A beginner’s guide to measuring and improving ecommerce conversion rate

Optimizing your ecommerce conversion rate is the most efficient way to increase revenue and profitability.

What is conversion rate, and why is it important?

Conversion rate is one of the most important ecommerce KPIs you can track and optimize. Essentially, it grades your ecommerce website’s ability to close a sale. 

But what exactly does it measure? The short version is that conversion rate shows the rate at which users convert. Here’s the longer version:

What are conversions?

conversion rate % = total conversions / sessions x 100
*in the context of ecommerce, conversions usually mean sales.

In digital marketing, conversions are marketing goals: a conversion is short-hand for the desired action for users to take on your site. In the context of ecommerce, conversions are almost always defined as sales.  

But while sales are almost always a set conversion, not all conversions are sales. Because multiple conversion types are possible, you might assign conversions to: 

  • different goals: such as signing up for your newsletter or booking a call with a sales representative
  • different stages in the sales process: like clicking on a product detail page, or adding an item to the shopping cart 

The former can help you measure your site’s performance according to other marketing goals, such as interest or engagement. The latter can give you a more precise understanding of what the obstacles to purchase completion are.

What is conversion rate, and how can you measure it? 

Conversion rate is the percentage of sessions to your website that result in a sale

Before you can measure your conversions or conversion rate, you have to be sure that your ecommerce channel is tracking them. That requires tracking sessions and conversions (sales) and reporting the resulting conversion rate. You’ll find the formula at the top of this post.

If you are selling on marketplaces, like Amazon, or using an ecommerce platform like Shopify, you won’t have control over your access to conversion information: either it’s provided to you or it isn’t. (If you’re wondering, here is where you can find your conversion rate on Shopify, and on Amazon.)

Selling from your prioprietary website is where things are much more flexible but also a bit more complex. The data’s all yours! Meaning that in this case, it’s your responsibility to track conversions, which requires some setting up in Google Analytics. 

If you don’t yet have Google Analytics installed, you should start here.

Finally, don’t feel daunted. Google Analytics set up is much simpler than it seems once you get started. And, even a basic understanding will pay dividends.

Eventually, you can install alternate views, giving you the chance to see users’ onsite activity through the lens of different conversion goals beyond just sales. 

What is a “good” conversion rate? 

So you’ve installed Google Analytics, set up sales and conversions, and are successfully tracking this metric as a KPI. That’s enough to know it ought to be optimized, but by how much? In other words, how can you tell if your conversion rate is any good?  

To answer this question, you have to look outside your own account and compare your KPIs with your competitors’—by benchmarking your conversion rate against others in your industry and market.

Industry2021 Ecommerce Conversion Rate
Home and Garden1.30%
Home Improvement1.50%
Consumer Electronics1.70%
Jewelry and Luxury Products1.90%
Fashion and Apparel2.50%
Gifts and Flowers2.50%
Beauty and Cosmetics4.80%
Food and Drink5.20%
Source: peekd Benchmarking for USA Market

Above, you’ll find the average conversion rates by industry for ten of the top ecommerce industries. If you are selling products in any one of these categories, a percentage above the one listed above indicates a better-than-average conversion rate. Conversely, below indicates a lower-than-average conversion rate. 

If you don’t see your industry or want to compare seven of the most important ecommerce KPIs to your competitors’, you can get free access to peekd Benchmarking’s “You vs Industry” dashboard:

Preview of peekd Benchmarking's You vs The Industry dashboard: comparing ecommerce KPIs like conversion rate to your competitors'
A look inside peekd Benchmarking‘s You vs Industry dashboard: this computer hardware brand based in the UK is fairing better than average overall, with a conversion rate 0.96% higher than others in their industry.

While industry average is a great starting point, expect conversion rates to vary significantly over time and by: 

  • channel or traffic source
  • device, and
  • audience 

Beyond understanding the efficacy of your site as a sales tool, a more detailed look at conversion rate can help you improve your overall marketing strategy.

