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Ecommerce conversion rate optimization tips to crush industry benchmarks

If you’re looking for eCommerce conversion rate optimization tips that will ensure you crush industry benchmarks, then look no further.

We’ve all seen the impact that the COVID-19 pandemic has had on eCommerce businesses. Many products and industries aren’t deemed “essential” as customers worldwide shift their priorities and prepare to tighten their belts. And even businesses who sell these essential items – like food and medicine – are struggling to hit their own revenue goals.

We’re all navigating uncharted territory, and for many eCommerce business owners, we need to do more than simply pivot in order to survive. 

So in this article, we want to show you everything you need to know to crush eCommerce industry benchmarks in 2020. First, we’ll take a look at the current landscape of the eCommerce industry before zooming in on the challenges faced by eCommerce businesses this year. 

Then, we’ll show you 16 of the best eCommerce conversion rate optimization tips to get you ahead of the competition.

Table of Contents

Ecommerce statistics in 2020

To get the best understanding of how to optimize your conversion rates for your eCommerce business, we should first look at what the industry looks like today.

There’s no denying that the recent COVID-19 pandemic has affected the eCommerce industry, regardless of the kind of goods and products they sell. 

For example, according to QuantumMetric, there was an almost 9% year-on-year increase in eCommerce sales in February of this year. According to the company, this same kind of “buying urgency” is typically only seen on Cyber Mondays. 

The growth can be explained by the surge in panic buying accompanied by the beginning of stay-at-home measures implemented by local governing bodies. 

Many consumers flocked online to make sure they had everything they needed to prepare for a lockdown or prolonged quarantine. And today, consumers are now adapting to the habit of shopping online for things they normally would have purchased in a brick-and-mortar store.

A similar finding by ccinsights shows that US-based online retailers saw a 68% year-on-year growth in April of this year, even citing that this growth is typically only observed during the holiday season. 

And while we know these new behaviors are being driven by the stay-at-home orders happening in most countries, this still points to new habits that consumers are now adopting. Customers are learning of the convenience that e-commerce gives them: being able to save time and sometimes even money with online-exclusive promos and perks.

Besides, the pandemic scare is sure to help sustain these new online shopping habits for several months to come. 

About 24% of consumers said in a survey that they’re not comfortable going shopping in physical malls and stores in the next 6 months minimum, especially since April of this year.

Survey findings from Morning Consult on consumers’ expectations vs comfort level on resuming regular pre-pandemic activities. (Source)

 

Indeed, these findings show us that the future for any eCommerce store is bright, as long as you play your cards right – meaning optimizing your conversion rates to make the most sales possible. 

But with these sudden changes, we’re also seeing new challenges spring up. In the next section, we’ll talk about three of the new main challenges eCommerce businesses might experience that may affect their conversion rates.

Struggles eCommerce businesses are now facing

Changes in tax laws

Sales tax changes have always been ever-changing territory, but even more so now. 

With evolving tax laws, online business owners are now faced with bigger obligations to stay tax compliant. Ecommerce owners have to stay on top of regulations and know how they can practice utmost compliance.

For one thing, within the United States, different states require different taxes and rates. Ecommerce and globalization have made it easier for a user in, say, New York, to purchase an item they can only find in, say, Seattle. 

For the unprepared eCommerce owner, they may not know which tax rate to follow or how to properly set tax rates for interstate customers.

The challenge may even be more apparent for businesses who accept and deal with international markets. 

While the opportunity and ability to reach a global market can prove lucrative, eCommerce business owners must be prepared for any regulations – such as customs duties or tariffs, and the like.

We should also expect more states to expect more revenue in taxes from online sales. So you can stay on top of local regulations and changes as they come. Follow official accounts of local governors, congressmen, and offices to make sure you’re in the loop.

Fortunately, we’ve constantly been seeing the rise in automated taxing technology. Often, the creators of these tools stay on top of these ever-changing tax laws, both local and global, and make the tax projection and collecting process much easier. 

