Introduction to Conversion Rate Optimization for E-commerce

Introduction to Conversion Rate Optimization for E-commerce

Running an e-commerce store is not a walk in the park. Fierce competition, getting listed in the search engines, driving traffic to your website, acquiring customers, product returns, delivering a complete shopping experience, etc. all are taxing activities.

Let’s talk about driving traffic to the website part for a moment. It’s one of the major challenges that e-commerce stores face. The reasons are plenty: Paid ads have become expensive, the ROI on paid ads is dwindling, SEO takes a lot of time and effort and so on. Even if you can drive a sizable amount of traffic, the next problem is, no one is buying from you.

You must be wondering; there has got to be a way out of this. In fact, there is! There is a solution that can increase your store sales without the need of spending too much money on driving traffic to your website. It’s got to do with increasing your store conversions with the current traffic you generate.

Enter, Conversion Rate Optimization or CRO for short.

In this article, we will look at conversion rate optimization for e-commerce stores. Let’s dive in!

What Is Conversion Rate Optimization?

Conversion Rate Optimization is a process in which you assess your conversion funnel to optimize elements and content on your website to maximize sales.

In CRO, you develop a hypothesis and run tests to test its validity. In simpler terms, you find out why your visitors are not buying from you, and then fix the causes.

Before we understand how we can implement CRO for e-commerce websites, let’s take a look at the e-commerce conversion funnel.

E-commerce Conversion Funnel

The buyer’s journey consists of 3 stages, namely awareness, consideration and decision.

    • Awareness: The buyer gains the awareness that they have a problem
    • Consideration: The buyer starts to research solutions to alleviate the problem
    • Decision: The buyer zeros in on a solution, i.e., make a purchase


Let’s look at how the buyer’s journey corresponds to the e-commerce conversion funnel below.


    • Awareness stage: the shopper recognizes the problem, and starts browsing your product catalog
    • Consideration stage: the shopper shortlists a few products, and compares which products suit their requirement
    • Decision stage: the buyer makes the purchase

What Is E-commerce Conversion Rate Optimization?

CRO for e-commerce websites consists of analyzing the e-commerce conversion funnel and improving the website elements to increase sales.

So, when we consider the e-commerce sales funnel, we can tweak certain on-page elements at each step of the funnel that can positively impact the conversion. Let’s take a look at how we can do that at each stage.

    • In the awareness stage, you can include high-res images, demo videos, in-depth product description, reviews on the individual product pages that can help the shopper when they’re browsing the product catalog
    • In the consideration stage, you can embed live chat, allow the shoppers to add products in wish lists, suggest relevant products with the help of collaborative filtering algorithm that helps the shopper to compare and make the purchase decision
    • In the decision stage, simplify the checkout process by reducing unnecessary fields, offering discount codes to encourage purchases or send out a reminder email if the user abruptly leaves the website i.e. cart abandonment

The E-commerce Conversion Rate Formula

Before we start the CRO process, we need to establish a benchmark against which we will measure our results. The conversion rate is the percentage of visitors who become your customers. We’ll stick to a simple formula to calculate the conversion rate which is as follows:

E-commerce Conversion Rate = (Total e-commerce transactions / Total website visits) * 100

For example: If an e-commerce store generates 15 transactions for every 200 visits, the conversion rate for the store is,

(15 transactions / 200 visits) * 100 = 7.5%

Why Is E-commerce CRO So Important?

It’s a valid question. There’s a myth floating in the Web 2.0 era that says, “Build, and they will come.” It’s a misconception. No matter how good your product is, you need to invest in marketing and promotion.

In a similar vein, it’s often observed that websites suffering from poor conversion ratio spend place more efforts in getting more visitors than trying to convert the existing ones. But that doesn’t work.

The reason CRO is crucial because you can generate more revenue for the same amount of traffic and expenditure. So, instead of spending more money on acquiring traffic, it is more beneficial to convert the current traffic efficiently. When you do this, you reduce the acquisition costs, and when you decide to scale your traffic efforts, you will be able to justify the ROI in a better way.

For instance, if you are spending $1 per visit then with a 5% conversion rate, you are spending $1000 to acquire 50 customers. After optimizing, if you are able to take your conversion rate to 8%, you are now getting 80 customers by spending $1000. It’s a sweet deal, right?

E-commerce Conversion Rates for 2018 by Industry

What is the ideal conversion rate? The answer differs for each industry. Factors such as devices, geography (location, country, etc.), traffic source, operating system, etc. also affect the conversion rate. Let’s take a look at average e-commerce conversion rates for 2017 and 2018.

