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The unit of e-commerce, or the secrets of the conversion rate

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e-commerceIn e-commerce, the “conversion rate” shows how many visits on the page become buying during a given period. As the success of online sales depends on how efficiently you can turn passive viewers into paying customers, the conversion rate is the most important indicator in this field. Let’s say a website had one thousand visitors in the past month and ten of them bought something. The conversion rate in this case is 1%.
Having analyzed more than 13 billion e-commerce transactions, a professional blog (https://blog.compass.co/ecommerce-conversion-rates-benchmarks-2016/) found that the average conversion rate was 1.33%. If a company has a conversion rate of 3.6% or higher, then it belongs to the best-performing companies of its industry.

The following table, however, has other interesting information as well:

Total Organic Direct Google Ads Facebook Ads   Email
Average conversion rate in e-commerce 1,33 % 1,18% 1,46 % 1,55 % 1,56 % 3,84 %
Average conversion rate among the top 10% of best-performing shops 3,65 % 3,70 % 3,98 % 3,77 % 2,49 % 9,89 %
  • For the best-performing web-shops, Google ads are more efficient than Facebook ads
  • For web-shops with average performance, Google is, by and large, as efficient as Facebook
  • For web-shops with average performance, organic searches are the least efficient
  • For well-performing web-shops, organic searches are among the most efficient
  • For the best-performing web-shops, emails offer the best conversion rate, almost 10%

You should, however, not make the mistake of drawing general conclusions for aggregate conversion rate statistics, as the behavior of customers differs greatly based on the country they live in, the product in question or the price of the product.
The customer behavior of those who search for cosmetics is completely different from that of those who want to by electronic devices. Price is also an important factor and can greatly affect the conversion rate. Products that are more expensive require a more complex purchasing process than those that are cheaper; in other words, people tend to visit the same page multiple times to order a single product, which, logically, decreases the conversion rate. Just think about it: how many websites do you check before you invest in a new car, and how much time do you spend comparing prices when you want to buy a pair of socks.
Asking how to determine what a good conversion rate is for our website is, therefore, a legitimate question. To find that out, it is important not to compare apples to pears, but to compare our company to companies of similar size, business model, location, average order value and sales platform. All these factors play an important role in determining “the good conversion rate”.

Source: https://blog.compass.co/ecommerce-conversion-rates-benchmarks-2016/

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