Ecommerce Conversion Rate Optimization: Strategies and Best Practices

~ 15 min read | September 9

“The purpose of a business is to create and keep a customer,” said Peter Ducker, the father of management, back in 1954. 

Even in the age of eCommerce, his words are still relevant. 

Bringing traffic to your store is important, but it’s also essential that you can convert that traffic into customers. Focus on your eCommerce conversion rate to get more value out of your site visitors. 

eCommerce conversion rate optimization is the cornerstone of eCommerce retail sales. This blog will help you understand eCommerce conversion rates and how to calculate them. Plus, find out what could be hindering your conversion rates and learn about the best practices for conversion rate optimization.

What is an eCommerce conversion rate? 

For those new to eCommerce, let’s go over a few basics.

eCommerce conversion rate is the rate at which visitors become paying customers. For example, if 100 people visit your eCommerce store and 10 of them buy something, you have a 10% conversion rate. 

Improving your conversion rate is called eCommerce conversion rate optimization (CRO), and we’re going to go into detail about how to do it in a bit. 

Simple enough, right? Now let’s discuss how you can measure your conversion rate and what a good conversion rate might look like.

What Is a Good eCommerce Conversion Rate? 

If you’re new to tracking your eCommerce conversion rate, you’re probably wondering if yours is good or bad. What rate should you aim for?

The answer is: it depends. 

Citing about 12 studies, Growcode, an eCommerce optimization company, puts the average eCommerce conversion rate at 2.27%. 

But what a reasonable eCommerce conversion rate looks like varies widely by industry. If we look at the average conversion rate by industry, we can see that some categories like baby and child have an eCommerce conversion rate of under 1% (0.99% in this case), and others, like arts and crafts, have a higher conversion rate of 3.79%.

Average eCommerce conversion rate by industry

But the best way to measure success isn’t to compare your business to this chart or anyone else’s benchmark — it’s to track your progress. 

If you started with a conversion rate of 0.5% and now you’re at 2%, that means your CRO efforts are paying off, even if you’re still below the 2.27% benchmark. 

Why Is eCommerce Conversion Rate Important? 

You have a lot on your plate and a long list of potential KPIs to track. Should you really worry about your eCommerce conversion rate?

Here’s why optimizing your conversion rate is a worthy goal. 

1. Get More Value from Traffic

Many marketing tactics — like SEO, social media posts, or paid advertising — are aimed at driving more traffic to your website. 

But the quality of that traffic matters. If you consistently get 1,000 visitors per day to your eCommerce site, but none of them buy anything, you might as well have zero visitors. But if you follow the CRO tips below and get 50 of those 1,000 to buy, your traffic is suddenly more valuable. 

Without increasing traffic at all, you’ve increased your sales. 

2. Understand Your Customers

Let’s say that your eCommerce conversion rate is 3%. Then you add informational videos to your product pages, and your conversion rate goes up to 3.5%. Now you know that your target audience is more likely to buy if you offer these videos. 

Tracking your conversion rate helps you understand what drives site visitors to convert. 

3. Make More Money

The bottom line is that if a higher percentage of site visitors convert, you earn more revenue without needing to bring in more traffic. 

How To Calculate Your eCommerce Conversion Rate?

Before getting started with optimizing your eCommerce conversion rate, let’s figure out how to calculate conversions. That way, you have an accurate starting point. The conversion rate formula is a simple one. Follow the example below, and you’ll be able to figure it out. 

 

eCommerce conversion rate = (Total transactions/Total visits) * 100. 

 

Formulat to calculate conversion rate for your ecommerce store

You can also get more granular. For example, you could look at the conversion rate of a specific page or product. For right now, though, we’re going to stick with the conversion rate overall. 

The Top 5 Reasons Your Conversion Rate Is Low

There are a lot of reasons shoppers might fail to make a purchase. Fortunately, most of them are solvable. 

The Baymard Institute has some great insights on the percentage of shoppers that abandon their carts (and you can also check out a few more reasons on our blog). Other shoppers might bounce before they even consider a purchase. If your conversion rate is low, check for the following five problems. 

1. Lackluster User Experience

Without a good, optimized layout or sitemap, usability and customer experience suffer. If your site is too hard to navigate, too cumbersome, or too hard to read, it can drive customers away as soon as they put something in the cart. Poor navigation back to the shopping page and issues getting to the cart can play a massive part in your customers leaving without purchasing. 

It’s best to make sure that your website is optimized for desktop and mobile devices and keeps the user experience and buying experience in mind. 

2. Complicated Checkout Process

17% of online shoppers abandoned their cart because the checkout process was too long or complex. 

Checkout benchmark data shows that, on average, US checkout flow contains more than 23 elements and nearly 15 form fields. Baymard’s data shows from checkout usability testing that forms should only have 12-14 form elements and 7-8 form fields. Streamlining your checkout page will help drive customers to purchase rather than leaving their cart, annoyed by how many forms they have to fill out.

