What’s a good conversion rate for e-commerce?

Many online store owners wonder what’s a good conversion rate for e-commerce. The answer has remained roughly the same for decades but varies from industry to industry. Conversion rates range between 1.72 and 4 percent. Aiming between 2.5 and 3 percent is a good goal.

The current average

“Conversion rates are still about 3% for most e-commerce brands,” said Zabe Agha, CEO of Metrical, on “The Business Storytelling Show.” “And that means that for the most part, things haven’t changed.”

This 3 percent rate means 97 out of 100 visitors leave without buying anything. It’s a big challenge for online stores.

Why conversion rates are low

Most shoppers don’t buy right away when they visit a website. They often compare prices and products across different sites.

“For most people, shopping tends not to be a ‘I know exactly what I want, I’m going to go get it and pick it up and go’ experience,” said Zabe.

Shoppers might check Amazon or other big retailers to find the best deal. This behavior makes it hard for stores to convince shoppers to buy from them.

Is 3 percent good?

A 3 percent conversion rate might seem low. But it’s been the average for a long time. Some industries might have higher or lower rates. Things like product type, price, and target audience can affect conversion rates.

While 3 percent is an across-the-board average, many stores aim for higher. Some top-performing stores might reach 5 percent or more.

Read next: 6 Shopify Website Design Tips

Factors that affect conversion rates

Many things can impact a store’s conversion rate:

• Product type and price
• Website design and ease of use
• Mobile-friendliness
• Loading speed
• Quality of product descriptions and images
• Checkout process
• Trust signals (like reviews and security badges)

How to measure your conversion rate

To find your conversion rate, divide the number of sales by the number of visitors. Then multiply by 100. For example, if you had 100 sales from 5,000 visitors, your conversion rate would be 2 percent.

It’s important to track the conversion rate over time to see if your efforts to improve are working. If you feel overwhelmed, consulting a CRO agency can help you implement strategies and interpret the results effectively.

Beyond the overall rate

While the overall conversion rate is important, it’s not the only thing that matters. Zabe suggests looking at where you’re losing customers in your sales funnel.

“Really look at your e-commerce conversion funnel and say, ‘Where am I losing most of the people,'” said Zabe.

You might find that certain pages or steps in your checkout process have lower conversion rates. Fixing these problem areas can boost your overall rate.

Where visitors come from can affect your conversion rate. Paid ads often bring in visitors who are ready to buy. They might convert at a higher rate.

“In most cases, what ends up happening is that people will come in from paid advertising, for example, and land on a product detail page, and a lot of them will typically bounce,” said Zabe.

Improving conversion rates

Many stores use tactics like discounts, pop-ups, and retargeting ads to try to boost their conversion rates. But Zabe warns against annoying customers:

“We want to be very careful about finding that perfect intersection between preserving brand integrity and getting the customer what they want with the least amount of friction,” said Zabe.

Sometimes, simple reminders can be effective. For example, reminding people about free shipping can increase conversion rates by 11 to 13 percent.

Read next: Maximize Sales with the Right E-Commerce Content Strategy

Beyond conversion rate

While conversion rate is important, it’s not the only thing that matters. Other important metrics include:

• Average order value
• Customer lifetime value
• Return rate
• Cart abandonment rate

A store with a lower conversion rate but higher average order value might be doing better overall than one with a higher conversion rate but lower order value.