Ecommerce is the future of shopping, and conversion rates are a key metric to watch. But what is a conversion rate?
Businesses that just focus on getting traffic to their website are missing out on a key metric: conversion rate. Just because you have a lot of visitors doesn’t mean they’re doing what you want them to do on your site. While on the other hand, a conversion rate lets you know how effectively your website converts visitors into customers or leads.
When talking about conversion rates, it’s important to distinguish between macro and micro conversions. We will discuss both, but we’ll focus on micro-conversion rates since they’re generally more important for ecommerce businesses. Remember, low conversion rates mean you’re losing out on revenue and need to take a hard look at your website.
So, let’s get started understanding conversion rates and how to improve them.
But first thing first: what’s a conversion? What is a conversion rate?
The conversion rate is the percentage of visitors to your website who take the desired action. The desired action could be anything you want them to do on your website. You could be selling products, so the desired action would be making a purchase.
Businesses focused on generating leads might want visitors to fill out a form. In this case, the desired action would be submitting the form. The conversion rate is the number of people who take the desired action divided by the total number of visitors.
It’s not like having a low conversion rate is the end of the world. In fact, most businesses have room for improvement when it comes to their conversion rates. The important thing is to track your conversion rate so you can identify areas where your website might need some improvement.
There are two types of conversions: macro and micro. Let’s talk about each one.
Macro conversions are the big ones. They’re the desired actions that directly impact your bottom line. For example, a macro conversion would be making a purchase if you sell products online.
Other examples of macro conversions include:
As you can see, macro conversions are actions that directly impact your revenue. When thinking about conversion rates, it’s important to focus on macro conversions.
Micro conversions are the smaller actions that visitors take on your website. They might not directly impact your bottom line, but they’re still important. Businesses should track micro conversions so they can get a better understanding of how visitors interact with their websites.
Also, by tracking micro-conversions, businesses can identify areas where they might lose potential customers. For example, if you see that a lot of visitors are abandoning their shopping carts, that’s an indication that there’s a problem with your checkout process. By addressing these issues, you can improve your overall conversion rate.
Downloading a white paper or e-book: When visitors download an e-book or white paper, they show interest in your company and what you have to say. Let’s say you’re a B2B company, and you offer a white paper on the benefits of your product. If a visitor downloads it, that’s a micro conversion.
Signing up for a newsletter: If someone signs up for your newsletter, it shows they’re interested in hearing more from you. They might not be ready to buy anything from you yet, but they’re interested in what you have to say.
Filling out a contact form: When someone fills out a contact form, they show interest in your company and what you offer. They might not be ready to buy anything from you yet, but they’re interested in talking to you.
As you can see, micro conversions are important, but they’re not as important as macro conversions. When thinking about conversion rates, it’s essential to focus on macro conversions.
Now that we’ve discussed conversion rates and the different types of conversions let’s talk about how to improve them.
The ecommerce world is getting more and more competitive. Businesses are starting to understand the importance of conversion rates, and they’re working hard to improve them.
It depends on your industry, the niche you’re targeting, and the type of product you’re selling. When it comes to conversion rates, there is no one-size-fits-all answer.
According to Kibo Commerce, the US average conversion rate for all industries is 2.3%. The report further details and differentiates between mobile, desktop, and tablet traffic.
According to the report, the average conversion rate for desktop traffic is 3%, while the average conversion rate for mobile traffic is 2%. The average conversion rate for tablet traffic is 3%.
As you can see, the average conversion rate varies depending on the traffic source. This is why it’s important to track conversion rates by traffic source. This way, you can see which traffic sources are performing well and which ones need improvement.
Shopify is one of the most popular ecommerce platforms in the world. They power over 500,000 businesses in 175 countries.
According to Shopify, the average conversion rate for all Shopify stores is 1.4%. However, they don’t release any further information on traffic sources or different industries.
It’s important to note that Shopify is just a platform. While the average conversion rate for all Shopify stores is 1.4%, many high-performing stores have conversion rates well above average.
For example, Gymshark, a popular fitness apparel brand, has a conversion rate of 6% to 10%. That means for every 100 visitors they get, 6 to 10 of them buy something from their store. So, while the average Shopify store has a conversion rate of 1.4%, some stores have much higher conversion rates.
Most e-commerce experts believe a good conversion rate is around 2%. However, this number will vary depending on the industry you’re in, the traffic source, and the type of product you’re selling.
For example, if you’re in a highly competitive industry like fashion, you might need a higher conversion rate to stay afloat. In less competitive industries, like B2B software, you might get by with a lower conversion rate.
The best way to determine if your conversion rate is good is to track it over time and compare it to your industry average. According to our experts at ConversonWise, a conversion rate of 2% is good, but there is always room for improvement.
Let’s say your conversion rate is 2.5%, which is good, but if it gets to 3.5%, which means you’re converting 35 out of every 1,000 visitors, then that would be considered excellent.
Do you see? With a 1% increase in conversion, an additional $925 in revenue was generated!
This is why conversion rate optimization is so important. A small increase in your conversion rate can greatly impact your bottom line.
So, we talked about what is an ecommerce conversion rate, the average conversion rate, what’s a good conversion rate, and how to improve your conversion rate.
Remember, a business’s conversion rate is the percentage of visitors who take the desired action, such as making a purchase or signing up for a newsletter. The average conversion rate for all industries is 2.3%.
The best way to determine if your conversion rate is reasonable is to track it over time and compare it to your industry average. A conversion rate of 2% is good, but there is always room for improvement.
If you want to learn more about conversion rate optimization or how to improve your ecommerce business, check out our blog. We post new articles every week!
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