CRO Guide  >  Chapter 7

What is a Good eCommerce Conversion Rate?

What makes a relevant eCommerce conversion rate? Let’s have a look over the eCommerce conversion rate formula and a few tactics and a special tool to get the results you want for your business.

good eCommerce conversion rate

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In 2021, the conversion rate still is one of the most important metrics when it comes to measuring the real success of your business endeavors. To put it simply, the conversion rate shows us the real percentage of people that not only visit a company’s website or landing page but actually convert, thus directly contributing to your revenue.

What these people mean for your business is directly related to what your business model is and what products or services you deliver. Generally, there are more types of conversions, but if you run an eCommerce store, then the type of conversion you’ll most likely be interested in is having a customer purchase your products or services.

The average eCommerce conversion rate can be safely expressed as a percentage given by the ratio between real, successful, and completed transactions to basic sessions. 3 transactions to 10 sessions would create an eCommerce conversion rate of 30%.

Together with other parameters that can be tracked with the use of advanced software such as Reveal, an all-encompassing tool about which we will talk more a bit later, the eCommerce conversion rate can help you understand how efficient your marketing campaigns and product and services designs are. Understanding your conversion rates will keep you aware of the performance and competitiveness of your online eCommerce store. A high conversion rate usually nets better customer value and indicates lower costs of customer acquisition through digital marketing.

With better marketing, higher conversion rates are sure to follow, and there are plenty of short-term tactics and long-term strategies you can take advantage of to increase your eCommerce conversion rates. 

Besides, it’s vital to keep in mind that, even if you are in the eCommerce business, a conversion is not always identical to a purchase. The conversion rate is a useful metric, but the final goal remains sales generation for your eCommerce platform, through eCommerce marketing. A good conversion rate can sometimes be bad for businesses if those conversions aren’t turned into sales, but a good eCommerce conversion rate is usually one between 1% and 4% of your traffic.

The average eCommerce conversion rate of 2021

As stated, average eCommerce conversion rates vary between 1% and 4%. Do everything as well as you can for your business, and you’ll find yourself in the 2021 average sweet spot of 2%-2.5% conversion rate. Since the new year has just started, eCommerce conversion rate updates are still rolling out, generating a clearer picture by the month.

In better case scenarios – and with more time and money invested in eCommerce conversion rate optimization tactics – your online store could see conversion rates for eCommerce as high as 3% or 4%. It has to be noted that 43% of eCommerce traffic comes simply from organic Google searches. Let’s see how to properly calculate the various conversion rates!

eCommerce conversion rate formula

You can track your conversions directly through most advertising or analytics software platforms. However, since there are plenty of such platforms, generating simpler formulas for starters would be a great starting point for gathering precise data regarding the percentage of visitors that actually convert. Remember, any kind of browsing clicks (store visiting sessions) are good for you, but turning them into purchasers is what’s best. Even more, you should always pay close attention to the following metrics, as they all factor in to give you a clear picture of your online store’s conversion rate: 

  1. The overall conversion rate
  2. Marketing channel conversion rate
  3. Page-level conversion rate
  4. Campaign conversion rate
  5. Individual ad conversion rate
  6. Keyword conversion rate

So do you have a good or a bad conversion rate? Let’s find out by applying the Conversion Rate formulas! To calculate the actual eCommerce conversion, this simple conversion rate formula can be used for the majority of cases:

eCommerce conversion rate = Number of Store Transactions/Number of Website Visits x 100

Browsing the Internet, you may find more than one of these formulas. Why is that? You may wonder. The answer is that because calculating conversion rate directly depends on other factors, as stated previously, then to better finetune your marketing budget to increase revenue by helping more and more visitors get to the end of the sales funnel, you may want to have some more in-depth control.