If your conversion rate from a given source is strong, this validates both that your landing page and website is working effectively but also that, through this channel, you are reaching the right audience: made up of users who are more likely to complete a purchase

peekd Benchmarking: Fashion and Apparel conversion rate in the United States over time, by channel, and by device.
A snapshot: Fashion and Apparel Ecommerce in the United States in 2021. The highest conversion rate comes from (unpaid) referral links, suggesting word-of-mouth marketing remains invaluable to this industry.
Source: peekd Benchmarking

Ecommerce conversion rate should also be a grounding element for evaluating other metrics in ad performance. We might be tempted to optimize click-through rate, for example. Not a bad idea. This metric validates an interest in your ad and presumably, your product. But, ultimately, if that interest doesn’t result in a sale, that’s not likely to be your top channel or target group.

And, speaking of groups, learning conversion rate by audience will tell you which age and gender demographics spend more and spend more often. This is invaluable information to inform your most profitable personas. 

This just in: we’ve added audience insights to the You vs Industry dashboard in peekd Benchmarking. You can try it for free.

Finally, ecommerce conversion rate by device is likely to reveal the context in which purchases are made which can help you answer the question: what do users want when they visit on mobile versus desktop?  Understanding this brings us halfway to optimizing for it: by removing any impediments users may face on the way.

How can you improve your conversion rate, or implement CRO?

Improving your conversion rate is such a common marketing goal that it is an entire profession with its own acronym: CRO, which stands for conversion rate optimization. 

We’ve talked before about how at the core of conversion rate optimization is removing obstacles. You want to make it as easy as possible for users to perform the task you’d like them to do (it’s only fair). Here’s what we suggest, in order of importance:

1. Get the fundamentals down: prioritize site functionality and quality

Enhance website speed

Put simply, your ecommerce page load speed is synonymous with a lower bounce rate and a higher conversion rate.

Even a one-second delay decreases conversion rate by 7%, and 18% of shoppers will abandon their cart if pages are too slow, as per recent studies.

The best way to start speeding up your pages is to use PageSpeed Insights. This free tool from Google will give you a list of useful recommendations (as “opportunities” and “diagnostics”) that you can implement straight away.

For instance, you likely have heavy image files that are yet to be compressed using an image compression tool. Or, you may have suboptimal code. With actionable advice from PageSpeed Insights, you can strategize which areas/pages of your website can be optimized for speed, and thus, conversions.

Improve navigation and UX

If your visitors can’t easily browse through your website and go from one page to another, they’re less likely to stick around, let alone convert.

So the key to a better conversion rate is to ensure you have an intuitive and seamless website navigation structure.

To find out if your navigation and structure need work, consider benchmarking your bounce rate and session duration against others in your industry. A lower-than-average score suggests there’s potential for improvement. For the basics on optimizing these metrics, start here.

Implement high-quality content

In the ecommerce realm, a picture’s worth a million words.

One of the biggest snags with online shopping is that potential customers can’t touch or try your products, which means it’s often difficult for them to understand what they’ll get if they choose to finalize a purchase.

In other words, if you don’t provide clear, high-resolution images that give your prospects a better “feel” of the product, they’re less likely to convert.

Thus, make it one of your biggest priorities as an ecommerce marketer or business owner to upload high-quality, zoomable images from multiple angles. See Banana Republic’s example below.

Banana Republic ecommerce example: high quality imagery to enhance conversion rate
Source: Banana Republic

Just be sure to compress and optimize all images for optimal page load speed and SEO.

If you have the budget, take it a step further with product videos. Here are a few low-cost, high-return ideas to include videos for a higher conversion rate:

  • Short clips about your product’s main features or benefits
  • How-to videos and ideas to make the most of your products
  • Quick reviews from happy customers

Here’s a list of easy-to-use video marketing tools to get started creating such videos.

To support those stunning visuals, you’ll want to invest in quality copy. Don’t copy-paste manufacturer descriptions, as they’re not optimized for conversions or search engines. Rather, differentiate your brand by taking the time to craft unique and persuasive product copy for each product.

Here are a few tips to write a compelling product copy that drives conversions:

  • Keep it short and sweet.
  • Break up the description with H3s, H4s, and bullets for easy skimming.
  • Highlight the most compelling features and benefits of the product so customers know why the product is perfect for them.
  • Share only the most important technical details that help make an informed decision.
  • Reduce buyer hesitation by specifying any warranty or guarantee you offer.
  • Keep the tone casual and straightforward, avoid jargon.
  • Try to anticipate and address potential questions or doubts with a quick FAQ section.