So most eCommerce business owners only need to invest in the right eCommerce tools to make sure consumers are seeing accurate tax requirements and information. Then from the eCommerce owner’s side, this tax information can be easily reflected in their business accounting software when integrated.

Disruptions in the supply chain

A second challenge for eCommerce business owners is staying on top of demand while managing limitations and disruptions in the supply chain. 

COVID-19 has definitely affected countries and businesses all over the globe. Many businesses depend on manufacturers from different cities, states, or countries to be able to sell finished goods. So as unequal lockdown measures and regulations are enforced, some eCommerce owners have had to deal with finding new – especially local – suppliers and manufacturers.

Those who don’t look for new manufacturers may even need to face delays in shipping their goods. Most businesses have been forced to operate on a skeletal workforce, which causes a domino effect to every other business around it.

One way to stay on top of this challenge is to adjust usual enterprise resource planning (ERP) systems to note new lead times. It may entail predicting possible shortages sooner so as to be able to make timely orders for new raw materials that won’t hamper actual sales and deliveries. 

Ecommerce owners can also communicate with delivery services to make sure they’re able to communicate any delays in shipments and product fulfillment with customers.

Health and safety concerns about receiving online purchases

Last but not least, consumers are becoming warier of contact with outside objects, especially as studies have found that the COVID-19 virus can technically survive on different surfaces for a given amount of time.

While eCommerce store owners can do whatever they can to make sure items are properly disinfected prior to delivery, once parcels and products are out of their hands, there’s little they can do. 

The best solution that’s come up for this challenge is courier services themselves emphasize their safety precautions when handling deliveries. They also post reminders for customers themselves to practice disinfecting parcels and personal hygiene when receiving such deliveries.

And now that we understand these challenges that eCommerce businesses face today, you can keep them in mind when implementing the essential conversion rate optimization tips we’ll discuss in the next few sections.

What is conversion rate optimization

Before we name all the best eCommerce conversion rate optimization tips to help you soar over industry benchmarks, let’s go back to basics and see what conversion rate optimization is.

We should start by breaking it down to its root word: conversions.

In the case of eCommerce stores, a conversion can be simply getting a customer to make a purchase from your online store within a given period of time. 

Of course, you can have conversion goals for a myriad of other marketing and sales activities, such as email marketing conversions that indicate new subscribers.

In business, you have to optimize for conversions. Whether they’re conversion goals for users adding items to their wishlists, leaving reviews, or sharing your products online, you must focus on your conversion rates.

Conversion rate optimization for eCommerce stores is essentially the process of implementing online sales and marketing strategies in order to hit a specific goal, e.g. sales.

For simplicity’s sake, we’ll be focusing on sales conversion rates for this article. So now let’s get to know what different industry conversion rate averages may be at this moment. This way, you can preview how your eCommerce conversion rates are vis-a-vis industry benchmarks.

Conversion rate benchmarks by industry

Conversion rate benchmarks vary by industry, and data about average sales may differ drastically per industry this year compared to last.

Here are a few key statistics about different eCommerce industries in the time of COVID-19, according to a report published by Nielsen:

Health-related goods like medical masks, thermometers, and household disinfectant sprays are unsurprisingly up. Medical masks, in particular, reported over 300% year-on-year dollar growth as of February this year.

Source

 

Shelf-stable consumer goods sales also saw an increase, with some products like milk substitutes also seeing 300% dollar growth compared to last year. Consumers are preparing and stocking up their pantries, as we also saw in panic buying amid the growing pandemic scare earlier this year.

Source

Other studies from different groups are also shedding light on other industries selling different goods. 

ShipBob, for instance, studied their 3,000+ eCommerce merchants’ sales data through the months and saw an average 20% decrease each month. As of late July, however, the apparel industry seems to be seeing a comeback.

