Ecommerce sales are on the rise, accounting for nearly $1 out of every $5 spent online. That means there are plenty of potential customers out there for your ecommerce site — but plenty of competition as well. Getting visitors is only one part of the equation for an ecommerce site. You also have to convert them into customers.

This guide walks you through everything you need to know about conversion rates for ecommerce and how you can improve yours to turn your site into a solid source of income.

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Understanding Conversion Rate

“Conversion rate” means many different things, depending on your goals. But to keep things simple, your conversion rate is the number of visitors to your site who complete an action that you want them to perform. In the case of ecommerce, the best measure of this success is sales.

Every person who comes to your site and makes a purchase is a conversion, from visitor to customer. You can also measure conversions in a number of other ways, such as getting a new subscriber or follower, contacting you, or completing a form. All of these are examples of a conversion and a new opportunity to create a customer, potentially even a recurring one.

optimize conversions
Source: Bluehost.com

The higher your conversion rate, the more frequently you’re going to see sales occur. It’s a sign that your content is working and your products are appealing to the audience that is visiting your site.

Low conversion rates aren’t necessarily a sign of failure, but rather an opportunity for improvement. If you’re attracting lots of visitors, you have a big audience that you can convert. It’s just a matter of figuring out how.

What Factors Affect Your Website’s Conversion Rate?

There are a number of factors that result in an unacceptable conversion rate for your ecommerce site. These factors vary from the type or quality of content on your site, the overall user experience, a lack of appealing products, and several other factors.

Use your own experience browsing the web and interacting with sites. You’ve almost certainly come across sites that turned you off for any number of reasons. If visitors have that same reaction when they land at your site, they’ll leave before they ever consider making a purchase.

Here are a couple of the common factors that affect your conversion rate:

User Experience

From how your site looks to how easily it can be navigated, a good user experience is one of the most important qualities for an ecommerce site. If users find your site unappealing, they will leave quickly. If they cannot navigate to the pages or content they are looking for, they will never make it to check out.

Sites should be designed with the visitor in mind so the site is easy to use in the way that the average visitor expects. This means making sure the site interface works as intended, from scrolling to search.

Site Optimization

An ecommerce website that has proper search engine optimization receives more visitors. If you haven’t implemented proper SEO, you are missing your audience as they are unable to find you on search engine result pages.

Everything from your keywords to proper image and content labels is essential for improving search engine optimization and helping your audience find your site.

Mobile Site Optimization

More and more users and potential customers browse the web as a mobile-first experience. If your website isn’t properly optimized to appear on mobile devices, you are missing out on potential users.

Making sure that your site is designed to fit mobile screens and has features that work on mobile as well as desktop is essential.

How Do You Calculate Ecommerce Conversion Rate?

Calculating the conversion rate of your ecommerce site is a simple process requiring one basic equation.

Using your website analytics tool of choice, whether that is Google Analytics or one of a number of other popular options available, find how many total visitors that your site received in a month. Then find out what your total number of conversions were in that same time period.

Divide the number of conversions by the number of visitors, then multiply that figure by 100.

Formula Conversion Rate
Source: Shopify.com

(Conversion Rate / Visitors) * 100

Here’s a quick example to show you how it works:

Let’s say your ecommerce site gets 5,000 visitors in a month. At that same time, you make 100 conversions. So, you’ll divide 100 by 5,000 and then multiply by 100 to find the conversion rate.

100 / 5,000 = 0.02
0.02 * 100 = 2

In this example, your conversion rate is 2%.

What Is a Good Ecommerce Conversion Rate?

Determining what a good conversion rate is for your ecommerce site is going to vary based on your goals and the niche that you occupy. However, it’s good to know what a good baseline is for ecommerce sites in general so you can properly set your expectations.

Understanding the average conversation rate for ecommerce sites lets you know if your site is operating as efficiently and effectively as it should be and serves as a good indicator of whether your site is succeeding or if it needs work.

According to data from WordStream, a good conversion rate is considered to be between 2-3% across all industries, with the industry leaders producing a conversion rate of up to 5% and higher.

However, ecommerce sites tend to have lower conversion rates. This is because of the sheer amount of competition, as well as the challenge of keeping visitors engaged and interested in what your site offers. A good conversion rate for an ecommerce site is between 1-2%, with the industry average coming in at just over 1.8%.

If your site falls within that range, you can consider your site to be a success. The top 25 most successful sites within the field produce a conversion rate of 3.71%, and the top 10 have a conversion rate of 6.25%.

The difference between average sites and the most successful feels relatively small, but consider that the top 25 ecommerce sites convert at nearly twice the rate of an average site. It’s no small task to achieve that.

How Do You Grow Your Ecommerce Conversion Rate?

The best way to grow your ecommerce conversion rate is by identifying the area where your site is struggling and focusing on improving that. There are some common tactics and principles that you can apply to your site to ensure that you are producing the highest conversion rate possible.

conversion rate optimization
Source: Shopify

Improve Optimization

Making sure your site is fully optimized helps visitors find you. It also ensures that once they get to your site, that they are seeing the kind of content that appeals most to them. Perform search engine optimization techniques to make sure that your site is appearing in search engine result pages. Include high-quality images to make a more visually appealing and striking site. Consider video when relevant, as sites with quality multimedia content tend to perform better.

Offer Discounts and Deals

One way to make your site more competitive and more appealing is by offering discounts and deals. Potential customers tend to respond positively when they see offers that they believe benefit them or make them feel like they are getting a good deal.

Offering free shipping and free returns is one way to make customers feel comfortable and willing to make a purchase. Offering discounts before checkout and showing products on sale also makes customers more interested in making buying a product.

Personalize the Experience

A personalized experience always helps a visitor feel comfortable and interested in what your ecommerce site has to offer. This effect is achieved in a number of ways.

Try to send emails and other content that appeals to a visitor’s tastes. Include geolocation-specific information, push notifications, and support or chat solutions that make people feel like they are being taken care of. Use customer data to create an experience that is dynamic and optimized to their demographic.

Use Scarcity (FOMO) To Your Advantage

No one wants to feel like they are missing out on a good deal. A sense of scarcity often appeals to someone who is on the fence. Offer time-sensitive coupons and offers that will help a person make a decision.

Also, consider highlighting products or services that are in high demand and let your visitor know that they might miss out if they wait too long. Prompts when people have put something in their cart but haven’t bought yet also help to convert them into customers.

Consider A Mobile-first Strategy

Most people now browse the web on their phone and they are growing increasingly comfortable making purchases on their mobile device, too. Make sure your website is optimized for mobile and is capable of functioning fully on a smartphone.

You don’t want to lose a potential customer because they can’t complete a transaction on their phone. Also, consider including a guest checkout option in case they don’t want to log in on their phone but still want to buy your product.

While you can optimize your website as much as possible, at the end of the day, the only thing that will drive a conversion from visitor to customer is a product that the customer wants. Everything else is about getting them there, but you will want to make sure you are offering your visitors something appealing and worthwhile to convert them.

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