Experts predict that by the year 2040, 95% of purchases will be via eCommerce. As new technologies arrive and the eCommerce landscape changes, online merchants must keep coming up with creative ways to keep the attention of consumers—who can easily bounce from site to site until they find whatever it is they’re looking for.
By looking at the most up-to-date eCommerce conversion rate benchmarks, businesses can set realistic expectations and develop new strategies for increasing revenue. This becomes especially important as brands prepare for Black Friday Cyber Monday (BFCM)—a four-day stretch where web traffic surges with online shoppers seeking to take advantage of limited-time deals and promotions.
Reflecting on your business’ performance over BFCM, or even 2020 as a whole, you might feel like you missed out on opportunities to expand your customer base and drive more sales. And even if your business saw a huge spike in sales last year, you’re probably still hungry for additional strategies that will keep you on a steady growth track.
There are many actions your business can take to stay ahead of the competition, improve customer engagement, and boost conversion rates. In this article, we’ll discuss the different types of conversions in eCommerce, how to calculate conversion rates, how to set realistic conversion-rate goals, and the common strategies brands are currently using to improve conversion rate optimization (CRO). So if you want to enhance your eCommerce strategy and get the most out of this year’s BCFM, keep reading!
Before we get into the relevant data surrounding eCommerce conversion rates, let’s make sure we fully understand the different types of conversions. Depending on their experience, consumers will convert into a marketing qualified lead (MQL) and/or sales qualified lead (SQL).
An MQL is anyone who has shown interest in purchasing by voluntarily engaging with your brand. In other words, they are open to the idea of a sale, but have not spoken with a sales representative or bought any products yet. Consumers are identified as MQLs if they take certain actions, such as:
An SQL is someone who has advanced beyond the engagement stage and has been identified by the sales team as a good fit for your company’s products or services. The next step is establishing a correspondence between them and a sales representative to close the deal. While your site may get many visitors, it’s important to keep in mind that most MQLs never convert to SQLs—typically because they don’t have the budget, authority to buy, or an urgent need for your products or services.
The first step in optimizing eCommerce conversion rate is establishing what exactly your business considers to be a “conversion.” In most cases, merchants define conversion as store transactions, but it’s not always that black and white. For instance, let’s say you’re a subscription service that offers a free trial, like Netflix. In this case, any user who signs up for a free trial could be considered a conversion, even though they haven’t paid any money yet. Some businesses may mark customers who simply add items to their cart or sign up for the email newsletter as conversions as well.
To get started calculating your eCommerce conversion rate, just use this simple formula:
Total number of transactions/ total number of website visits X 100 = conversion rate.
So if your site gets 25,000 visits and 1500 transactions in a month, then your monthly conversion rate will be 6%. Pretty easy, right?
Now that you know how to calculate conversion rate, let’s look at some data to see how your brand compares with other online merchants.
As of 2020, the average eCommerce conversion rate across all retail sectors sits at about 3%. Some industries are more mature in the eCommerce space than others. For example, consumers are more likely to go online to shop for gifts and clothes than they are for automobiles and furniture. Here is a breakdown of the average conversion rates by industry:
It’s also important to consider the country (or countries) your business is operating in. Different geographic locations have different eCommerce conversion rates. After all, consumer trends are not the same everywhere in the world. And certain countries don’t have strong enough infrastructures to handle the shipping requirements of high-demand products and services. Here are the average conversion rates in countries where people regularly engage in online shopping.
There are various ways a consumer can end up shopping at your online store, from finding it in a Google search to clicking on a Facebook ad. Understanding which avenues lead to the highest conversion rates will help you better focus your marketing efforts. Here are the average conversion rates by traffic source:
As you can see, having customers or businesses refer you to others is the best source of new leads. So if you were thinking about setting up a referral program, now might be the right time.
Finally, let’s consider the different devices consumers use to shop online. While more and more consumers are adopting new technologies to do their shopping—like smartwatches and voice assistants—the vast majority still use desktop computers, tablets, and smartphones. Here are the average conversion rates by device:
While the traditional desktop remains the most popular device for online shopping, it’s important to recognize that on Cyber Monday in 2020, 37% of purchases were made on a mobile device.
The importance of BFCM for online retailers cannot be overstated. These 4 days during the holiday season are often when businesses reach or surpass their annual revenue goal, as well as expand their customer base. Cyber Monday, specifically, is a time when many people buy gifts for loved ones online since they are usually working and don’t have time to go to physical shops. In 2020, due to COVID-19, many retail stores were closed—or offered curbside pick-up—resulting in an even bigger crowd of online shoppers.