Source

Beauty, personal care, and cosmetics seemed virtually untouched as the industry continued to see steady sales despite the pandemic. ShipBob notes that the beauty and personal care industry is often one of the most resilient industries even in previous seasons of economic hardship.

Source

Another industry that seems steady is the electronics industry. This may be explained by companies and schools shifting to remote work and learning. 

Source

Interestingly, toys and games are on the rise. We can attribute this trend to families needing home entertainment given the recent stay-at-home orders as well as several schools delaying their in-person learning activities. 

Source

And finally, another unsurprising finding was the spike in sports and fitness products especially at the beginning of lockdowns and quarantines. Because gyms were deemed some of the riskiest places for infection, consumers had to invest in at-home gym equipment.

Source

 

How to calculate your conversion rate

Industry benchmarks can be a great place to start. You get to anticipate and see how other businesses in your chosen eCommerce niche are performing.

With this information, you’re able to set appropriate conversion rate goals for your own eCommerce business. 

Fortunately, calculating your average conversion rate is simple. Say you have 10,000 visitors to your eCommerce store each month. Then say you made 100 sales. That makes your conversion rate 1%.

The formula for conversion rate is your total conversions for a given period divided by your total visitors for the same period, then multiplied by 100 to get the exact percentage.

And in case you were wondering about the average conversion rates for eCommerce stores in general, the answer is between 1-3%. Of course, depending on the existing strategies you’re using, you might not even see that 1%.

So move on to the next section, where we’ll show you 16 essential conversion rate strategies to help you crush the eCommerce benchmarks.

 

Conversion rate strategies to help you crush industry benchmarks

Get to know your buyer persona again

Let’s start at the beginning: your buyer.

We talked a lot about different trends and challenges for eCommerce businesses in 2020, and many of these trends are a result of customers’ changing priorities and new habits.

So it only makes sense to return to your buyer persona and give it a few tweaks. You might need to only change it a little, depending on your main customer, but it’s possible you’ll need a complete overhaul altogether.

To create a clear and effective buyer persona to optimize your eCommerce conversion rates, here are the following steps you can take:

  1. Start with your customers’ demographic information. List down their age, location, job title, and income bracket.
  2. Evaluate what their goals might be, especially now. For some industries, their goals might have shifted as new priorities came up because of COVID-19. For other industries, customers may have the exact same goals but simply new habits.
  3. Note their likes and dislikes, their new habits. If you can, narrate a day in their life. Also, zoom in on possible sites and social media accounts they’re fans of.
  4. Then think about any problems or issues they might be facing that can get in the way of their goals. 

Knowing your buyer is the first essential strategy that can inform every other strategy or tactic you use. By knowing your customers’ demographic and psychographic information, you can create better products, copy, and marketing plans.

Source

Evaluate your eCommerce business model

You’ve probably heard it a thousand times: now that the world has changed, we need to pivot.

Maybe the next best eCommerce conversion rate optimization tip for your business is to revisit your business model. 

Ask yourself if there are ways you can be more sustainable or relevant in this new normal for customers. Think of the added value you can give at no extra cost to customers. Brainstorm new services or products that will help your customers even more.

Could your eCommerce store offer a subscription box service for easy refills? Can you offer online consultation for customers needing personalized recommendations? Could you create a collection of products that will help them thrive in the new normal?

Conduct a user study

You know what they say. Ask and you shall receive.

Sometimes to optimize your conversion rates, you just need to ask your customers about their needs or concerns. 

If you’ve already built out a customer base or email list, send them a short survey to get to know the most important things about them. Ask about their current circumstances and what they’re looking for.

Be sure to read between the lines after getting these responses. After all, users can say they want one thing but can also mean they want another. Get to the heart of their responses and see how you can best serve them.

One idea to display user study surveys: at the end of order confirmation emails. (Source)

Identify your top traffic sources

You can improve your marketing ROI by only zooming in on your top traffic sources. 

