I hope you agree with me that creating and running an ecommerce store are two completely different things.
After resetting the product, getting all the licenses with your business name and creating an eCommerce store, you finally have the news: there is still a lot to do.
To determine the effectiveness of an ecommerce store, conversion rates are often considered as KPIs (Key Performance Index) of value.
While there is much debate about the effectiveness of using conversion rate statistics as KPIs, it is still widely used across industries.
Here is a list of everything we have covered in this article-
- Calculation of the conversion rate
- What is a good conversion rate?
- Conversion rates by sector
- Conversion rates by country
- Conversion rates per channel
- Conversion rates per device
- Conversion rates by operating system
- Conversion rates per payment
1- Calculation of the conversion rate
Any action you want the visitor to perform upon completion is called conversion.It can be registering or downloading something, filling out a form or making a purchase.
In this article, we are focusing on ecommerce conversion statistics, i.e. transactions.
Conversion rates are defined as the ratio of transactions to the total number of sessions.
For example, let's say you received 1000 sessions in a given period and 70 people made the transaction, then your conversion rate is (70/1000) x 100 = 7%.
Isn't it simple?
But this is an absolute number.You don't know if it's good or bad.
Here comes benchmarking.
Depending on the goals you've set for your eCommerce site and the KPIs you've chosen, you can compare your data to standard data, segmented by industry, device, country, etc.
2- What is a good conversion rate?
You may experience a constant conversion number, perhaps 1%, 3%, or 5%.And you may be wondering if it's even good.You may also have heard that a good conversion rate is around 2.6%.
But. It's not that simple.
What might be true for an industry may not be true for yours.Within your sector you will also find outliers.For example, if you compare your conversion rate to ecommerce giant, Amazon, you could quickly conclude that your site isn't converting at all.But this is not the industry average.
Several factors affect the conversion rate.And it differs by industry, device, channel, and even country.
Let us discuss each by one.
3- Conversion rates by sector
Conversion rates by industry are one of the best metrics that indicate the effectiveness of your ecommerce store.
IRP Commerce provides useful data such as sales, traffic, conversion, etc. In many sectors.
Here are the conversion rates based on various industries for the years 2019 and 2020. Looking at the chart, we can see that where 'dental and medical supplies' has a whopping conversion rate of over 6%, some sectors like 'baby wheelchair' & nurseries' and 'Camping' have poor numbers at 0.87% and 0.70%, respectively.You can check the
Detailed List here.
4- Conversion rates by country
This is another factor you need to consider when evaluating the effectiveness of your ecommerce business.
The average e-commerce conversion rate is between 1 and 4%, globally, with a substantial disparity between countries.For example, the Netherlands and Germany both have a conversion rate of 1.4%, but Italy has only 1.2%.
Although there are no general reasons that can justify this disparity, each country can have its own reasons.
Mature markets where established brands have an online presence will certainly have higher conversion rates as a considerable portion of offline sales are also happening online.For example, the United States and the United Kingdom have conversion rates of 1.4% and 1.8%, respectively.
5- Conversion rates per channel
Conversion rates differ depending on the traffic source.If a visitor arrives at your store through a Google ad, chances are they've already been searching for the product to buy.Here, purchase intent is the differentiating factor.And the same is confirmed by the following data.
6- Conversion rates per device
Another important factor that can affect the conversion rate is the device.Numerous studies conducted in various industries have confirmed that screen size greatly affects conversion rates.
The Quarterly Ecommerce Report, 2019 published by Monetate provides regular data on conversion rates segmented by device, media, etc. In the United States and the United Kingdom.
Looking at the data, we can say that the
- conversion rates from desktop are 4.2%,
- Mobile phones are 1.9%
- Other devices are 0.1% and
- For tablets are 3.7%
So, the conversion happens best on big-screen devices like desktops and tablets.We can say that smartphones and mobiles are good navigation devices, but when it comes to purchases, the big screen wins the race.
numbers are similar according to another study in the United States published by Statista, for the second quarter of 2019.
7- Conversion rates by operating system
Monetate's study extends further to reference conversion rates by operating system.It has been found that the conversion rate on iOS is slightly higher than that of Android, and between Windows and Mac, Windows leads with a marginal difference.
8- Paid conversion rates
The payment is the last but one of the biggest hiccups in closing a deal.Although you may have a winning product, but if the user does not trust your payment gateway, they may not swipe their card for fear of a security breach.PayPal states that eCommerce stores enabled for PayPal have PayPal transactions 70% higher than non-PayPal transactions.
Isolated conversion rates are absolute numbers that hardly make any sense when not compared to benchmarks.These benchmark figures will definitely help you understand the performance of your eCommerce business on the KPIs and goals you choose.
After taking into account all the factors mentioned above, if you still think that conversion rates are lagging behind, then you should definitely optimize your site for conversions.