In the US alone, online sales totaled $10.8 billion on Cyber Monday. Every year during BFCM, the average eCommerce website achieves a 459.3% increase in conversions. And it’s safe to say that this trend will not fizzle out in the years to come. This forces merchants to ask themselves: How does our BFCM performance stack up against our competitors? What can we do to be better prepared for next year?
Going into BFCM with a solid CRO strategy can be the most important thing your business does all year. And teaming up with an eCommerce agency like Codal will give you the tools necessary to succeed.
There are many steps you can take to enhance CRO for your business. After working with many online merchants, these are a few of the tricks we’ve learned along the way that can make a huge difference:
Consumers are more likely to bounce if your website contains sloppy design, blurry images, and grammatically incorrect copy. Making sure the content on your site is pleasing to the eye and easy to interact with goes a long way. Also, keep in mind that an overload of content is unappealing to consumers, who want information delivered to them fast without having to do too much mental work. Strive to find a perfect balance of tight copy, high-resolution images, and perhaps short videos that explain your products and services.
No matter how good your content is, customers will inevitably have questions when they visit your website. And most people don’t have time to fill out a contact form and wait for an answer. Live chat and chatbot features provide a solution to this problem.
With live-chat solutions like Drift and Intercom, you can answer your customers’ questions in real time. And with chatbots, you can let AI do the work for you. Adding a chat feature to your website can certainly help reduce bounce rate and increase conversions. As more online stores implement this technology, experts predict that the chatbot market will grow to $9.4 billion by the year 2024.
When it comes to marketing your business, never be afraid to brag. 90% of consumers will read at least one online review before purchasing from an online or physical store. By providing positive reviews on your website, shoppers will feel more comfortable converting into paid customers.
The call to action (CTA)—a message designed to enable an immediate conversion, usually in the form of a clickable link—is a subtle, yet incredibly important part of digital marketing. Simply changing a CTA’s wording, font, color, size, or placement on the landing page can make a real difference in conversion rate. Try running A/B tests on your CTAs to see which versions prompt the most clicks.
If your customers have to work through a long, arduous checkout process, they are more likely to abandon their cart. There are several ways to make this experience easier for customers.
First, eliminate any unnecessary fields and keep it to the essentials—like name, country, and zip code. It’s also smart to include a progress bar. This allows your customers to know how long it’s going to take to finish placing an order, so they don’t exit out of fear that they are too short on time.
Next, implement guest checkout—the ability for customers to complete a purchase without having to create an account on your website. Again, adding more time to the checkout process can only hurt your conversion rate, so don’t make your customers come up with a username and password during their first purchase. Repeat customers, however, will appreciate the option to set up an account, since it means they won’t have to re-enter their information each time they make a purchase. In other words, it’s best to offer both options.
Finally, add as many payment options as possible. Some people prefer Visa while others prefer PayPal or Amazon Pay. And if your checkout system doesn’t accept a customer’s preferred payment method, you’ll very likely lose the sale. In fact, 50% of online shoppers will end a transaction if their payment method of choice is not available.
Consumers can be turned off by the cost of shipping. In many cases, online shoppers will abandon their cart, hop in their car, and go buy a similar item at a store to avoid paying for shipping. If you offer free shipping year-round, or even just during BFCM, your business is likely to see higher conversion rates. This, of course, means the shipping costs will come out of your own pocket, so you’ll have to do the math to see if it’s worth it.
Landing page countdown clocks do a good job of creating urgency in the mind of the consumer. This is a popular tactic that online retailers use during BFCM to increase sales. By reminding shoppers how much time is left on certain discounts and promotions, they are more likely to pull the trigger on a purchase.
If you’re interested in learning more about what your customers want, try asking them directly. After they make a purchase, you could send them an email with questions regarding how their experience could have been better. This is a great way to get to know your customers and improve the overall user experience.
Here at Codal, we’ve worked with businesses large and small across a wide range of industries, helping them to improve their eCommerce presence and drive more sales.
We’d love to learn about your business and discover new ways to enhance your customer experience. With our web development and UX design expertise, we’ll put together and execute a plan that prepares your online store for BFCM, reduces bounce rate, and takes your eCommerce conversion rate to new heights.
Are you interested in learning more about how to boost your eCommerce conversion rate? Reach out to Codal today!