3. High Shipping Costs

Perhaps Amazon Prime has spoiled all of us, but customers expect free shipping in some way, shape, or form, whether it’s conditional (customers must buy a particular order value or something from a specific product category) or unconditional (free shipping no matter the cost). 

4. Messaging

It’s important that your messaging reaches its target audience. Regardless if that’s on your website or through any social media channels, emails, or other marketing channels, you may need to make adjustments to the copy or content. Your message is critical, so work with your digital marketing team to make sure you’re hitting all the right marks. 

5. Ineffective Calls To Action (CTA)

Very similar to messaging, if your CTAs aren’t compelling or don’t create any sense of urgency, potential buyers won’t go to your eCommerce store. 

 

What KPIs should you measure alongside eCommerce CRO? 

Planning out what KPIs you should measure for your eCommerce site is easy enough, especially with the help of Google Analytics. So let’s run through a glossary of terms and how you can use them in conjunction with eCommerce CRO to get a better understanding of your audiences and online shoppers. 

Here are some KPIs we suggest looking at when determining how well your eCommerce site is working for you and your customers. We’ve provided a summary of each term and links to more extensive definitions from around the web. 

  1. Unique Visitors – This is the number of individual users who visit your website during the reporting period you’ve chosen. This individual will be counted as a visitor only once under the “unique visitors” KPI. 
  2. Returning Visitors –  Unlike unique visitors, returning visitors are counted depending on how many times that unique visitor returns to view your eCommerce site again, and a higher proportion of returning visitors often translates to more loyal customers and higher revenue. 
  3. Bounce Rate – The percentage of visitors who view a single page and leave your site without going anywhere else. This helps you determine how effective your website is at retaining visitors. 
  4. Time Spent on Page – this is a metric that, simply put, measures how long a website visitor spends on a given page on your site. 
  5. Heat map – You’re probably familiar with heat maps and don’t even know it. If you’ve watched your local news and seen the weatherperson pull up a map with the temperature highs and lows, you’ve seen a heat map. Think of that, but for your website – they’re used to map out a visitor’s behavior and see where your customers are clicking and where they aren’t. 
  6. Points of Entry and Exit – Where the customer enters your website from (whether organic or paid, email, etc.), what page they enter, and what page they leave (and how many pages they view). 
  7. Cart Abandonment Rates – This is the percentage of online shoppers that add items to their cart but abandon it before buying anything. Again, this will show you the rate of interested customers. But this is such an essential part of ecommerce CRO and online shopping that we’ll dig in a little deeper in our next section. 

What is cart abandonment? 

Abandoned carts play a massive part in the eCommerce conversion rate, and of course, it’s something that you want to avoid when it comes to your online store. Baymard Insitute has the average documented online shopping cart abandonment rate at 69.8% as of December 20, 2020. Just over 30% of customers check out, which means companies are losing massive amounts of market share and customers. But why do so many people abandon their carts, and how can you stop it? 

eCommerce CRO | Reasons for cart abandonments

What can hinder your eCommerce conversion rate? 

While you can never solve shopping cart abandonment entirely, there are things you can do to fix checkout abandonment before it even starts. 

The Baymard Institute has some great insights on the percentages of shoppers that abandon their carts (and you can check out a few more reasons on our blog as well), but there are just a few we think you should focus on when tackling this potential problem. 

  • Usability and lackluster user experience

Without a good, optimized layout or sitemap, usability and customer experience suffer. If your site is too hard to navigate, too cumbersome, hard to read, or many other things, it can drive customers away as soon as they put something in the cart. Poor navigation back to the shopping page and issues getting to the cart can play a massive part in your customers leaving without purchasing. It’s best to make sure that your website is optimized for desktop and mobile devices – with the user experience and buying experience in mind. 

  • Complicated checkout process

18% of online shoppers abandoned their cart because the checkout process was too long or complex. Checkout benchmark data shows that, on average, US checkout flow contains more than 23 elements and nearly 15 form fields! Baymard’s data shows from checkout usability testing that forms should only have 12-14 form elements and 7-8 form fields. Streamlining your checkout page will help drive customers to purchase rather than leaving their cart, annoyed by how many forms they have to fill out.

  • High Shipping Costs

Perhaps Amazon Prime has spoiled all of us, but customers expect  free shipping in some way, shape, or form, whether it’s conditional (customers must buy a particular order value or something from a specific product category) or unconditional (free shipping – no matter what the cost) 

  • Messaging

Using the KPIs as mentioned earlier, in conjunction with some others (like email clickthrough rate), you should be able to tell if your messaging isn’t reaching your target audience. Regardless if that’s on your website or through any social media channels, emails, or other marketing channels, you may need to make adjustments to the copy or content. Your message is critical, so work with your digital marketing team to make sure you’re hitting all the right marks. 

  • Ineffective CTAs

Very similar to messaging, if your CTAs are essential or don’t create any sense of urgency, potential buyers won’t be compelled to even go to your eCommerce store. 

How can you increase the eCommerce conversion rate?