2. Make it easy to purchase quickly: optimize payments and checkout process

This is such an important step that it might arguably take the top spot. However, we’re confident keeping it here for the following reason: there’s no point making purchases easy if users don’t stay on your site long enough to add something to their cart.

There are many ways of doing this, but here are a couple to get your creative juices flowing.

By providing multiple payment options

According to a study by Baymard Institute, 7% of shoppers abandon their cart during checkout simply because “there weren’t enough payment methods” — imagine getting a prospect all the way down your conversion funnel only to disappoint them at the last step.

So, speaking specifically of cart conversions, providing as many payment methods as possible is key to conversion optimization. Here’s an extensive list of payment methods you can consider adopting on your ecommerce site.

By optimizing the mobile experience, too 

Never underestimate the potential of your mobile site. For this entire list of conversion rate optimization recommendations, we do mean mobile too.

Making mobile purchases simple is akin to seizing sales opportunities that you may not get again. A quick process is likely to mean more luck with impulsive shoppers.

And, remember that over half of your traffic probably comes from a mobile device. Couple that fact with Google’s mobile-first indexing, and making your site’s mobile-friendliness a top priority becomes inevitable to improve your conversion rate.

While stores hosted on renowned platforms like Shopify, WooCommerce, and the like are inherently mobile-friendly, it’s still a good idea to ensure your website is fully responsive. In particular, check for the following:

  • Blocked JavaScript, CSS, and image files
  • Unplayable video content due to Flash
  • Illegible fonts or font size
  • Difficult-to-use navigation menu (consider using a hamburger menu)
  • Touch elements too small or close to each other
  • Autofill for contact forms

3. Inspire confidence in your product and brand: use social proof and stellar service

With reviews and ratings

More credibility equals more conversions. Credibility comes in many forms, such as product reviews, customer testimonials, social shoutouts, success stories, and even an SSL certificate.

In fact, 69% of online shoppers want more reviews from ecommerce websites, and 77% of customers read product reviews before making a purchase.

So, reach out to your customers using the email address they shared during checkout and request them to spare a few moments to drop an honest review. Consider sharing incentives such as a coupon code for their next purchase, this would also boost customer loyalty.

Display these reviews prominently on your product pages to nudge more conversions. Besides, showcase clear contact information and policies (shipping, returns, exchanges, etc.) on all pages, along with your brand’s backstory, mission, values, and team on your “About” page.

With (thoughtful) product recommendations 

The more relevant your product recommendations, the more likely people are to convert. So how do you recommend the most relevant products to your visitors?

One way is to use an AI-powered recommendation tool that makes use of past orders history, browsing behavior, and related products data to show fitting suggestions that people might find interesting and convert-worthy.

Another way is to have a live chat and/or intelligent chatbot to proactively start a conversation with visitors, share recommendations, and guide customers through your store. For example, Sephora’s Kik bot proactively opens with a quick quiz to learn about the visitor’s makeup style.

On product pages, it’s also a good idea to manually place relevant or complementary products at the bottom of the page for cross-selling, similar to Amazon’s “Frequently bought together” or “You might also like…” suggestions.

4. Incentivize buying: but do so sparingly

By Igniting a sense of urgency

Creating time-sensitive deals is a tried-and-true tactic to get your visitors to convert. Plus, it’s also a neat way to nudge people to buy more.

Here are a few ways to ignite a sense of urgency and scarcity:

  • Create short-term discounts (say with a 12-hour window) on certain premium products.
  • Display a countdown timer or the real-time inventory status of your products (such as “Only X left items in stock”).
  • Leverage price anchoring (see Amazon’s example below) so your audience can appreciate the amount they’re saving if they convert fast.

Time-sensitive deals are a nifty way to boost conversion rate and AOV during slower seasons. And they’re easy to execute.

This recommendation comes with a caveat: don’t get too carried away. Time-sensitive calls to action can sometimes veer into “hard sell” territory. It’s important to understand this approach won’t speak to everyone and may tarnish your brand’s identity.

