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What Is a Good Conversion Rate for an E-Commerce Website?

What Is a Good Conversion Rate for an E-Commerce Website?

E-Commerce Conversion Rates

Today, static, one-size-fits-all websites are the most squandered opportunity in marketing. After marketers hypertarget paid ads, microsegment their CRMs, and personalize their emails, prospects are dropped onto a generic website that doesn’t speak to their specific needs or interests. The result? These visitors bounce and don’t convert into revenue.

This issue is prevalent in e-commerce. So, what can you do to optimize your website and increase your e-commerce conversion rate? 

When considering how to optimize your conversion rate, one of the first questions you should ask is what a good conversion rate for an e-commerce website looks like. Understanding how to define an optimal e-commerce conversion rate will help you know whether your business is doing comparatively well—or if there’s room for improvement. In this article, we’ll look at average e-commerce conversion rates by industry and discuss ways you can optimize your site to improve your own conversion rate.

Average E-Commerce Conversion Rates

Knowing your own website’s conversion rate is the key to setting new conversion goals and optimizing for them. However, just as important is knowing the average conversion rate across your industry and how it evolves over time. 

While the number varies from industry to industry, generally speaking, a good conversion rate for an e-commerce website hovers around 2-4%. (This is much lower than the rate of browsers to buyers in a physical store location, which is typically about 20%!) 

Different e-commerce industries vary significantly in their average conversion rates. Here are just a few:

  • Baby and child industry – 0.99%
  • Car and motorcycle industry – 1.55%
  • Sports and recreation industry – 1.75% 
  • Home accessories and giftware industry – 2.16%
  • Electrical and commercial equipment industry – 2.23% 
  • Food and drink industry – 2.37% 
  • Fashion industry – 2.44%
  • Kitchen and home appliances industry – 2.48%
  • Pet care industry – 3.28%
  • Health and well-being industry – 3.62%
  • Arts and crafts industry – 3.79%

How to Calculate the Conversion Rate for an E-Commerce Website

Once you understand average conversion rates in e-commerce as a whole and in your specific industry, you’re ready to analyze your own conversion rate. Calculating your conversion rate isn’t hard—the real challenge comes with optimizing it. Here are the 3 steps to calculating your conversion rate:

  1. Calculate the number of website visitors
  2. Calculate the number of conversions
  3. Divide the number of conversions by the number of visitors

As an example, if you get 50 out of 5,000 visitors to make a purchase (i.e. convert) on your site, your conversion rate is 1%.

How to Identify Areas for Improvement on Your Website

Once you’ve determined your own conversion rate, it’s time to identify areas for improvement on your website so you can drive more conversions. In order to pinpoint opportunities for improvement on your site, there is certain data you’ll want to assess to better understand your visitors and their behavior. Luckily, there are a wealth of ways to collect this data. 

One way to do this is by collecting raw data from your website (e.g. number of visitors and sales, which landing page is most popular, how long people spend on your website). You can also collect helpful data from Google Analytics or any other analytics platforms you have linked to your site.

If you want to dive deeper into examining potential problems on your website, consider gathering qualitative data in the following ways:

  • Session replay. With session replay tools, you can record the screens of real-life customers as they use your website to see which parts of the website help lead to conversions and which do not.
  • Heat maps. These tools map out the most popular and least popular parts of a webpage on a scale from red to blue. Like session replay, heat maps can help you identify which messaging and CTAs are resonating with your customers and which need improvement.
  • Remote user testing. This allows you to observe a test user’s screen as they navigate your website in real time. Going beyond traditional analytics tools, this type of testing allows you to get more in-depth feedback and see your website through your visitor’s eyes. 
  • Exit surveys. An exit survey pops up when visitors are about to leave your site (for instance, you can program the survey to appear when a visitor’s cursor moves toward their browser toolbar). These surveys can ask valuable questions such as “What’s preventing you from completing your purchase?” and then use this data to improve the website experience for your visitors.