Now that you’re on the lookout for these potential issues mentioned above, you can work on increasing your conversion rate as soon as possible. If you find your numbers slumping but are at a loss on how to fix them, we’ve got some great solutions. These are the best solutions that many of our customers have implemented successfully. 

  • A/B Testing 

A/B testing is at the top of this list for a reason. It’s a tried and true method for making minor tweaks that can have massive impacts. Once you’ve identified where the problem on your website is (maybe one page has a high bounce rate or low time spent on page), adjust images, layout, CTAs, or anything else you feel could help solve the problem and run an A/B test. You could do it on any page on your website, including the homepage.

Just make sure you sent a period of the test and are keeping track of the results!

eCommerce CRO | A/B testing

Image from Optinmonster. 

  • Creating Landing Pages 

Landing pages are something marketers that work in B2B are familiar with, but You can apply that idea to B2C as well. Creating a custom landing page to be shared via email or on social media can bring your target audience to a page tailored right to their needs. Again, it’s all about targeting particular traffic and a particular audience to push conversions. 

eCommerce CRO | Landing pages

Source: winc.com

Landing pages to increase eCommerce conversion rate

Source: Curology

  • Better Shopping Cart Experience

This may be where you’ll be able to see the most improvement as checkout flows are one of the most significant issues and one that is, on the whole, solvable. If you just focused on improving the checkout experience, you can improve your conversion rate. Having a frictionless checkout experience (something Chargebee can help you with!), whether on mobile or desktop, is imperative to improving your conversion rate. Chargebee has an off-the-shelf checkout experience that will bring your dream checkout experience to life. 

To customize your checkout and self-service portal to ensure a frictionless customer journey, explore Chargebee Moments.

Better UX for eCommerce CRO

  • Improved pricing 

This may be the most challenging part of the improvement to tackle, only because you need to find that sweet spot of what’s best for you and what’s best for your customers.

Some eCommerce pricing strategies you can experiment with are creating visuals for sale items, enticing customers with a loss leader (Shopify has some great pointers on this complex topic!), or even A/B testing your pricing (a favorite strategy of Chargebee customers). 

These are great methods for making adjustments to your already existing pages and eCommerce site, and they go hand in hand with the best practices for optimizing your eCommerce CRO. 

Best practices for eCommerce conversion rates

At Chargebee, we’re always discussing with our customers what they’ve found to work best for making improvements to their eCommerce business. And we’ve brought you our five best practices – which, now that you know everything about eCommerce conversion rates, will help you optimize your business. 

High quality and easy-to-use website (especially for mobile devices) 

Ensuring that your website has excellent functionality on both mobile and desktop sites is imperative. According to Oberlo, nearly three out of every four dollars spent on online purchases is done through a mobile device. Without excellent mobile capabilities, your products may be abandoned in a customer’s cart forever.  

  • More Payment Options with PayPal and other credit card companies 

Like PayPal, Venmo, or a buy-now-pay-later startup like Klarna or Afterpay, major payment methods give your customers the flexibility they might not have with traditional retailers or on other sites. And don’t forget major credit cards, like Mastercard or American Express, which some customers may prefer. Currently, Chargebee supports Stripe, Paypal, Braintree, Checkout.com, GoCardless, and 27 other payment gateways, making sure that your customers can use whatever payment method they prefer. 

  • Customer reviews, testimonials, and even case studies 

Depending on what you’re selling, testimonials and case studies may not be the best route to go. Still, at a minimum, you should be including customer reviews. G2 has gathered so many stats, but let’s highlight some of the most impactful ones: 

  • From 3Dcart: Reviews make customers 71% more comfortable purchasing a product
  • From Broadly: Customers spend 31% more when a business has positive reviews.

Think about how much these positive reviews could impact your business – and how easy it would be to get reviews – GatherUp’s data places the number of questions 75% of consumers are willing to answer at five or less. 

customer reviews

  • Offering a new service, like subscriptions 

If you follow the blog (and if not, why aren’t you subscribed yet!), you know we’ve been talking a lot about how eCommerce subscriptions are the way of the future. You can read all about recurring billing here. But before you dive in feet first, know that subscriptions are excellent for growing revenue and building those strong customer relationships.    

Solutions like Chargebee can help you manage your subscription strategy, soup to nuts. Chargebee lets you change pricing on the fly, create coupon codes, run recurring subscriptions, and so much more. So take a look to see what we can offer you, or go ahead and schedule a demo now! 

Conclusion 

Jumping into the eCommerce world can seem daunting. The last thing you want to worry about is how your site may not be optimized for your customers, whether through messaging, lack of mobile functionality, poor checkout experience, or poor pricing strategies. Follow the best practices and keep all the hindrances we mentioned above in mind when creating your business goals around eCommerce.

 

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Stephanie Erbesfield

Stephanie Erbesfield is a seasoned content marketer with experience in tech and startups. Trained in journalism and creative writing, she views marketing as a chance to weave a story.

Aravind Ekanath

Marketing enthusiast with a love for motorcycles. Content Marketer at Chargebee.