eCommerce Conversion Rate Benchmarks – Are You Doing Better Than Industry Standards?
eCommerce has become an integral part of our lives, both personally and professionally. This is pushing businesses operating in this space to become more digital in their offerings and activities. To grow website traffic and engage more customers, marketing and sales strategies have to be backed by accurate and authentic data.
As an eCommerce player, your growth is dependent on conversion rates. Read on to develop an understanding of some crucial factors that drive the eCommerce conversion rates.
What is eCommerce conversion rate?
The eCommerce conversion rate is the ratio of transactions to sessions, expressed in the form of a percentage. For instance, a ratio of one transaction against every ten sessions would make for an eCommerce conversion rate of 10%.”
Used in conjunction with other critical metrics, conversion rate serves as an excellent barometer to measure the health, performance, and competitiveness of your online store. The higher the conversion rate, the better the customer value proposition and lower the customer acquisition cost. To make any meaningful improvement in conversion rates, it is important to take an audit of your current conversion rate.
What is the mean conversion rate for eCommerce websites?
As per Monetate, the average eCommerce conversion rate ranges between 1% and 4%, with global figures standing at 2.58% across devices (as of Q2, 2019). But, significant conversion rate disparity exists across sectors, countries, devices, seasons, marketing strategies, and the like.
For instance, the average conversion rate for the health and wellbeing market was 3.44% in Feb 2020 as compared to 2.70% for the kitchen and home appliances market. As per a Smart Insights report, the US eCommerce sector has a conversion rate of 1.4% while the corresponding number for the United Kingdom is 1.8%.
Therefore, it’s important to develop your key eCommerce performance indicators (KPIs) as well as to take into account market-specific nuances while analyzing the average eCommerce conversion rate of your industry.
Similarly, if you’re comparing the conversion rate of your company with competitors, be mindful that no two businesses can have the same conversion rate. Several factors come into play – your targeted audience, geographic areas of business, products or services sold, penetration in the market, and more. As per Recurly, Amazon boasts of a 13% conversion rate, which is nearly 7x the average industry standard.
eCommerce conversion rate by industry
When drafting in-house goals and benchmarks, referring to market-specific conversion rate standards can prove to be highly valuable, especially to gauge the general and overall performance of your eCommerce store.
IRP Commerce is one of the best sites to study market data.
The graph below shows the average conversion rate of various eCommerce industries as of September 2019.
eCommerce conversion rate by country
When formulating your KPI’s, it’s essential to consider benchmark conversion rates of leading commerce countries. The conversion rate you’d expect from the Netherlands, for instance, will be quite different from that of the UK. This difference in conversion rates is driven by many factors.
- Mature markets: Mature markets with well-established online brands generally have higher conversion rates, while those where eCommerce is still trying to penetrate and facing stiff competition from brick-and-mortar stores will naturally churn a lower conversion rate.
- Purchasing power parity (PPP): PPP is one of the primary differentiating factors. Besides a country’s inflation rate, its economic growth rates, consumption pattern, and demographic changes also significantly affect the conversion rate.
- Credit card penetration (CCP): The global dynamics behind credit card penetration (CCP) has been quite unpredictable. For instance, Czechia marks credit card penetration of about 25% only (as in 2019) against a relatively high penetration in two of the non-EU regions – Russia and Ukraine. Hence, the eCommerce conversion rate here ought to be correspondingly different.
- Logistics and distribution: Not all countries across the globe have the presence of a robust logistics and distribution network. That is why eCommerce businesses in many countries are unable to meet high-velocity demands. This again accounts for a low conversion rate in many countries as compared to some others.
Knowing the country-wise conversion rate serves well, especially when you’re planning to expand your market base. This kind of information helps make necessary amendments to your KPIs and prepare foolproof business strategies for sure wins. This is where developing an understanding of your conversion funnels can come in handy.
eCommerce conversion rate by channel/source
Besides the industry and country-specific conversion rates, segregating the conversions based on traffic source is important. These figures help define channel-specific goals while helping to identify the best-performing and most promising traffic sources. As per the latest stats gathered from industry-acclaimed statistical sources, referral traffic is by far the best performer, getting maximum conversions, followed by emails, and social media.
Every company, including eCommerce stores, run a series of initiatives to highlight their offerings – either through featured product roundups, guest posting on authoritative sites, social media campaigns, implementing SEO strategies, or running Google Ads. Each such activity helps lure visitors to your site, further increasing engagement. On closer look, you’ll realize that every channel works towards increasing referrals, in turn boosting eCommerce conversions.
As is evident from the graph below, the performance of each of these traffic sources is fairly consistent across industries. However, in some cases, acquisition channels can serve as better mediums than others. For instance, emails in the case of the food & drinks sector.
Meanwhile, Facebook remains one of the more favored social media channels to drive high traffic and conversions across industries like Fashion, Beauty & Wellness, Electronics, and Food & Drinks. Besides being home to billions of people, the medium’s visual component (images plus videos) and communication feature makes Facebook the go-to channel for product promotion for the above-mentioned sectors. Effective usage of visuals is a powerful tool for improved conversion rates.
Average eCommerce conversion rate by device
Benchmarks related to specific devices, typically desktop, smartphones, and tablets, need to be considered when formulating KPIs for generating high conversions. As can be interpreted from the data below, conversion rates for large-screen devices such as desktops and tablets are approximately 2x as compared to the ones from mobile devices.
eCommerce conversion rate statistics in 2021
- The average desktop conversion rate is about 2.1% against 3.32 % on tablets.
- 61% of consumers rely on online reviews before making a purchasing decision.
- Best-performing websites usually showcase a conversion rate of 11% and more.
- The average conversion rate of Facebook ads is about 9.21%.
- While the sporting goods industry witnesses the lowest average eCommerce conversion rate at about 2.35%, the food and beverages industry marks the highest average eCommerce conversion rate of about 4.95%.
- A website that is ranked #1 on Google usually has a click-through rate (CTR) of about 30%. This percentage drops to 20% if the website is ranked third and goes below 2% if it is positioned ninth or below on SERP.
- The baseline eCommerce conversion goal of an online store must be 2%+.
- Mobile devices are a much popular choice for in-store price comparisons among users.
- One of the primary reasons why people shop online is that the ability to shop 24×7.
- Industry experts predict that by 2040 nearly 95% of purchases will be eCommerce purchases.
Tracking conversion rates can be quite challenging. For eCommerce, tracking the cart abandonment ratio is critical. Only then one can identify and take corrective actions.
At VWO, we believe it’s best to adopt a focused approach to eCommerce conversion optimization. Rely on well-researched studies and sources, including Statista and Baymard, or conduct your primary research to define your website conversion rate benchmarks and KPIs.
Remember, the role of benchmarks is to help you understand the current performance of your online store. They’re not gold standards that can be replicated. A more systematic approach is to run conversion optimization A/B tests and learn what works best for your online store. Such a well-informed approach has the potential to increase your conversion rates by as much as 90%.