Need to improve the bottom line of your e-commerce business? Then it's time to talk about a Conversion Rate Optimization (CRO) — what does it mean and where do you begin? Here's your brief guide into CRO for e-commerce sales.
What is a conversion rate?
A conversion rate represents the percentage of website visitors who engage in specific actions like adding products to cart, completing the order at checkout or subscribing to your marketing newsletter.
What is a checkout conversion rate?
The checkout conversion rate means the ratio of consumers who begin the checkout process and complete it with a successful purchase. You can measure and compare your checkout conversion rates based on a certain period of time depending on your needs, whether it's weekly, monthly, quarterly or campaign-based.
How to calculate the checkout conversion rate?
To determine your conversion rates, take the number of successful conversions and divide it by the total visitor count. Then, multiply the result by 100 to express it as a percentage.
Let's take checkout conversion as an example. If your site had 500 visitors in a day and 50 of them made a purchase, your checkout conversion rate would be 10 percent, or (50 conversions / 500 visitors) x 100.
Hoe to becnhmark your checkout conversion rate?
In September 2022, Littledata surveyed over 2,000 e-commerce sites with monthly visits ranging from 20k to 500k. They found the average checkout conversion rate in e-commerce to be approximately 46 percent.
If your rate exceeds 62%, you're in the top 20% of stores they benchmarked; surpassing 69% places you in the elite top 10%. Such impressive rates suggest your customers appreciate a streamlined and intuitive checkout process from their entry to purchase completion. However, if your conversion rate hovers around 29%, it's likely time for some enhancements.
What is e-commerce conversion rate optimization (CRO)?
Conversion rate optimization (CRO) aims to increase the ratio of visitors performing a specific action on your site. For online retailers, the primary goal is often boosting sales, but enhancing add-to-cart numbers and reducing cart abandonment can also be targets.
CRO involves refining content, conducting A/B tests and streamlining workflows. By optimizing your checkout conversion rate, you attract more orders, boost your revenue and reduce costs associated with acquiring new shoppers.
Why checkout conversion rate optimization matters?
Many factors can impact your online store's conversion rates, leading to shopping cart abandonment. While some website visitors are simply window shopping with no intent to buy, it's crucial to ensure that your checkout experience isn't what's ultimately turning online shoppers away.
Checkout conversion optimization turns your potential customers into shoppers and in the best case, it may even bring repeat orders in the future.
Online retailers that optimize their checkout process encounter fewer abandoned orders. Remember the industry's average cart abandonment rate? It remains as high as 69.8%, which means you're missing out on 70 out of 100 potential orders.
Checkout optimization can also boost the average order value (AOV) — checkout-integrated tactics like cross-selling and upselling prompt customers to buy more and increase your revenue.
How to optimize your e-commerce conversion rate
- Implement responsive online store design;
- Show the delivery offer before checkout;
- Enable 'add to cart' from all pages;
- Add a mini cart overview;
- Try cross-selling and upselling;
- Allow guest checkout;
- Set expectations and show progress;
- Reduce address form friction;
- Offer multiple delivery options.
Implement responsive online store design
To optimize your site's conversion rate, make sure to implement responsive web design. Your website's layout and content should adapt to the user's screen size, particularly mobile devices. Additionally, prioritize website speed by reducing image and video sizes to improve loading times on mobile devices.
Show delivery options and prices as early as individual product pages
What's often missing in product descriptions are the delivery details showing when and how the products can arrive. Introducing personalized delivery options as soon as possible means that potential customers don't have to guess when and how the products can be delivered to them, if at all.
Enable 'add to cart' from all pages
Allowing to add products to the cart straight from the home page, as well as category or campaign pages, can shorten the checkout process for those customers who already know what they want.
Add a mini cart to your store experience
A real-time mini cart pop up can be a great addition to a traditional, full-sized cart page. When done right, it helps to speed up the whole checkout process and even increase the average order value (AOV).
Upsell and cross-sell
Upsell related items, matching accessories and popular products along the way to encourage complimentary purchases. Another incentive for increasing the AOV and completing the checkout would be free shipping or premium delivery options offered after reaching a certain delivery price point.
Allow guest checkout
Forced account creation comes second on the list of things that make customers abandon shopping carts. It's counterintuitive to the hassle-free expectation of online shopping. The best way to go about it is by offering guest checkout as an alternative to account creation.
Set expectations and show progress
Whatever happens, don’t overcomplicate checkout — design an intuitive, single-page process. For many online buyers, the overall shopping experience feels pretty great, until they reach checkout and have to fill in a heap of unnecessary, duplicate forms.
Simplify and autocomplete the address form
To make checkout easier for your customers, you could, for example, have the shipping address the same as the billing address — unless the customer requests otherwise. Another way to improve the checkout process is also by autocompleting and validating address form details, especially when it’s returning customers who make the purchase.
Offer multiple delivery options
Consumers want to know the available delivery options and estimated shipping time before purchasing. Their ultimate delivery choice depends on the type of order, life schedule, location and seasonal habits.
Keep in mind that online shoppers tend to abandon checkout because of high or unexpected shipping costs. It's doesn't necessarily mean you have to offer free shipping — it's more about finding the right balance between what your customers are willing to pay and what's feasible for your business.
That's where solutions like Ingrid Delivery Checkout prove useful, enabling online retailers to benefit from an optimized delivery experience in the long run.
Learn what your consumers prefer through A/B testing
There are three basic steps to any e-commerce CRO campaign:
- Set a goal and design your test;
- Run the A/B test;
- Analyze the results and continue testing.
Delivery checkout A/B testing example: Kronans Apotek
Kronans Apotek has over 320 pharmacies throughout Sweden — from Skåne in the south to Lapland in the north — with quick e-commerce deliveries all across the country. Together with Conversionista!, the no. 1 consultancy for growth and experimentation, Kronans Apotek identified three business challenges in relation to the delivery pricing strategy and sustainability:
- Low order value purchases were found to affect the profit margins;
- Product revenue margins weren't enough to cover the costs of deliveries;
- Site visitors faced little incentive to choose greener delivery options.
Conversionista! created a set of hypotheses and started experimenting with the built-in A/B testing functionality of Ingrid Delivery Checkout. They replaced the pre-selected free delivery option with a greener delivery method, presented at the top of the delivery checkout. Then, they explored five — A/B/C/D/E — delivery cost combinations to identify which price would give the best conversion outcome.
Despite the 14% reduction in conversion rate — which in fact eliminated low-margin orders — Kronans Apotek saw a 25% increase in greener delivery option, 11% net margin revenue boost, and a 2% increase in total revenue.
Make strategic, data-driven changes for a seamless customer journey and better sales
You won’t get far by making random quick fixes to your website and hoping for the best. Do it strategically to add the most value to your online shopping experience. Also, conversion rate optimization doesn't always mean racking up conversion numbers as such — you can increase sales by encouraging higher-margin and repeat orders It's your website visitors and your business needs that really matter. Experimentation goes a long way.