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E-Commerce Conversion Rates – Where Should Yours Be?




Since COVID forced the world inside their homes, the online shopping market has grown at record speeds, and it shows no sign of slowing. With the exponential growth of e-commerce, online businesses and brands need to be vigilant about their actions and strategies, which means focusing on conversion rate optimization (CRO).

To determine your optimal conversion rate, you’ll need to understand what a conversion rate is, why it’s essential, and which factors affect e-commerce conversion rates. 

What is an eCommerce Conversion Rate? 

A conversion is any desired action taken by the customer and a conversion rate is the rate or percentage of potential or existing customers that take said action within a specified period of time. An eCommerce conversion rate is just the conversion rate on an eCommerce site or platform.

An e-commerce site might designate any of the following as conversions:

  • A sale of a product or service.
  • Add products to a wishlist or cart.
  • Signup by a user on the e-commerce platform.
  • Any other user action that makes sense for your company.

Generally speaking, the more traffic you drive to your site, the higher your chances of converting visitors — but this isn’t always true. Countless factors can affect a user’s journey from the first visit to conversion. That’s why it’s imperative to use conversion rate in conjunction with other critical metrics to gauge what’s working and what isn’t. 

Why is My Conversion Rate Important?

Conversion rate measures what happens once users are actually on your site. It can be used to test the effectiveness of certain initiatives like marketing campaigns and tweaks to the UI/UX and the attractiveness of your offer and overall product quality. The reason conversion rate is a more accurate indicator of performance than conversion count is that a robust marketing campaign could send more potential customers to your site, increasing the number of overall conversions. But if the marketing effort wasn’t well-targeted or your UI/UX leaves the customer confused or doesn’t present your product attractively, you could actually convert a lower percentage of visitors. And the lower your conversion rate, the more money you have to spend to make a sale.

Conversely, if both your conversion rates and conversion counts are higher, you know your UX design is working, and your marketing message is reaching the right kind of customers. 

Perhaps the biggest reason to increase your conversion rate(s) is important is: increasing your conversion rate can increase your profit.

If you can make more sales off of existing marketing efforts by tweaking your UI/UX, or by retargeting your marketing to reach people more likely to purchase, then you will have to spend less to make each sale. And the less you spend on each sale, the more profit you turn.

What are the Biggest Factors that Affect Conversion Rate? 

Now that you understand what e-commerce conversion rates are and why they’re so important let’s explore some of the most significant factors that affect conversion rates. 

Poor UI/UX Design

No doubt about it: design decides whether a web page is going to convert or not. When working on UI and UX, designers should think about user engagement, usability, and the overarching conversion goal; specifically, what are you trying to get visitors to do? Based on input data like buyer persona profiles and conversion goals, designers can start developing an effective UI/UX design. 

Here are a few quick tips that can help designers to come up with effective UI/UX solutions:

  • Know the goal.
  • Make the design responsive.
  • Know what users expect. 
  • Balance brand and user goals.
  • Test.
  • Iterate, then test again. 

Traffic that isn’t Relevant

What’s better: Getting more traffic in hopes of more leads or increasing the conversion rate with current traffic?

Answer: It doesn’t matter unless you’re driving the right (i.e. relevant) traffic to your site. 

If you’re trying to increase conversions, first check the quality of the traffic your web pages are getting. If the traffic is targeted, meaning you’re attracting people who belong to desirable cohorts, focus on optimizing your site and customer journeys for conversion. On the other hand, if your conversion rate is high and you can’t think of any changes that can improve it, look at your PPC campaigns to drive more traffic. 

Your chances to convert users into customers are pretty high if those users are potentially interested in your service or product. Wasting your marketing spend on fake or irrelevant traffic will only cause a high bounce rate. So, as a rule, always check the traffic quality and relevance consistently. 

Having a Poor Offer 

Do you feel like your product or service offer is attractive? Today, when the marketplace is saturated with different services and goods, it’s harder than ever to find something truly unique and exceptional. So if the offer your company makes isn’t valuable to your target audience, then all the marketing and design efforts made towards CRO will be useless. 

From the very start, list the benefits your users get from your service or product and define the advantages that distinguish you from your competitors. In other words, establish your value proposition. Then make it obvious.  

Ask someone to look at your web pages to see if they effectively communicate your unique value proposition (USP). If people can’t tell you in just a few words what you’re offering and what they can gain from your specific offer, then you should revise your site. 

Make sure your value proposition touches on the following:

  • What your service or product does.
  • The value you can bring.
  • What makes your offer different from competitors.
  • Who will benefit from your offer?

Your promise should be precise and manageable, especially since it determines the potential of your conversion rate. 

No Security At All

If your website has no security for customers they would be afraid of sharing their personal details on your website. As a result, it will bring the conversion rate drastically down. To avert this situation, you need ideal security for your website like an SSL certificate. You may wonder which SSL cert would fit with your site? The answer is the number of domain/subdomains. For example, if you run an eCommerce website then, a wildcard SSL like Globalsign wildcard, rapidssl wildcard, comodo positivessl wildcard, Thawte wildcard are a few well-known certificates in the industry.

How To Calculate Conversion Rate

So, how exactly do you calculate your conversion rate? Here are three simple conversion rate formulas to use:

  • Conversion Rate = (Total number of conversions / Total number of leads) X 100
  • Conversion Rate = (Total number of conversions / Total number of sessions) X 100
  • Conversion Rate = (Total number of conversions / Total number of unique visitors) X 100

All three of these conversion rate formulas are valid. The best way to calculate your conversion rate depends on what exactly you are defining as your conversion event and how you plan on measuring your traffic. The numerator is the number of conversions (i.e. the action you’re measuring), and the denominator is your total pool of traffic (which is generally leads, session count, or unique visitors). 

Here is a quick example for calculating conversion rate:

If your online store receives 5,000 visitors and 50 conversions for a set period, that means your store’s conversion rate is 1%.

Simple as that — divide conversion into visitors, and you have your conversion rate. 

The Bottom Line

Tracking your eCommerce conversion rates is essential to understanding  health, the quality of your product, your UI/UX design, and the effectiveness of your marketing campaigns for your e-commerce site and business. Kissmetrics is an analytics tool that makes it easy for you to not only track conversions, but also understand who your customer is, where they come from, what they buy and the most effective customer journey for your site. 

Ready to see for yourself? Request a demo with us today.



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