How to Improve the Conversion Rate for an E-Commerce Website

No matter where your conversion rate is currently at, there’s always room for improvement (aka achieving higher sales!). Implementing conversion rate optimization (CRO) strategies can help you do just that.  

Here are just some of the many ways you can leverage CRO to improve your e-commerce conversion rate:

  1. Figure out where users are getting stuck. To improve your conversion rate, you first need to understand where you’re losing a potential customer. You can learn where visitors are having trouble with your website by leveraging a mix of analytics and user behavior analysis. First, use analytics to figure out which of your landing pages have the highest exit rates. Then you can use tools like session replay and heat maps to analyze where your visitors are experiencing friction. Wherever your visitors are getting stuck, be sure to use a local optimization approach and optimize for each step in the many-step journey of an e-commerce site (e.g. search for an item, view item page, add the item to their cart, check out). 
  2. Offer free shipping. It goes without saying that free shipping is an extremely attractive offer to customers, and they’ll often choose a vendor that offers free shipping over one that doesn’t. According to Forbes, 84% of consumers have specifically made a purchase because shipping was free. Determine which price threshold makes sense for your brand to offer free shipping without losing money and then clearly promote it on your website.
  3. Invest in higher-quality photography. Since e-commerce customers can’t physically handle a product before they buy it, it’s a worthwhile alternative to help them experience the product through great photography. High-quality photographs can bring your products to life as well as boost your brand and increase purchases, which can boost your conversion rate. You might also consider testing videos of your products so shoppers can get an even better sense of how your product works or fits.
  4. Provide social proof. Social proof (e.g. customer reviews or influencer testimonials) plays a huge role in a customer’s purchase decision, as it shows whether or not your product does what it’s supposed to do. According to TrustPilot, 89% of consumers read reviews before making a purchase. Consider the placement of your reviews on your product pages or ways you can highlight reviews elsewhere on your site.
  5. Make the checkout process easier. Difficult checkout processes are a huge reason customers abandon their carts, so it’s essential to reduce friction at this stage of the customer journey. Make sure your checkout process is fast, that customers can make purchases through a guest account without having to create a permanent account, and that as many payment methods as possible are allowed. 
  6. Optimize your site for mobile. Customers are increasingly buying items from mobile devices, so it’s essential to include mobile in your digital marketing strategy. Using the 2020 holiday shopping season as a litmus test, buyers made one-third of all online store purchases on their smartphones. That means if your site isn’t optimized for mobile, you may be negatively impacting your conversion rate by as much as 33% percent. However, if your website is easy to navigate on mobile, you’re head and shoulders above much of your competition. Some things to consider when optimizing your mobile site include right-sizing your images and text so they’re not distorted on a smaller screen, and removing any large pop-up windows. 
  7. Personalize the customer experience. Personalization is one of your best tools to improve the customer experience and convert your visitors. With data like demographics, previous session information, and traffic source, you can customize the experience for your visitors by greeting them appropriately, helping them pick up where they left off, and showing them products that are relevant to their search history or previous purchases.

Using Machine Learning to Improve Your E-Commerce Conversion Rate

Conversion rates are the lifeblood of e-commerce websites, and taking strategic measures to optimize your site to achieve more conversions and revenue will undoubtedly drive your business forward. 

One simple way to improve your e-commerce website and drive more conversions is to choose the right optimization solution. Intellimize’s Continuous Conversion™ solution leverages machine learning to automatically deliver a personalized experience to each unique website visitor, keeping them on-site longer and driving them down the e-commerce funnel, every step of the way to finally completing your end conversion goal, e.g. making a purchase. Request your demo today and see how we can help you convert more browsers into buyers.

"Intellimize helped us achieve 100% lift on adding items to bag with auto-replenishment."
Aurelian Lis - CEO, Dermalogica
Aurelian Lis
CEO, Dermalogica
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