Despite popular opinion, traffic is not the most important metric in ecommerce.
Seeing your traffic spike might feel great, but unless those visitors turn into shoppers, you’re not growing your store. To grow your store effectively you need to focus on driving revenue and profit; and one metric that strongly correlates with both is Conversion Rate.
Your Conversion Rate describes how effectively your store is transforming visitors into shoppers. If, on average, 1 out of every 100 visitors performs a checkout, your Conversion Rate is 1%.
Increasing your Conversion Rate will improve the results of all your marketing efforts, making it easier for you to scale. So before investing money into Facebook, AdWords, or influencer campaigns, you should explore if there are any low-hanging fruits to improve Conversion Rate.
The first step is to ensure you have accurate tracking in place measuring how Conversion Rate changes over time. Doing so enables you to understand whether changes like a new design, payment function, or additional social proof are moving the needle in the right direction.
If you’re not tracking your Conversion Rate, you can create a free Conversion Rate report here.
Tracking metrics historically is a good start because it gives you a sense if you’re moving in the right direction. And yet, whilst great for tracking your own store’s improvement, you won’t know objectively how good your Conversion Rate is.
Compass enables online stores to compare their metrics against similar stores in terms of product, revenue, and technology. This peer benchmarking allows you to learn about your individual strengths and weaknesses.
To help you understand how competitive your store is, we’re providing Conversion Rate industry benchmarks. These statistics help you understand if – and where – you need to focus your attention to increase Conversion Rate.
What is a good Conversion Rate in Ecommerce?
We’ve analyzed the 2017 performance of more than 10,000 online stores that use our ecommerce analytics app Compass to create the 2018 Ecommerce Conversion Rate Benchmark.
There are many factors that influence Conversion Rate such as product type, price, acquisition channel, and store appearance. To help you better understand what sort of Conversion Rate is the average within your niche, we’ve broken the benchmark down into different dimensions that provide you with actionable insights.
Before comparing this data to your own performance, make sure your Conversion Rate tracking works properly.
As a general rule, you should aim for at least average results in your category. However, you only get there and beyond by systematically improving on today’s efforts and successes.
We’re going to kick this off with a Conversion Rate benchmark by Acquisition Channel. Below you can see the median and top 25% Conversion Rate of more than 10,000 online stores that use Compass.
- With 5.44% median Conversion Rate, Referral is overall the best performing acquisition channel. Referral traffic is driven from external sites that link to your store. This can be an expert post recommending one of your products or a comment on a blogpost. If the traffic source is highly relevant, people often come with a strong purchase intent. This is why the average Referral Conversion Rate performs so well.
- With 5.32% median Conversion Rate, Email is the second best performing acquisition channel. Email traffic typically comes from existing customers that already know and trust you. The great thing about email marketing is that once you’ve built a decent email list you can quickly generate email traffic with personalized offers at very low cost.
- With 2.08% median Conversion Rate, Organic is the third best performing acquisition channel. Ranking well on search engines to receive significant organic traffic requires significant time and effort. Due to the need for frequent, optimized content and a long wait time before seeing results, it isn’t typically affordable for small stores. However, once you have reached a good standing on search engines you can rely on cheap, high quality traffic that tends to be quite sustainable.
With Compass you can track & benchmark your Conversion Rates in one central dashboard. Click here, to create a free Compass account.
Of course, ecommerce comprises a plethora of industries and product types; all of which convert at different rates. To help you better understand where you stand in the grand scheme of your industry, we’ve further broken down the Conversion Rate by popular product types:
- With the median ranging between 0.68% and 3.58%, it’s clear that product type has a notable impact on Conversion Rates.
- With a median Conversion Rate of 3.58%, Food & Drink is the product segment with the highest Conversion Rate overall. While the median Conversion Rate is very close to Health & Beauty (3.08%), the top 25% Conversion Rate of Food & Drink is much higher (7.24% vs. 5.24%). However, remember that food is a necessity. Everyone has to eat so the stores that offer a great service grow a loyal customer base that regularly shops with them.
- With a median Conversion Rate of 0.74%, Furniture stores have the lowest overall Conversion Rate, which is not surprising. While Furniture is a huge industry, it’s very difficult for shoppers to buy expensive furniture online without seeing it in the real world. However, this could change with tech advancements bringing in features including Augmented Reality ecommerce experiences.
To dig further into the effects of product types and acquisition channels on Conversion Rate, we’ve created a table that compares Conversion Rate by product type and acquisition channel.
- The medians of Conversion Rates range between 0.20% and 11.11%. That’s a huge spread which shows both acquisition channel and product type have a remarkable impact on Conversion Rate. While 1% might be a good Conversion Rate for Social, it would be a terrible result for Email. It’s important to evaluate your Conversion Rates in an individual context.
- Email is the highest converting channel for almost every product type, however, within certain industries, it has an even larger impact. The Food & Drink and Health & Beauty industries see a disproportionately large increase in email traffic.
- Facebook is an often favored channel in modern ecommerce. However, it performs best for very visual products such as those in the Fashion, Electronics, Food & Drink and Beauty & Wellness niches.
The above benchmarks are great to get a general understanding of where your store ranks in terms of conversion per acquisition channel.
However, there are more important factors than acquisition channel that could impact your Conversion Rate. At Compass, our algorithm creates an individual group of the stores most similar to yours among our more than 10,000 users.
By comparing your Conversion Rate against these close competitors, you get more accurate results.
To get your free custom Conversion Rate Benchmark report, simply create a free Compass account and connect your Google Analytics & Ecommerce Platform. It’s 100% free and takes less than a minute!