Average conversion rate: ecommerce edition

Let’s talk averages

So you’re searching for the average conversion rate for ecommerce? Understandable, as comparing your company to the competition seems like a fair way to gauge how your website is performing next to others. In that case, let’s dive straight into it…

The average ecommerce conversion rate in 2019 is 2%

Source: Growcode, based on various studies (more details further down)

Note: Whilst Google Analytics will tell you your ecommerce conversion rate by default, it can also show you your user conversion rate. Instead of transactions divided by sessions, user conversion rate tells you transactions divided by unique users.

Average conversion rate: ecommerce industry specifics

If we’re dealing with averages, there are averages within this average, too… stay with me here. We can further break down this average by the industry that is selling online. This is a different study by IRP Commerce which shows the average conversion rate for each industry.

Source: IRP Commerce

Average conversion rate: ecommerce device type

Now, putting the industry aside, let’s look at the findings of a study by Monetate which broke down average conversion rate for ecommerce by device type

Data source: Monetate

You may have seen a similar trend in your Google Analytics where your mobile conversion rate is around half your desktop conversion rate.

The issues with averages

First of all, there’s no central source of data for averages, so these studies of averages are sampled and include different companies, which explains why each study is different. Here’s a graph to plot the different results of a group of studies into the average conversion rate:

We’re starting to see that averages aren’t so average after all, and those averages we showed you earlier within an specific industry depend on:

• Type of product sold
• Price
• Competitiveness
• Sales volumes
• Where you get your traffic from
• What devices people are using
• Seasonality
• Promotions

So if you’re comparing yourself to another company or your industry in general, you’ll have to consider that all of these factors could be wildly different to your company and it’s not exactly a level playing field.

What would you do if you knew your competitor’s conversion rate?

If you found out that your closest competitor’s conversion rate was 4% and yours was only 2%, what would you do? Would you panic and copy elements / journeys from their website, would you just give up? If you’re website is actually lacking in best practices then adapting may improve your situation slightly, but will only take you so far. But you also need to know that…

Your own conversion rate is an average too, and there are issues with this

“My head is in the oven, my feet are in the freezer, on average I’m a normal temperature”

Source: Somebody quite wise

Google Analytics will tell you what your conversion rate is, but this is also an average of the wide range of data within your analytics, made up of lots of smaller variables like the share of mobile / desktop devices, traffic sources, browsers, visitors’ buying intentions, buyer personas and segments, new vs returning visitors, and many more groups.

Here’s a quick hypothetical example of how your conversion rate would change if you altered the make-up of your audience, let’s say you stopped showing your ads on Google’s display network because it seems to convert relatively poorly:

If we remove display traffic from the equation, it has a significant impact on conversion rate

As you can see here, removing a poorly converting traffic source can improve conversion rate dramatically. However, this traffic source may have been very cheap to acquire and could have generated good ROI, so it may not have been a good move. What we’re saying is that conversion rate is sensitive to these variables.

Another hypothetical example: what would happen if you cut your prices in half? Your conversion rate might even double. Great! But what would your accounts department say about that? You’d wipe all your profit away and then some. Conversion rate isn’t the only metric to focus on.

There are also other important metrics to keep your eye on, metrics that these average industry reports don’t report on, such as; sales volume, average order value, revenue per user, average products per order, repeat orders, lifetime value, and more. You could have a lower conversion rate than your competitor, but if your sales volume is higher – you’re the real winner.

So how do I improve my conversion rate?

Comparisons will only get you so far, but the real mileage is optimising for your own audience.

• Stop paying for traffic that doesn’t convert
• Optimise your adwords and use dedicated landing pages
• Conduct user research on your website to find out what they need, what they don’t like, what points of friction they are encountering
• Find ways to increase average order value
• Improve the mobile experience
• Fix any bugs

If you are not opting for conversion optimisation (along with all your other important metrics), you might find yourself in a worse position in a year’s time, as there is a strong possibility that your competition are optimising their websites. Standing still just makes you more susceptible to losing customers to the competitors providing a better experience.

There’s a reason why Amazon’s conversion rate is 13% for non-Prime members, and a whopping 74% for Prime members (Source: Millward Brown Digital). It’s because they are continuously optimising for a better user experience and more sales.

Conclusion

Hopefully our ‘average conversion rate: ecommerce edition’ has enlightened you around what the average conversion rate is, why you can’t really rely on these figures, why conversion rate isn’t always the best metric to look at, and why you should be optimising for your own audience and focusing on.

If you’d like help to increase your conversion rate and sales, then Worship can help on a retainer or a project basis. Just call 0161 236 1188 or email [email protected] for a no obligation consultation call with a CRO expert.