Another method to calculate conversion rate is dividing the number of conversions in a fixed period by the total number of people who reached your landing page or your homepage – and then multiply it by 100%:

Conversion Rate = (conversions  / total visitors) * 100%

Now, to find out the percentage of visitors that converted from a paid campaign, no matter how many times they converted, you can divide the converting clicks by total clicks and multiply by 100%, thus generating your click conversion rate:

 Click conversion rate = (clicks that convert / total clicks) * 100%

The conversion rate data is very flexible – it’s also perfectly okay to take multiple conversions of the same customer into account. In the long run, taking more than one type of conversion will help perfect your marketing strategies. Do note that while for the vast majority of businesses, the conversion rate is equal to the click conversion rate, when it comes to eCommerce, what actually matters is the actual number of transactions made per number of sessions.

Average eCommerce conversion rate by industry

It tends to be difficult to get all the conversion rate information you may want to have access to – and it’s no wonder. All companies and businesses tend to be overly protective of such sensitive info, as such, the most accurate eCommerce conversion rate information is very well protected most of the time. It makes sense since extremely few online store owners – if any at all – would have anything to gain from making their performance indicators public for everybody.

What is clear, though, is that conversion rates vary depending on the traffic quality and quantity. These, further on, vary depending on what eCommerce industry you are active in, as in what products or services you sell. As such, a good conversion rate will be strictly specific tied to the said products or services and how you advertise them through campaigns. Some of the variables that impact conversion rate include:

  • Product type
  • Product cost or average order value
  • Traffic source
  • Device (mobile, tablet, or PC)
  • Platform (Windows, Mac, iOS, Android, etc.)
  • Location

Knowing how these variables affect you can help you generate conversion rate optimization tactics and strategies. It pays off to know your customers – and even to use tools such as Reveal to segment them properly, as well soon discuss. A good eCommerce conversion rate, regardless of the industry you are active in, is shown in eCommerce conversion rate statistics to be usually one between 1% and 4% of your total website traffic. Recent years show the following conversion rates per industry, with arts and crafts holding the overall lead:

  • Arts and Crafts: 3.84% – 4.01%
  • Electrical and Commercial Equipment: 2.49% – 2.70%
  • Pet Care: 2.51% – 2.53%
  • Health and Wellbeing: 1.87% – 2.02%
  • Kitchen and Home Appliances: 1.61% – 1.72%
  • Home Accessories and Giftware: 1.46% – 1.55%
  • Cars and Motorcycling: 1.35% – 1.36%
  • Fashion, Clothing, and Accessories: 1.01% – 1.41%
  • Sports and Recreation: 1.18%
  • Food and Drink: 0.90% – 1.00%
  • Baby and Child: 0.71% – 0.87%
  • Agriculture: 0.62% – 1.41%

The latest surveys and studies at the end of 2020 reveal that the average conversion rate of eCommerce websites is 2.86% and rising. The average eCommerce website conversion rate sits at 2.63% in the  US, as opposed to 4.31%, which is the global online conversion rate.

eCommerce conversion rate tactics/strategies

Finding a means to increase your eCommerce conversion rate takes us to a series of proven to work tactics and strategies that form what is called Conversion Rate Optimization (CRO). 

ECommerce conversion rate optimization helps a lot when it comes to enhancing the power of certain marketing campaigns, or more constant enhancements, such as improving your site UX/UI and your landing page. Employing such tactics tends to net you more transactions from your already existing website traffic. Keep in mind that since eCommerce conversion rates stand between 1% and 4%, getting from 2% to 4% means doubling your conversion rate. 

Without proper eCommerce conversion rate optimization strategies, you will soon realize that you are just throwing money out of the window. The customer traffic that lands on your site is a lost opportunity if you don’t help them to convert. CRO is very cost-effective, it has a great ROI (Return On Investment) and is sustained by already existing website traffic. Here lie the main CRO strategies:

Always remember that CRO lowers your CAC (Customer Acquisition Cost)

With no additional associated costs, employing CRO strategies directly translates into more profit for your business, because it leads to the direct conversion of a greater percentage of your website traffic sessions. 

Improve your customer journey

By improving your customer journey, your visitors will be staying more on your site – maybe even recommend it to other acquaintances! Through this eCommerce marketing strategy, the conversion rate will increase.  A superior customer journey starts with investing short-term in the long-term improvement of your online store’s UX/UI.

As such, tweak your UX!

