Just over two out of 100 customers will put items in their digital cart and actually make a purchase — specifically, 2.5%. This is the average conversion rate for ecommerce transactions, according to industry benchmark data from Kibo.
Boost this rate, and revenues increase. But it’s not always so simple.
This post will help you understand what factors impact this rate, such as how to account for geographic differences. Plus, outline steps you can take to drive up ecommerce conversion.
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The average ecommerce conversion rate represents the number of orders per visitor on your site. An order is a purchase transaction, regardless of how many items are sold at once.
So if a consumer buys two of the same product — or 10 different products in a single transaction — it’s still considered one order.
Conversion rates are also calculated on a per-visitor basis. Let’s say your store sees 1,000 visitors in one day. Of those, 400 “bounce” off your website without taking action or clicking through to other pages, and 500 browse product pages before leaving. Just 100 put items in their cart, and only 20 carry through to make a purchase.
Even though half of the visitors displayed some interest in your offerings and 10% of the total went as far as to put items in their cart, just 20 in 1000 made a purchase. As a result, your conversion rate is 2%.
Conversion calculation speaks to the fact that while intentions on the part of users — such as clicking through to product pages or adding items to their carts — indicate that brands are making online inroads, only transactions count when it comes to revenue.
Depending on the size and location of your target audience, your conversion rate may vary.
According to the Kibo data, the aggregate conversion rate is 2.5%; however, the U.S. rate is slightly lower at 2.3%. In Europe, the Middle East, and Africa (EMEA), the average conversion rate for ecommerce is just 1.5%, but in Great Britain, it’s 4.4%.
These differing rates reflect differing preferences among consumers.
Consider sustainability. According to Just Style, 72% of customers in the U.K. say that sustainability claims must be backed up by meaningful action before they make a purchase. However, as noted by Sustainable Brands, U.S. shoppers are also looking for more sustainability from brands — but 78% aren’t sure how to determine which organizations are environmentally friendly.
Cart abandonment is another consideration. In countries across the Asia-Pacific (APAC) region, cart abandonment is a common problem. The biggest culprit? Not offering payment options for local currency.
As noted by PYMNTS, 41% of companies selling to APAC customers without local payment processes say their cart abandonment rates are more than 60%. In other markets, however, such as the European Union (EU) and the U.S., global credit or debit cards are commonplace.
When it comes to boosting conversion rates, product and retail brands need to recognize that there’s no silver bullet. No single website change or improved purchase process will help rates skyrocket.
Instead, increasing overall conversion rates requires a multi-pronged approach that helps reduce potential sales loss at every step in the customer journey.
Here are four ways companies boost their average ecommerce conversion rate.
First up? Create a search engine optimization (SEO) strategy to help more visitors find your site. More visitors mean more opportunities for page views, shopping cart additions, and, ultimately, orders.
In practice, creating an SEO strategy starts by identifying your optimal keywords. These are terms that reflect your brand mission or product portfolio and have high search volumes. Tools like Google Trends can you discover what keywords are trending and which are experiencing a decline.
Next up is product page content. When users browse your product pages, they’re looking for consistency. They want to see the same data points for every product. Common examples include price, material type, and dimensions, along with clear images of the product from multiple angles.
If product pages aren’t regularly updated to reflect changes or new versions — or if third-party (3P) retailers leave old pages up and running — this can negatively impact your bottom line. Ecommerce platforms can offer solutions to ensure brand compliance, which provide a holistic picture of how your products are represented online.
Per Kibo, the aggregate global cart abandonment rate at the start of 2022 was 80%. One key factor in these abandoned digital bags? Friction.
This friction can take many forms. For example, if users add an item to their cart and are immediately taken to a summary or checkout page with no easy way to continue shopping, they may simply walk away. As noted above, limited payment options can also increase user friction and lead to cart abandonment.
By ensuring that shopping cart and checkout operations are simple, clear, and consistent, companies can reduce abandonment rates and boost conversions.
Even well-crafted cart and product pages can be improved or tweaked. This is where A/B testing can help, as it involves creating two versions of a page or feature to test key elements (i.e., image type, the total number of images, or the placement of hero images on product pages).
By testing these factors one at a time with A/B testing, you can gain valuable data about what drives more digital cart additions and increases the overall chance of a conversion.
Bottom line? More orders from more visitors mean a higher conversion rate for ecommerce. Increasing average conversion rates, however, isn’t a one-and-done process. Instead, it requires a holistic approach and employing tactics like optimizing product content, delivering on SEO, reducing user friction, and testing, testing, testing to make sure new processes are leading to increased purchase volumes and higher conversion rates.