Ecommerce conversion rate — what is a good conversion rate and how to optimise 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 optimised 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 optimising 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 to define your SEO strategy, advertising spend, email tactics and where else to optimise engagement along the customer journey.

Boosting conversion rates comes down to providing your customers with personalised, 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 anonymised data from Adobe Analytics customers who have opted into Adobe Digital Insights benchmarking programme. 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:

Industrial manufacturing

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 organisations 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, personalising their experience with select product catalogues and negotiated pricing.

A good conversion rate based on the 75^th percentile is 2.2%. Companies achieving strong conversion rates often have optimised 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 affected by the COVID-19 pandemic. According to Statista, digitalisation puts the customer in the driving seat, enabling endless comparison and scrutiny of fast-moving consumer products on the spot.

The pandemic saw businesses like Coca-Cola introduce direct-to-consumer models for the first time. You can read about Coca-Cola's D2C programme, Coca-Cola en tu Hogar (“Coca-Cola in Your Home”), here.

The median conversion rate for this industry in 2023 is sitting at 0.8%, with a significant gap between that and the 75^th percentile conversion rate of 2.8%.

Retail

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 75^th percentile, retail companies are hitting a conversion rate of 4.2%.

Telecommunications

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 75^th 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 organisations and governments recognising the value of telecom investment in the digital economy.

Now that we know what good looks like, let’s explore tactics to optimise your conversion rate.

Tactics for optimising 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:

1. 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.
2. The company used personalised payment and fulfilment experiences by region, which enabled flexibility and empowered HP to meet local requirements for payment gateways, fulfilment logistics, language, order management and other capabilities to ensure a seamless localised customer experience.
3. Finally, HP implemented a very successful click-and-collect programme 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

Relias provides digital and in-person training and education for 11,000 healthcare organisations 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 personalised content on the site with content management powered by Adobe Experience Manager and merchandising, catalogue and checkout powered by Adobe Commerce.
• The company developed a responsive, mobile-friendly site to increase conversion on mobile traffic.
• Relias personalised 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 customised landing pages to optimise 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 personalised buying experiences for its B2B customers to show only relevant product catalogues to customers — rather than overwhelming them with the complex catalogue 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 optimise 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

Summary

Ultimately, businesses that focus on optimising 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.

To learn more about how Adobe Commerce can help you to optimise your conversion rates, request a demo today or get in touch with your Adobe representative.

Kate Duckworth is an eCommerce and digital marketing specialist at Adobe.