Industry Average E-commerce Conversion Rates 2017 Average E-commerce Conversion Rates 2018
Agricultural Supplies 0.61% 0.63%
Arts and Crafts 3.51% 3.74%
Baby and Child 0.63% 0.65%
Cars and Motorcycling 1.14% 1.38%
Electrical & Commercial Equipment 2.99% 2.88%
Fashion Clothing & Accessories 1.34% 0.87%
Food & Drink 0.89% 0.69%
Health and Wellbeing 2.12% 2.01%
Home Accessories and Giftware 0.65% 0.91%
Kitchen & Home Appliances 1.86% 1.82%
Pet Care 2.27% 2.28%
Sports and Recreation 1.42% 1.06%



How to Increase Conversion Rate for Your E-commerce Store?

To begin improving the conversion rate, first, understand the present scenario. Start with benchmarking the current conversion rate. After that let’s take a look at a simple 3-step process that helps what needs tweaking.

Step 1: Identify Page Drop-Offs

With the help of an analytic tool (e.g. Google Analytics), start analyzing pages where high drop-offs or high bounce rates occur. View the Visitors Flow, Funnel Flow, Shopping and Checkout Behavior Analysis reports in Google Analytics to see how visitors browse your website.

Step 2: Identify the Reasons for Page Drop-Offs

With the help of heatmaps, visitor session recordings, form analytics find out the reasons why the visitor left the website. For example, with the help of heatmaps, you can find out where they’re navigating to and where they are getting stuck. Through form analytics, you can understand which fields visitors tend to hesitate while filling the form. Having this data at hand will help you create strategies that would minimize the drop-offs.

Step 3: Prevent the Drop-Off

Based on your findings, implement appropriate strategies to prevent potential drop-offs. If you are getting a significant amount of traffic on product pages, but not enough people are adding products to the cart, they might be hesitant because of the lack of product information. This is where A/B tests come into play. For example, create 2 variants of the call to action to see which leads to more purchases.

We will take a look at 6 simple ways to improve the conversion rate of your e-commerce store.

6 Ways to Improve the Conversion Rate for Your E-commerce Store

1. Include Visual Elements on the Product Pages

When shopping online, visitors can’t touch the product. Therefore, it is necessary to show them how the product looks. Adding high-quality images of products helps visitors to view the product from multiple angles. Apart from images, having a demo video also helps customers to understand how it works, especially if it’s a technical product.

2. Make Your Call to Action Stand Out on the Page

Call to action directs your customers on what the next action is. Having a strong CTA will significantly impact the conversion rate. The CTAs should stand out from other elements on the page by adding a visual appeal to them through buttons, attractive colors, and persuasive text without coming across pompous. Also, your CTAs should appear above the fold. For example, having a CTA such as “Buy Now” or “Add to Cart” gives clear instructions to your visitors as to what’s to be done and helps them make the decision.

3. Simplify the Checkout Process

What are the basic details required to complete the checkout process? It is personal details (Name, shipping/billing address, contact number) and payment details (payment method, card details). That’s it! Don’t go on asking how was their shopping experience or how did they get to hear about you. In simple words, remove any field that is potentially an obstruction to the checkout process, and you’ll be good.

4. Highlight Your Shipping and Return Policy

Make it easy to find your shipping and return policies. The biggest problem with e-commerce stores is that products are intangible until they’re delivered to you. For this reason, over 50% of the customers will read the return policy before making the purchase. To ease their purchase, communicate your shipping and return policy concisely and honestly. Doing this will reduce any hesitation your potential customer might have and speed up the purchase process.

5. Follow-up on Cart Abandonments

If you are facing a lot of cart abandonment, implementing a follow-up program can help you a lot. First, implement exit intent pop-ups that observe user behavior and shows a mid-screen pop-up when they’re about to leave your website. If this doesn’t help curb cart abandonment, then send them an email to remind them of their incomplete purchase. To remove any hesitation, you can again offer a coupon code to encourage them to complete the checkout process.

6. Use Live Chat to Help Your Buyers

Live chat is a virtual replication of the in-store assistant. People are going to have queries and if you answer them on the website itself, this will speed up the consideration stage from the buyer’s journey. Customer chatbots are all the rage these days. Start experimenting with chatbots that can in coming time ease off the basic customer assistance through its natural language processing capability.

Popular E-commerce CRO Tool in the market:

There are plenty of CRO tools for e-commerce stores that help you identify how you can improve the conversion rate of your website. Let’s take a look at a few of them:


HumCommerce lets you understand how your visitors interact with your website with the help of heatmaps, session recordings, and users flow. You can run A/B tests to see how two variants of the same element work to increase conversion rate. HumCommerce has a robust reporting tool which helps you analyze your sales funnel, view custom reports, and with the help of its conversion attribution feature, find out the ROI of your marketing activities. Not a humblebrag, but HumCommerce is packed with over 15 powerful analytic features that can help you convert your visitors into buyers.

Wrap Up

Hope this article has given you a good headstart on CRO for e-commerce. Use this article as a starting point on the journey of optimizing the shopping experience for your visitors. The internet is flooded with conversion hacks such as what should be the call to action or what color should the CTA button be and so on. Feel free to ignore such advice for now. Unless you find out the causes, you will not be able to fix what’s not working.


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