Why are ecommerce conversion rates so low

Conversion rate optimization in eCommerce: How to turn more visitors to your shop into customers

You invest a lot of time, money and energy in founding and developing an online shop. First you need to decide what you want to sell. Then determine how you will source your products, set up the ordering process and place advertisements to attract visitors to your website. And then sit back and the money will pour in ...

… Not.

In an increasingly competitive digital online world, there are some dos and don'ts when it comes to getting customers to buy items from your online business. Because no matter what type of product you sell, every online retailer has the same goal: to sell more of it.

This eventual sale of your goods is called “conversion” because you are converting the Visitors to your shop in a Buyers of your products. The more visitors you convert into buyers - i.e. the higher your conversion rate - the more sales you generate.

This makes the conversion rate one of the most important metrics for your online shop.

The definition of conversion rate is: buyer divided by user. An example: 2 buyers / 100 users = 2% conversion rate. Most online shops have a conversion rate of around 2%. 50% are worse, but 50% are also better. Depending on the industry and niche, the value naturally fluctuates greatly. It is important that you optimize them continuously.

If your online store's conversion rate is low, it is high time to optimize it. The key to better conversion rates is a fulfilling shopping experience for your customers. This means that you have to offer your target customers what they need and are looking for; an intuitive user experience that enables them to find the product they want and buy it without much hassle.

The great thing about conversion optimization is that small changes often lead to significant results. A day on which you check and update the category structure of your website, for example, can lead to a permanent increase in conversion, which has a direct positive impact on margins and profits.

In the following, we will go into which optimizations you can make for your online shop and how you can convert even small adjustments into a holistic, significant increase in the conversion rate - and thus your sales.


Before we start: Are you pulling the right revenue lever?

Many online retailers are unaware that they can only influence three factors to increase sales:

  1. Number of customers
  2. Average shopping cart size
  3. Frequency with which a customer orders in your shop (regular customer rate)

There are no more factors - more “leverage”. Yes, there are many ways to influence these factors, but in the end, “more sales” always boils down to one, two, or all of these levers. Working on your conversion rate means pulling the first lever. But is the number of your customers really the most effective factor for increasing sales for your online shop at the moment? You can easily find the answer to this question with the help of our odds calculator. This gives you an exact picture of how your sales, costs, margins and profits will change if you pull on one or all of the three levers for more sales.

So before you read on, first check with our odds calculator whether it is actually the most effective that the Number of your customers to increase.

If it turns out you're better off yours average shopping cart size should screw, read on right here.

Or maybe the third lever is yours Regular customer rate, currently the most effective influencing factor for more sales in your online shop? Then read on here.

What is a “good” conversion rate in eCommerce and how is it calculated?

The calculation of the conversion rate of an eCommerce shop is basically based on a simple formula:

Conversion rate = (number of buyers / number of shop visitors) * 100%

For example, if your shop had 10,000 visitors and 300 buyers in the last month, your conversion rate would be 3 percent.

This is the most basic conversion rate calculation for any online shop. However, it can be broken down further to the steps that your visitors go through until they click on “Buy”:

  1. Add to shopping cart
  2. To checkout / checkout
  3. Buy / Buy

The individual conversion rates and their calculation can be represented as a funnel:

Calculation of the different conversion rates

Read more about the individual conversion rates, which percentage is “good” in which step and what influences the conversion rate in the individual steps.

But what is one now quality Conversion rate? Unfortunately, this is not that easy to answer, because there are significant differences in the conversion rate between industries, countries, seasons, devices and more. For example, in July 2018, the typical UK conversion rate for the apparel and accessories market was 1.41 percent. In comparison, the conversion rate for agricultural products was 0.58 percent.

Therefore, it is beneficial to set your own Key Performance Indicators (KPIs) by looking at the average eCommerce conversion rate in your industry, taking your own data into account as much as possible.

Also, you should always be careful when making comparisons with the competition. Amazon, for example, has an average conversion rate of 13 percent, which is almost seven times the industry average. On the one hand, this is due to the fact that Amazon improves the conversion rates every day through split testing, but also because people visit Amazon, because they want to buy something. The traffic is of a high quality.

Average eCommerce conversion rates by industry and country

When developing goals and internal benchmarks, conversion rate standards are a valuable source of data for measuring the overall performance of an eCommerce shop. Growcode has clearly summarized the eCommerce market data provided by IRP Commerce on the subject of conversion rate in 2020 per industry.

With 4.01 percent stands Arts & Crafts clearly ahead at the top Electronic articles with 2.7 percent, while the category Baby & Child With 0.71 percent brings up the rear:

In addition, when setting your own KPIs, it is important to take into account the benchmark conversion rates of each country, which has the following averages for 2020:

It can be particularly useful to develop language and country specific KPIs for segments of your customer base. It may also be necessary to change KPIs based on industry benchmarks when serving a market with a lower overall conversion rate. As always, it is important that these key figures inform and not define your goals.

Step 1 to increase the conversion rate: User-friendly design of the shop

Put yourself in the shoes of a visitor to your online shop: how easy would you find your way around? How easy is it to find and order the product you want? How clear and aesthetically pleasing is the shop?

