Understanding conversion rates (CR) - the good, the bad and the lovely
Every online business wants to go big. There's lots of competition. The conversion rate is a powerful way to beat it and build your business.
Conversion rate. Noun. The percentage of website visitors who take a preferred action in a specific period. In ecommerce, this is usually an enquiry or a purchase.
Here's an example. 500 000 visitors arrive at a website selling biodegradable cleaning products in April and 5 555 of them buy something. The site's conversion rate for that period is 5 555 / 500 000 x 100/1 = 1.1%.
Like anything in business, it depends. According to BigCommerce's industries analysis, average ecommerce rates are between 1% and 2 %.
Conversion rates can differ across platforms.
Little Data reports that Magento's average is 1.1%. Stores that achieve 3.0% are in its top 20 percent and those that get 4.6% are in its top 10 percent.
In the same period, Little Data reported that WooCommerce's conversion rate evens out at 0.4%. Woocommerce stores with more than 2.6% are in its top 20%, and those greater than 4.2% are in its top 10%.
It also reports that Shopify's average conversion rate is 1.6 %. Merchants with more than 3.6% are in its top 20% and those with above 5.1% are in its top 10%.
Conversion rates differ across sub-sectors, too. The ecommerce Food and Drink sector averages at 1.4%; its Kitchen and Home Appliances at 2.7%. You'll find a handy conversion rate calculator for your sub-sector here.
Remember, averages are just that - average. Every business is unique. You may find more value in setting and raising your own benchmarks if your company is in its early stages, or sales have yet to scale.
"Most current ecommerce platforms are inherently capable of decent conversion rates," ShopCreatify founder Ross Allchorn points out. "It's how you use them that makes all the difference."
There are many factors influencing ecommerce conversion rates. Here are a few ways to raise your CR.
Clear, clean imagery helps the visitor decide if the product is right. Can they see it from a variety of angles? Prioritize well-lit, high definition, web-optimized shots. Here are more image tips from Shopify itself.
Audit your product offering. Do you need to arrange items better? Is there too much going on?
Online customers can't touch goods, or take their purchases home with them immediately. They may be hesitant to add credit card details online.
There are other metrics that can raise or lower a CR. A great product might not sell if it has poorly-targeted social media ads, for example.
Remember that a conversion rate keeps rising with strategic, consistent, and incremental changes. Every little bit helps, so give it a go today!
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