An 80% increase in mobile web conversions
Tactics Relias used to improve conversion rates:
- Relias personalized content on the site with content management powered by Adobe Experience Manager and merchandising, catalog, and checkout powered by Adobe Commerce.
- The company developed a responsive, mobile-friendly site to increase conversion on mobile traffic.
- Relias personalized shopping experiences by moving to a drag-and-drop Page Builder experience, giving the company’s marketers more control over the customer experience and reducing their dependencies on engineering and IT.
- The company performed A/B testing with traffic flowing to custom landing pages to optimize conversion rates over time.
- And Relias used site membership subscription that auto-renews through the Adobe Commerce platform and gives subscribers discounts on courses and more.
All States Ag Parts
All States Ag Parts is North America’s largest seller of new, used, and remanufactured tractor parts. In a recent re-platforming project with Adobe Commerce the company saw impact in conversion rates, including:
- A 37% revenue jump and a 10% conversion rate jump within the first month after the new ecommerce site launched
- A 5% increase in average order value (AOV)
- A 21% increase in organic traffic from customers and an 18% increase in overall organic customers
Tactics All States Ag Parts used to improve conversion rates:
- All States Ag Parts created personalized buying experiences for its B2B customers to show only relevant product catalogs to customers — rather than overwhelming them with the complex catalog of 400,000 products and 150,000 categories.
- The company developed multi-site capabilities to ensure a unified customer experience across multiple brands, giving the control it needed to optimize the CX.
- Implemented a mobile-friendly responsive design, improving the experience for its mobile customers, which account for over 50% of their traffic
- Enhanced the returns experience, ensuring its customers would return to buy again. Adobe Commerce allows All States Ag Parts to charge its customers a fee to return their broken, used part that can be refunded once the part is received.
- Live inventory updates with SAP Business One integration to make sure the website is always up to date with the latest information.
- Used cloud-based solution for high performance combined with ease of management
Ultimately, businesses that focus on optimizing the conversion rate on their ecommerce site see benefits beyond a direct lift in revenue for each percentage point increase. Tactics that boost conversion also improve customer experiences to create stronger brand loyalty, increase customer retention, drive larger order values, and promote new customer referrals.
Understanding your industry benchmarks and continuously testing ways to increase your customer experience should be top of mind if you are operating an ecommerce site in any industry.
Kate Duckworth is an eCommerce and digital marketing specialist at Adobe.