What is a Good eCommerce Conversion Rate and How to Improve Conversion in eCommerce?

Let's face it. Almost every eCommerce startup's primary objective is to make sales, plenty of it. But in reality, sales do not come out of the blue. Sales often depend on marketing factors called conversions, which occur only when a visitor completes a desired action on an eCommerce platform.

Aside from sales, conversions could also involve email signups, social media shares, users adding a product to their cart — Basically, activities that could eventually lead to sales.

That said, in order to optimize resources and still boost sales, eCommerce brands need to know the rate of these conversions and go a step further to devise strategies to improve their conversion targets because a good eCommerce conversion rate is oftentimes the difference between success and failure for the business.

 

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What is an eCommerce Conversion Rate?

The eCommerce conversion rate is the percentage of a website's visitors who complete an activity, expressed as the ratio of activities to the total number of sessions.

For example, every time a visitor goes to an eCommerce platform and browses through the product list, it is recorded as a session. And every time a visitor completes an activity like making a purchase, it is recorded as a transaction.

In this case, we can calculate the conversion as the ratio of the total sessions to transactions. For example, the ratio of one purchase after every five sessions would translate to a 20 percent eCommerce conversion rate.

Although we had earlier touched on how beneficial the mobile eCommerce conversion rate is for eCommerce startups, let us go into some detail about why this metric is crucial.

Why is eCommerce Conversion Rate Critical?

The general idea behind eCommerce conversion rates is to get actionable information on visitor activity to help facilitate the brand's primary objective. Here are reasons why eCommerce conversion rates are crucial to brands.

1. Enables data-driven decisions

Data from these sources helps evaluate inherent problems in a business, their effects, and actions that rectify these issues. With data-backed insights, brands can transition away from intuition-based decisions, placing them ahead of the competition.

• Learn more about customers and visitors

eCommerce conversion rate helps businesses understand their consumer demographics, who they are, how they think, and their preferences based on how they interact with your website. The information from the eCommerce conversion rate helps improve an eCommerce site’s user experience, bringing consumers further down the sales funnel.

• Improves your search engine rankings

Is it common knowledge that users hardly scroll past the first page of search engines? Hence the priority for eCommerce brands is to appear on the first page by utilizing search engine optimization (SEO).

By effectively optimizing the conversion rate, brands can know more about their consumer needs. And thus can focus on targeting relevant search terms and the right keywords, which would subsequently increase their ranking on search engine result pages (SERPs).

• Profitable advertising campaigns

eCommerce conversion rates help businesses create better advertisement campaigns because they know the right products to advertise. Brands can avoid spending a fortune on marketing and still achieve excellent results that would ultimately increase website traffic and result in more sales.

What is a Good eCommerce Conversion Rate When Looking Across Different Channels?

Various channels have different standard conversion rates. So to get a clearer picture, here is a list of different channels in eCommerce and their standard conversion rates:

1. Affiliate networks

Affiliate channels use affiliate tracking to monitor the conversion rate for businesses. Affiliate marketers’ goal goes beyond increasing the number of visitors but also turning them into leads.  

• Social networks

The use of social media for eCommerce is the new trend, but a valid question among marketers is — what is the conversion rate of businesses that utilize social media?  While social media helps with brand publicity, conversion rates are oftentimes low because consumers are oftentimes only looking to ‘window shop’ on social media than make a purchase.

Besides, conversion rates also vary for different social media platforms. Here is a list of standard conversion rates across various social media platforms.

Social media platform	Standard conversion rates
Facebook	1.08%
Instagram	1.85%
Twitter	0.77%
Pinterest	0.54%

• Search engine networks

Using search engine networks for eCommerce is critical for businesses as it keeps you visible to most of your customers. Google is one of the most used search engines, and the standard conversion is 3.48% across all industries and 0.72% on display networks.

• Online marketplaces

Online marketplaces connect buyers to sellers directly, and their conversion rates differ by platform. Examples of these platforms are Amazon, eBay, and Etsy, etc., and in 2020 the standard conversion rate for amazon stood at 9.55%, while for eBay was at 2-3%.

How to Improve on eCommerce Conversion?

Improving your eCommerce conversion rate is crucial to the profitability of any eCommerce business, and it involves acting upon data on consumer conversion and optimizing them for improvement.

And the best to improve eCommerce conversion is by conducting multivariate (A/B) testing where brands can test relevant conversion variables on users to see which provides the most desired effect.

Aside from using testing methods, some ways eCommerce brands can improve their conversion rate are by:

1. Using high-quality images and videos on your product page

Visual content influences how consumers perceive a brand. And by using high-quality pictures, products seem more enticing, which in turn enables consumers to be drawn further down the sales funnel.

• Provide limited time coupon codes

Everyone loves a discount. Giving limited-time coupons takes advantage of the human's fear of missing out (FOMO) and creates an irresistible urgency for consumers to make a purchase.

• Allow shopping via social media

Removing bottlenecks often encountered along the consumer's shopping journey and ensuring that all touchpoints that users come across are met with the best experience possible is vital to improving conversions.

eCommerce brands can also go as far as incorporating direct shopping features, which many social networks now allow to maximize conversions and boost sales.

• Offer free shipping

Consumers always desire a decent value for every penny spent. And so businesses must go to extra lengths to keep consumers interested in their products and services by offering add-ons like free shipping to enhance the general shopping experience.

• Include verified customer reviews on your product pages and social media pages 

Real-time consumer reviews help to boost a brand's reputation. Customers want to know if someone has bought that product before and what his/her experiences was. By encouraging customers to drop a review once they receive their order accompanied by a creative call-to-action, businesses could potentially stimulate conversions.

Conclusion

eCommerce brands that want to stand out and achieve success must always identify conversions that are relevant to their business goals and find creative ways to optimize their conversion rates.

Asides from an expert understanding of what is a good eCommerce conversion rate, eCommerce brands need to be able to execute strategies that improve their Commerce conversion rate and there is no better way to do so than with AllValue.

AllValue is an eCommerce platform with industry-leading tools that help deliver exceptional mobile eCommerce conversion rates and other fringe factors that helps eCommerce businesses to grow. From data analytics on important metrics to influencer marketing campaigns that place your brand in front of the right audience.

Visit AllValue today to get started on your free 15-day offer!