As always, put the user at the forefront of your mind when working to improve your ecommerce conversion rate. It might be helpful to think of optimization techniques as ways to improve the experience of doing something they’d already like to do: buy your product.

By crafting compelling CTAs

CTAs are the gateways to conversions. And your website is packed with CTAs — to subscribe to your email list, add products to cart, save products for later, get in touch with you, share your blog posts, browse your best-sellers catalog, and so on.

From the usual “Add to Cart” buttons to “Sign up for 10% off!”, here are a few tips to craft high-converting CTAs:

  • Make them prominent and large enough to be instantly visible upon landing on the page.
  • Use a contrasting color to make the CTA stand out from other elements.
  • Write a clear, crisp (at most five words), and benefit-driven copy with action words such as “Get”, “Save”, etc, along with supportive copy such as “Free delivery”, “Easy returns”, etc. See ASOS’s example below.
  • Have some white space around the CTA so it doesn’t appear crowded.

Moreover, follow the page’s flow and place CTAs where your audience’s attention will naturally go, such as to the right of the product description, or at the bottom of articles encouraging readers to check out relevant products or sign up to your newsletter.

Know that there is such a thing as too much creativity in the call-to-action crafting department. Consider our straight-forward recommendations and remember to balance eye-catching incentives with clarity, catering to users’ intuition.

By implementing (conditional) free shipping

When you see “Free shipping” on a website, you’re automatically better inclined to buy. Simple as that.

But we know, offering free shipping is not always feasible. So, consider offering free shipping with threshold conditions that incentivize people to convert with a higher order value.

For example, let’s say your store’s current AOV is $50. Raise it by 30% and it becomes $65. Now, set your free shipping minimum order amount at $65. Make sure to display this offer as a prominent banner throughout your store: on the homepage, product pages, and during checkout.

If the sky-high subscription rates to Amazon Prime have taught us anything, it’s that free shipping can be a super compelling sales tactic. In fact, it may be worth building in the cost of shipping to your existing item prices in order to afford offering the this incentive.

5. Test, test, test.

Test variations

With a number of beginner-friendly split testing tools like Google Optimize and Optimizely available, there’s no reason to not run split tests on various elements of your product, category, and checkout pages for continuous conversion rate optimization. Some such elements include:

  • Call to action color, copy, and placement
  • Length of the product description
  • Number and types of images
  • Number of form fields on the checkout page
  • Single-page vs. multi-page checkout process

Keep the following best practices in mind for effective split testing:

  • Run each test long enough (at least two weeks) to get meaningful data about each variant’s conversion rate performance.
  • Test no more than a single element per page in one go.
  • Set the winning version as your new control and split test another element for continual conversion rate optimization.

Dive deeper into ecommerce split testing with this great guide from VWO.

Test new elements, like pop-ups

No, not the usual pesky pop-ups that show up randomly while you’re browsing a page. We’re talking about exit-intent pop-ups that aren’t as pesky and have a rather impressive conversion rate of 9.28%.

Exit-intent pop-ups help reduce bounce rates, recover abandoned carts (with relevant offers), and collect visitors’ email addresses for lead generation.

Final word on ecommerce conversion rate and CRO

Now you know the meaning of ecommerce conversion rate, its importance for your business, industry benchmarks, and some top ways to optimize your website’s conversion rate.

It’s time to put your learnings into practice. With an ecommerce intelligence platform like peekd, you can easily see how your conversion rate stacks up with your industry peers. Try peekd for free to benchmark your ecommerce KPIs and stay on track for growth.

So, what’s your website’s conversion rate? How are you planning to optimize this metric? Let us know in the comments!

Juliana is a marketing leader and data intelligence enthusiast with 10 years of experience in e-commerce performance. Having worked as a consultant for a range of consumer goods clients she has a passion for sharing knowledge about how data-informed actions lead to online sales growth.
Juliana is a marketing leader and data intelligence enthusiast with 10 years of experience in e-commerce performance. Having worked as a consultant for a range of consumer goods clients she has a passion for sharing knowledge about how data-informed actions lead to online sales growth.
Our articles delivered once a month to your inbox
Thank you for subscribing! ✅
Subscription implies consent to our Privacy Policy

Related articles

Start growing with peekd today