UX designers agree: less is more. Or, in a nutshell: the easier the website is to navigate, the greater the likelihood that the visitor will stay and buy. Also, customers are more likely to return to a user-friendly website.

Depending on its size, an online shop has many individual components that can be optimized:

  1. Clear shop structure and product pages
    Did you know, for example, that it makes sense to adapt your product page layout to that of Amazon?
  2. Easy to understand ordering process
    The fewer steps and entries a buyer has to make in the ordering process, the lower the probability of a cancellation.
  3. High quality pictures and videos
    Touching it and looking at it from all sides does not work when buying online. Your pictures and videos have to present your products in the best possible light.
  4. Detailed product descriptions
    Make sure that all specifications that are of interest to the customer are given. The more detailed the description, the better the picture he can get of the product and its use.
  5. Competitive prices
    The price is one of the most decisive factors for or against the decision to buy. Especially in highly competitive industries such as electronics and beauty, you can only convince customers to order if they cannot find the same product at a better price in another shop - even if you offer better conditions for returns or shipping. You can automate competitive prices, for example, through dynamic repricing, as offered by BENY repricing.
  6. Extensive search function
    A good search function offers an excellent user experience - but only if the search works correctly and delivers the desired results to the customer.
  7. Optimized for mobile devices
    Experts predict that in 2021 a good half of all eCommerce sales will be attributable to mobile commerce. A market share that no online retailer can ignore.

Step 2: trust is good ...

One of the biggest barriers preventing a visitor from making a purchase is trust. Or rather a lack of it. Until the customer trusts you and your shop, the probability of a purchase is almost zero - no matter how extraordinary your products are.

So it is important to overcome the “threshold of trust” of your customer. You can achieve this in different ways with your online shop.

  1. Surprisingly good customer service
    The easier it is for your customer to answer questions and troubleshoot problems, the more likely they are to get an order through to the end. From chatbots to live chat and FAQs to the well-known call center, there are a number of ways in which you can be there for your customers and offer excellent service.
  2. Easy (and best of all, free) returns
    Buying things online is associated with a higher risk of displeasure, as products cannot be touched, tried out and viewed from all angles beforehand. When a shop offers the return option, buyers have greater confidence in their choice.
  3. Product reviews
    Customer ratings are the best sellers and the most important buying impulse for Germans. Reviews are particularly important for more than 75 percent of shoppers in unknown shops. Find out here in detail how and why reviews create so much trust.
  4. Testimonials
    Testimonials are reviews from third parties who speak out in favor of a product and thus increase the credibility of an advertising message. Read here 6 tips for effective testimonials on your website.
  5. Trust Seals
    Trust seals are usually placed on the website in a way that is directly visible to visitors, such as here on our own homepage under “We work with brands like”. The logos of mainly well-known brands give credibility and trustworthiness.

Step 3: ... control is better

If you are one of our regular readers, you already know that you have to continuously test and optimize in order to get the most out of your shop, step by step. This also includes tests to optimize your conversion rate.

For example, A / B tests often produce surprising results and challenge the assumptions we make about our content. Because of this, they are an essential part of optimizing the conversion rate. In A / B testing, hypotheses are first created about possible changes to the pages, which are then tested on the website.Here 50 percent of the visitors see the original page, 50 percent see the new page, which is supposed to test the hypothesis.

A great example of a simple customization that resulted in an instant improvement in conversion rate was demonstrated by Vanity Planet, an online beauty products distributor. The company decided to add curated Instagram photos of happy customers to the product page of a specific skin brush and tested the deviation from the original page. The experiment was a remarkable success. Vanity Planet tested 6,000 visitors within 10 days. By optimizing their website, Vanity Planet achieved an increase in their conversion rate of a staggering 24 percent, which meant an additional USD 8,900 in sales for this product in the 10 days.

Read here how SCHWUNGVOLL (formerly Xciting Webdesign) was able to help a precious metals dealer achieve higher conversion rates with A / B testing.

Step 4: reactivate shopping cart abandoners

More than 69 percent of your customers will add products to their shopping cart and abandon their purchase. There are legitimate reasons for this. In Germany alone, this means a total annual loss of between 500 million and 1 billion euros for online retailers.

With your Google Analytics account, you can check how many people put something in the shopping cart and how many of them actually complete the purchase. You can even check your conversion rates between “Add to shopping cart”, “shopping cart” and “order overview” to “order placed”. This analysis can show you at which step the potential customers tend to get out and not buy the goods after all. This can help determine where you need to optimize the ordering process.

Back to the abandoned cart. How do you encourage people who abandon the purchase process at the last moment to buy?

This can be done, for example, via reactivation campaigns via email or Facebook. With a series of automated emails, you can encourage these abandoned shopping carts to resume the order process and still click on "Buy". Be sure to include a direct link to the buyer's shopping cart in these emails to make completing the order as easy and convenient as possible.

Read here in detail how you reactivate shopping cart abandoners and thus increase your conversion rate.

And what do you do now with the new customers?

Optimizing your conversions doesn't end with the first sale. Not even with the hundredth or thousandth - that's when all the measures really start to bear fruit. Small tweaks can seriously improve your bottom line. So the motto is: keep going.

And move up to the next level by also turning to the other two levers for more sales in eCommerce.