What is conversion and what does it mean in e-commerce?

Conversion is one of the most important KPI metrics used to measure the efficiency of e-commerce.

Conversion refers to a specific predefined action that a potential customer takes in an online store. The most important desired action is, of course, purchasing, but adding a product to the shopping cart and joining the email list are also examples of conversion events.

For the success of an online store, conversions should and must be measured. This data provides valuable information on how well the online store is functioning (or not functioning) and how it can be improved.

By tracking conversions, it is possible to focus on doing the right things in e-commerce instead of spending time and money guessing on something whose effectiveness is not guaranteed.

E-commerce conversion rate

E-commerce conversions are measured using the conversion rate. Conversion rate, or conversion ratio, is the proportion of visitors who complete a predefined action.

The conversion rate is calculated by dividing the number of conversions by the number of visitors to the online store and multiplying the result by one hundred (conversions / visitors * 100).

For example, 100 / 2000 * 100 = 5%

The conversion rate essentially indicates what percentage of one hundred visitors perform the desired action, such as adding a product to the shopping cart, purchasing a product, downloading a brochure or free product, joining the email list, submitting a contact request, etc.

The higher the conversion rate, the better the online store meets the needs and expectations of potential customers, and the more effectively it also converts (sells).

By measuring and tracking conversions, it is possible, among other things, to determine how long users typically spend on certain pages on average and to improve their efficiency.

What is a good conversion rate?

A good conversion rate, which every consumer e-commerce site should at least achieve, is around 2-5%.

If the conversion rate of the online store does not reach this range, the reason for its efficiency or rather inefficiency should be examined more broadly, and the problems should be corrected through conversion optimization. We will discuss optimization further below.

Achieving a perfect conversion rate is not possible, however, as not all online store visitors have the potential to convert.

It is quite common for a purchase transaction to be interrupted when a potential customer's web browsing is interrupted or when they are comparing several options simultaneously.

A similar product may also be found at a competitor for a lower price, in which case your e-commerce must have some way to stand out and offer added value to the customer to achieve conversion.

The customer is often just at the beginning of the purchase journey, seeking information about products but not yet ready to buy.

Increase sales in e-commerce with conversion optimization

Conversion optimization is the process of increasing the conversion rate of an online store. It includes measures to improve the efficiency of the online store with the goal of converting more visitors, meaning they perform the desired action.

During conversion optimization, factors hindering purchases and other desired conversions are identified through in-depth background research and A/B testing, and these issues are resolved.

The purpose of optimization is practically to tailor the online store to the needs of potential customers and thus increase the number of conversions.

Conversion optimization increases the conversion rate

Conversion optimization increases the conversion rate and online store sales by instilling trust in the customer, fueling interest, and encouraging them to proceed from product browsing to checkout.

An optimized online store and a good shopping experience also encourage returning customers to shop again.

Seamless in online store Customer experience does not, however, arise on its own, as the right actions must be taken to achieve it..

In conversion optimization, technical (slow loading time, confusing implementation, non-functional buttons, etc.) and non-technical factors (poor product images, insufficient product descriptions, unclear return policies, etc.) that hinder purchasing and experience are minimized by improving the speed, mobile responsiveness, appearance, content, navigation structure, and functionality of the online store.

At the same time, there may be a need to work on building trust through a credible and target audience appealing brand, high-quality content that aligns with the brand and is sufficiently extensive, as well as, for example, payment and delivery methods suitable for the customer.

If the initial state of the store, i.e., the technical implementation, is really poor or significantly outdated, often acquiring an entirely new online store is a cheaper, faster, and considerably more effective process compared to optimizing a non-functional online store implementation.

It is therefore not sensible to always fix the old, at least when talking about e-commerce and conversions.

Do you want to get more conversions and boost your online store?

We create efficient WooCommerce and Shopify online stores that are pre-optimized for conversions and sales.

We also help optimize your existing online store, provided its fundamentals are in order.