Online shopping has significantly developed over the last few years. We now have far superior sales platforms, data analysis and greater sales reach. No matter what industry you are in, holidays, fashion, cars, sports being competitive online is becoming a full time job in itself.

Ecommerce has developed, to much more than just an online shop window. Online store owners must start to understand terms like conversion rate, website metrics but also have an idea of what their customers are doing when they land within their store.

Many of our Ecommerce clients will ask us to review their current online shops. We start to look at the framework i.e. what its built in. We look at the design and user experience. We look at website speed, and ease of navigation and much much more. Each one of these small steps will impact a users decision on whether they engage further within your store and ultimately to make a purchase.

Many store owners have pre-conceived ideas about the future developments of their online store, however the question we always ask is, where is the data that proves this theory? We want to ensure we have a thorough understanding of what your users are doing in store before we start to make any significant developments.

The biggest questions is, are you leveraging, developing and tailoring your website to gain its full potential?

So… what is conversion rate?

Quite simply a conversion on your website is classed as a user that takes a desired action. This could be to sign up to your monthly newsletter, or this could be a user making a sales purchase within your online store. Conversion Rate is the total amount of monthly users divided by the amount of conversions. This will give you a very basic conversion rate.

Is Conversion Rate important?

Conversion Rate is a really important and key metric when it comes to Ecommerce. Your conversion rate gives you a way in which you can measure your business profitability. The metric can act as a bench mark for forecasting future sales, and it can also be used to identify if sales are lower than expected.

Its important to understand the following;

No matter how good or bad your conversion rate is, there is always room for improvement.

Increasing online marketing budgets isn’t the answer to improving your conversion rate.

Developing and working on improving your conversion rate will give you the opportunity to lower your cost per acquisition.

Where do I find my conversion rate?

It should be possible to identify and find your conversion rate within the control panel of your website CMS. (Content Management System)

If you are unable to find the conversion rate within your CP then you can also find this metric within Google Analytics.

The Conversion Rate Calculator

 Here is a basic calculation which you can use to work out your conversion rate.

So for example if your store is getting 5,000 visitors and 50 sales within a month, your conversion rate would equal 1%.

Ensuring that your online store has the ability to create conversions and do it well is extremely important and often over looked.

What is the golden number that we should be aiming for?

Put simply the higher your conversion rate, the better your site is performing. Depending on your industry and market sector a good conversion rate could range from 2 – 3 %. However some Ecommerce stores have claimed conversion rates of 4 – 5%. On average we see most Ecommerce stores having a rate anywhere between 2 – 3%.

Whilst its good to have a conversion rate target or goal, we always suggest reviewing where you currently are and looking to make small developments that start to positively impact your conversion rate.

Your online business success is reliant on you pro-actively developing your conversion rate. So if you currently have a conversion rate of 1.5% start working towards getting it higher to 2%. Start to review areas like your target market, website speed, the products you sell and the quality of traffic your getting to your website. All these elements will start to help your strategy to improving conversion on your website.

Understand your metrics

Whilst understanding your conversion rate is extremely important, there are some other key metrics which will  help when it comes to understanding conversion.

Bounce Rate – the percentage of people leaving after viewing a single page

Exit Rate – the percentage of people who leave after viewing the page. A high exit rate on particular pages can be a page to investigate further.

Avg Session Duration – This engagement metric gives you an indication of how long a user spends on your website.

Understanding key website metrics will give you much better insight as to what users are actually doing on your website.

Grey Coffee offers bespoke Ecommerce Web Design, Conversion Analysis and Ecommerce Digital Consultancy to businesses in Nottingham and all over the UK.

We are happy to talk through any new projects or how we can support your business needs.

If you would like to get in touch with us, then email us or call us 0115 798 0699.