eCommerce Conversion Rates

A ‘conversion rate’ represents the number of end-users who perform a specific and planned-for or desired action after engaging with a content featured within a digital platform. In the world of ‘traditional’ eCommerce, an ‘eCommerce conversion rate’ more specifically defines the number of orders divided by total traffic. For instance, if a conversion rate is greater than the industry average, it means that the right product is being presented at the right price point to the right target audience.

A conversion rate is also the primary metric we would utilize during our Analytics Consulting to indicate the attainment of a transactional digital platform; establishing an engagement with the end-users is the first and most important step towards driving value for a service or product online. In fact, a marketing conversion on a website is not just related to sales events but can actually be tied to any type of KPI (key performance indicator) a business might have set up as their goal(s). Based on these KPIs, it is possible to set and verify a ‘funnel website conversion rate,’ which would look at the number of visitors completing the conversion process of a website, whatever that might be. Examples range from very basic objectives such as cultivating an audience of returning visitors or having an increase in browsing times; to more complex ambitions like the numbers of membership registrations; sign-ups to subscription services (paid or free, such as newsletters); downloads of content (i.e. of trial software, reports, digital goodies); information requests.

At the outset of the .com days, an eCommerce conversion rate tended to be higher on websites of established brands, as there was typically less engagement competing with social media networking sites and other forms of entertainment vying for the attention of the online consumer. Nowadays, the digital marketplace is certainly more cluttered, and marketers have had to become strategic and savvy in building their CRMs through carefully selected touch-points and actions. Moreover, a website’s eCommerce conversion rate tends to depend upon the industry or sector; country, where consumers may not have access to broadband a necessary factor that makes purchasing online easier; and time of year. For example, the month of December has historically been the month of the highest conversion rates attributed to the holiday shopping season, and the highest month of retail consumption globally.

Given the prominence and influence of digital platforms as ‘marketing and transactional flagships,’ the neta philosophy surrounding eCommerce conversion funnels is that oftentimes a data pipeline needs to be excavated and constructed in which to understand ‘actual conversions’ that reflect digital influence across all transactional channels and therefore to be able to have a true sense on ROI. In fact, ultimately, the number, type and quality of marketing conversions also depends on the type of marketing channels used to engage with the end-users. In our experience, typically an SEO vs. SEM strategy is one of the main and most effective driver of an eCommerce conversion rate, followed by email. Social media channels have the lowest conversion rate, as they mainly serve different types of purposes (awareness, positioning…) and generally just drive more occasional and explorative types of website visits, which often result into bouncing. New features such as Instagram’s ‘shoppable posts’ or Instagram Stories are, however, changing the tide and allowing marketers to build social media hooks that besides engaging, are also growingly supporting actual conversions.

This is also linked to the growing rise of omnichannel-type of consumer journeys, in where digital attribution and findings based on analytics consulting, and the set-up of conversion funnels, would stretch the concept of ‘conversion rate’ to offline touch-points as well including call centers and physical brick-and-mortar stores. As a leading omnichannel agency, neta specializes in building such-types of seamless and engaging consumer journeys, blurring the boundaries between digital and physical spaces, also ensuring that all customer ‘interaction points’ are taken into account when calculating the conversion rate of an eCommerce or of any other type of website platform set-up.

Most importantly, we also never forget the pivotal role of UX Design and usability, for both desktop and mobile browsing, as crucial aspects when it comes to conversions; netamorphosis’ award-winning work proves how beautiful and functional displays, carefully built information architecture, strategy-driven content creation and fast loading pages lead to more intuitive and carefree navigation experiences and hence to happier (and returning) customers.