Use tools like Google Analytics to help you identify where your top traffic referrals are currently coming from. Ideally, you want to find out which channels get your eCommerce store the most organic traffic. But you should also look at the performance of your paid ads and see which one has the biggest ROI.

If you’re on Google Analytics, here’s how you can find your top traffic referrals:

  1. Navigate to Acquisition
  2. Go to All Traffic, then select Referrals
  3. Under Source, you should then be able to see the top ten URLs that are giving your eCommerce store the most traffic. It may be possible to have different URLs from the same domain, for example, google.com/news or google.com/page2
  4. Also, pay attention to the number of sessions (both repeat sessions and new sessions) from each. It may happen that you’re getting the most significant traffic from only a handful of URLs and very little from the rest.

Source

Reduce your product offerings

When it comes to sales, we used to believe the “Walmart Way” – that is, the more products we have on sale, the more potential for more sales.

It turns out, this may not be the case. A 2018 survey conducted by Zoovu found that 54% of customers between the ages of 17 to 69 said they stopped buying from a specific brand or retailer because it was too difficult to choose the right product. 42% even said they’ve abandoned purchases and carts simply because of too many choices.

Does this mean you ought to shave off all your product categories and just sell one main product? Not necessarily.

There’s a way to help customers avoid cart abandonment caused by decision fatigue, and it can start by reducing your product offerings. 

You can also reduce the perception of too many products by doing the following:

  • For products with multiple variants (colors, sizes, etc.), offer them under one product page only.
  • Curate different products into benefit-centric categories. For example, a skincare brand may have a category page called For Hydrated, Glowing Skin, or For Acne-Free Skin.
  • Releasing products in limited-time collections or seasons like holidays.

Assure your customers that your eCommerce store is safe

With online security becoming a hot topic, you need to assure customers of your eCommerce store is safe.

Fortunately, this can be very simple and straightforward to do.

The first place you’ll want to display your site security is on your domain name. Install an SSL certificate to ensure visitors and customers see you’re a trusted website.

Then you can display trust indicators across your website. For example, using your chosen landing page builder, add icons like “Safe checkout with PayPal” or “30-day money-back guarantee” and other security badges to ease customers’ minds about your store.

Examples of trust badges (Source)

Update your policies to align with the times

New times call for new business practices. 

Revisit your existing customer policies to make sure you can keep up with everyone’s needs without compromising your own business.

Note that shipping and deliveries can experience delays, so if you have a returns and exchanges policy, be sure to clearly state any changes or adjustments you’re making because of this. 

Communicate these new policies and updates to customers in key areas of your eCommerce store, but also send them alerts via email to make sure they’re in the loop.

Review abandoned cart users to identify checkout problems

There are varying studies and reports that try to pin down the exact abandoned cart rate for eCommerce stores. 

All we’re certain of is that abandoned cart rates can vary per industry and niche. But abandoned cart rates are quite high – never less than 50%, at the minimum – for eCommerce stores, likely because of how easy it is for customers to leave a website before checking something out.

Pay attention to your own store’s abandoned cart rate so you can optimize your eCommerce conversion rates. Try to glean insights from the data you gather. 

Can you pinpoint when users dropped off? Were there any broken promo codes? Are shipping fees too high?

While you can never completely get rid of cart abandonment, you can still optimize your store to reduce the chances of them happening as much as possible.

Add special offers like discounts and free shipping

Sometimes all you need to boost your eCommerce conversion rates are offering special perks like discounts and free shipping.

Encourage users to checkout right away by making these promos available only for a limited time. 

Consider, too, giving a free shipping incentive after customers can hit a minimum order amount. This can be a great way to not only increase average order value but also encourage repeat purchases from customers.

(Source)

Take out bottlenecks from your checkout process

Part of building an excellent user experience on your eCommerce store and optimizing your conversion rates is removing any bottlenecks from your checkout process.

Remember that the easier it is for users to check out, the more likely they are to actually complete their purchase. 