Improving the overall UX – User Experience – generates a better customer journey, since a better customer journey is greatly influenced by your UX/UI. Always strive to offer your potential customers something outstanding – especially when it comes to the checkout process, where most world transactions are abandoned. Make sure you take care of these aspects and your eCommerce conversion rate will greatly increase.

Optimize your Landing Page

Optimizing your landing page is a very important aspect. By optimizing it, if you already have a great deal of website traffic, sending them directly to a page that is specifically designed to sell your products and services, will increase their chances to make a transaction, thus, converting. CRO works great with landing pages, as is proven through A/B testing. 

To have something AB tested, simply set up two variants of the same page and split your incoming traffic between them, usually half to page A and half to page B. Depending on the preferred one, you can choose the betterment of your eCommerce website store. 

Segmenting your customers into actionable groups

Understanding how specific customers prefer to be approached is crucial in making sure that you are improving eCommerce conversion rates and that they stay high as long as possible. What makes each category tick and how is it best to cater to their specific needs? What social media platform to approach them on and what are your conversion rates by platform?

If you are looking for ways to gather more information about your customers and improve upon your business relationship with them, you have to start the customer segmentation process. As a matter of fact, we’ll now be talking about a great piece of software that can help you in this regard.

50+ reviews on Shopify
5/5

Explore helps you make the most out of your CRO efforts through advanced A/B testing, surveys, advanced segmentation and optimised customer journeys.

Test your insights. Run experiments. Win.
Or learn. And then win.

Tools To Improve eCommerce Conversion Rates: Reveal 

Reveal is Omniconvert’s completely free Customer Value Optimization Platform that helps you monitor and improve all aspects of the relationships with your customers, helping both directly and indirectly with improving your eCommerce conversion rates. 

With Reveal, you can better understand your ideal customer profile, as well as their buying patterns and the barriers that have to be overcome to make them move towards the end of the sales funnel. As a whole, Reveal offers you an integrated view of how services, products, locations, and eCommerce brands are all connected with your customer profiles and, more importantly, how to divide your customer base into targetable segments. 

This is the main reason for the creation of the Reveal app: delivering accurate reports and actionable data and insights in one place.

Reveal’s main advantage over other similar software is that it also integrates RFM (Recency, Frequency, Monetary value) segmentation procedures. This helps you to correlate this data with your online store catalog, enabling you to see your best-sold brands and products, along with your best buyers.  This kind of advanced segmentation, along with buying habits and cohort analysis for each area of interest (Revenue vs. Margin by customer type, Product return rate by customer type, Average retention rate, etc)  will allow you to unlock new opportunities for your business. 

Moreover, Reveal takes your A/B testing to the next level if you are using Explore because you can use the RFM segments to offer a personalized experience on the website. 

Retain and nurture your most profitable customers.

Understand and predict your customers’ behavior and Lifetime Value.
Use segments and audiences to create personalized experiences and better marketing campaigns.

50+ reviews on Shopify
5/5

SHORT F.A.Q. 

1. What is a good conversion rate for eCommerce? 

Average eCommerce conversion rates range from 1% to 4% – if you are within those limits or even surpass them, you can rest assured that you have a good conversion rate for eCommerce. 

2. How do you calculate the eCommerce conversion rate?

To calculate the actual eCommerce conversion, this simple conversion rate formula can be used for the majority of cases:

eCommerce conversion rate = Number of Store Transactions/Number of Website Visits x 100 

3. What is the online conversion rate? 

The online conversion rate refers to people who convert exclusively using online methods and not physical, real-life shopping methods. 

4. What is a good conversion rate?

The average conversion rate is usually one between 2% and 5% of your traffic.

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Valentin Radu

Valentin Radu

Valentin is a serial entrepreneur and visionary involved in tech and digital marketing for the past 12 years. He is the founder & CEO of Omniconvert, our integrated conversion rate optimization platform.
Valentin Radu

Valentin Radu

Valentin is a serial entrepreneur and visionary involved in tech and digital marketing for the past 12 years. He is the founder & CEO of Omniconvert, our integrated conversion rate optimization platform.

Become a Certified Customer Value Optimization Expert!