And that starts with making sure that you build your online store using a platform specifically designed for eCommerce websites. This ensures you have the right features and tools in place to create a seamless shopping experience for your customers.

Here are some tactics you can use to eliminate as many bottlenecks as you can:

  • Enable guest checkout as an option for first-time customers.
  • Encourage users to sign up for an account after purchasing via guest checkout. Tell them that making an account with your store will allow them to save their address and any payment information.
  • Let users view what’s inside their carts. Show photos and product summaries and order quantities before asking them to checkout.
  • Allow users to check a box that makes their billing address the same as their shipping address.
  • Only ask for the information you need to fulfill the order. These include one mobile number, a complete name, and a complete address. Any other information should be reserved for feedback forms or user surveys.

Add Live chat pop up on checkout exit intent

As users are about to exit your store, you may be able to boost your chances of turning them into conversion by having a live chat pop up before they leave their tab.

Let the chatbot pop up with a friendly question like “How can we help you?” or “Tell us what you’re looking for.”

You’ll never know if a user was simply unsure about where to start. With the right live chat programming, you can create an automated process that helps personalize the shopping experience for users using a given set of questions and answers.

You can even let users see any FAQs about your business, such as shipping or delivery estimates. 

Launch a customer loyalty program

One of the best strategies to really nail your conversion rate optimization efforts is focusing on what’s already working well. This includes customers who have already bought from you.

By encouraging repeat purchases, you can increase your overall sales and conversions as you get more purchases from fewer visitors.

A customer loyalty program might be all you need to do that. Create a compelling incentive for customers to keep buying from you, such as racking up points for discounts or hitting milestones for exclusive perks.

Double-down on your social proof

Studies show that 90% of users rely on online reviews about a product before they purchase. People trust testimonials and reviews from strangers almost as much as they do if the review had been from a friend.

Display reviews and testimonials on your product pages. Share these comments on your social media accounts like Instagram. 

You can even display how many people are currently on the same product page. Or you can display when the most recent purchase of the said product was if only to prove how popular or best-selling the item is in your store.

Source

Source

Include non-promotional content in your email marketing campaigns

Customers won’t always want to receive promotional emails from you. 

Sometimes they’ll appreciate content that is still relevant to them while also reminding them about your brand.

This means investing time and resources into creating highly valuable, personalized content that serves your customers in new exciting ways. Put yourself in the position of providing value first, then trusting that customers will make the sale when they trust your brand knows what they need. 

If you’re an apparel store, you can email customers guides about working from home loungewear, or tips for dressing up for a video call. If you sell food and beverages, you can send recipes or party ideas.

Your goal for creating content like this and including them in email campaigns is to become the top-of-mind brand for customers the next time they’re looking for something in your niche.

Retarget your customers on social media

Retargeting is another essential conversion rate optimization strategy you should take for your ecommerce store. A study found that 92% of customers who visit online stores don’t make a purchase right away.

Sometimes users have different search intents, such as looking up prices. But most of the time, users are likely just browsing and comparing items.

So if a user ends up in your eCommerce store and leaves, they’ll most likely forget about your store right away.

Remind them about the items they were looking at on your store by retargeting them on social media sites like Facebook and Instagram. A friendly nudge might help them convert into a sale, especially if they were browsing and didn’t make a final decision yet.

 

Make A/B testing a habit

Last but not least, make A/B testing a habit. If you’re going to really optimize those eCommerce conversion rates, then you’ll want to experiment with different strategies and tactics to see what works best.

Try experimenting on product pages. Will product pages with video showcases work best? (Note that you don’t need to invest in fancy video editors either, as free video editing software makes for a great place to start.)

You might also be able to test out different product descriptions by playing around with copywriting. Or you can A/B test your SEO to increase your chances of getting discovered organically.

 

Key Takeaways

Ecommerce is undoubtedly the present, so it’s up to you to stay ahead of the competition. Look no further than these best eCommerce conversion rate optimization tips to help you crush industry benchmarks and grow your business like never before.

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