A Complete Guide for Ecommerce Conversion Rate Optimisation (CRO)

After reading dozens of research papers and articles about conversion rate optimisation, I've developed a complete guide to Conversion Rate Optimisation - for people starting and scaling their optimisation journey.

What is Ecommerce conversion rate?

The usual Ecommerce conversion rate is the number of users purchasing your product divided by the total number of visitors on your platform. This definition is usually abbreviated from "purchase conversion rate".

Optimisely's definition takes another approach to conversion rate. Rather than using purchasing users (end step in the purchase funnel), it uses "intended action completed by the user".

This definition is mostly used in CRO optimisations as for optimisations, rather than looking at the overall funnel, next step conversion is used.

Why Conversion Rate Optimisation (CRO) is necessary for Ecommerce business?

CRO Fuzion's article summarises the necessity for Ecommerce businesses to improve conversion. With a solid conversion rate, you can increase your purchases, bookings, and interactions without changing the traffic

Conversion Rate Optimisation is a great way to optimise your resources and get the biggest return on investment, especially if you're looking at a paid ads run heavy business (true for most dropshipping stores).

Let's see this through an example, if you get 1,500,000 views on your website with a purchase conversion of 2.5% (37500 sales), the conversion rate increases to 2.8%.

Results:

With the increased conversion rate, an additional 4500 sales can be generated. Assuming an average order size of $30, an additional $135,000 is added to the revenue (with just a 0.3% conversion rate increase).

This result is without any changes to the traffic strategy...

PS. The effect of conversion rate optimisation is highest for brands with high visitors and lower conversion.

Using this analogy, why Ecommerce Conversion Rate Optimisation is necessary can be summarised in this figure:

Why purchase conversion rate is a bad metric?

A bit of a hot take - but hear me out!

Overall conversion rate aka conversion rate gives you an overall number of visitors who purchase something on your website. It can be quite useful in analyzing overall performance, but in isolation, it does not provide much value in conversion rate optimisation.

However...

If you say the website conversion rate is 1% it doesn't indicate where your website performance lacks. It's like saying 1000 is a big number. Yes, if we compare it to 10; however, what if we compare it with 1 million?

Rather...

While analysing conversion rate, you should always look at that with some comparator, which usually is through industry benchmarks. Usually, at a global level, the purchase conversion rate is expected at 2.8-3%. Hubspot, Doofinder, IRP Commerce have researched industry-level benchmarks for conversion rates.

Similarly, you can look at the funnel conversion rate, i.e. conversion to the next step of the funnel to analyse the performance better. Smart Insights has put benchmark details for the next step conversion rate.

Further, if you've launched an A/B test on a product description page, the purchase conversion rate might not be the correct metric. If something else changes further in the funnel, for example, a payment method not working, could impact the results of the test (as conversion might drop because of the unavailability of a payment method). In this case, the next step progression i.e. Add to cart and Basket progression will be the key measures.

We'll discuss these metrics in the next section.

Metrics for Ecommerce Conversion Rate Optimisation by Funnel Steps

Let's look at some of the key metrics per page type/funnel step for an Ecommerce business. Understanding these pages and metrics will be crucial for developing strategies for conversion rate optimisation.

1. Landing page

The page where users land on your website aka the first interaction page of a user with your site.

Landing page is variable depending on traffic sources (detailed definitions) and intended action; however, the primary goal for this page is to help a user navigate to the next step in the funnel, which usually is the product page.

In terms of key metrics:

1. Bounce Rate: Landing page should be focused and tailored to your ad messaging to ensure minimally bounced users.

2. Exit Rate: To maximise conversion, landing pages should have a persuasive call-to-action to ensure a minimal exit rate.

2. Product View aka Product Description Pages

Product view page refers to pages containing the details of the product.

This includes product images, descriptions, prices, reviews, and other product-level details. For a Product View page, the primary objective is to equip customers and potential buyers with comprehensive information, enabling them to make well-informed decisions.

If the users are not presented with the relevant information, most of the users exit the site. Further, for most Ecommerce businesses, the majority of drop-off occurs through this step.

In terms of key metrics:

1. Add to Basket Rate: Product pages should have one key metric i.e. the add to basket rate. Usually, this is defined as the number of times a product is added to a cart divided by the number of times a product is viewed.

If you offer subscriptions, you can add the number of product subscriptions to the add-to-cart rate as well.

3. Basket Progression aka Basket Page

Basket progression step refers to the users navigating to basket page after adding products from the product description page.

About 3% of consumers who add products to their baskets complete the transaction, therefore, improving the basket and checkout experience can result in massive conversion rate benefits.

Most key reasons for cart abandonment (including registration requirements, website security, difficult checkout process, and inability to see cost upfront) can be solved using UX and conversion rate optimisation.

Further, the basket page can be used to upsell the products. For example: you can use most brought and similar products as shown in this guide.

In terms of key metrics:

1. Cart Abandonment Rate: This refers to the number of users NOT making a purchase out of the total users who reach the basket page after adding a product to the cart.

4. Checkout

Checkout step refers to the the process a customer follows when buying items from an online store.

Losing customers at the checkout step could be quite dreadful as this is the last step on the funnel. Therefore, any drop in conversion impacts the overall purchase conversion massively.

Checkout step can be further broken into three pages: Welcome/Sign up, delivery details and finally payment options. With so many details required in the checkout step, ideally, the checkout should be seamless with minimal steps (average steps at the industry level are 5.1).

From Baymard Institute 's research, the number of form fields is inversely proportional to the checkout performance.

In terms of key metrics:

1. Checkout to Purchase Rate: The percentage of users making a purchase after reaching the checkout page.

If you offer express payments (Paypal ) you should exclude them from this metric as these users never see the checkout part of the funnel (directly skip to the purchase from basket step).

5. Purchase

Finally, the last step in your purchase funnel. Although this may seem at the end of the purchase journey, you can make this page engaging for users (and convert again in the same session :P).

For example, you can use the confirmation page to include an account signup form for users to create an account after checkout. M&S utilises such user flow.

Or even go beyond to include products in order confirmation to upsell some items by adding them to the existing orders.

Let's now look at some of the other Ecommerce CRO strategies.

10 Strategies for Ecommerce Conversion Rate Optimisation (CRO) that actually work

While compiling these strategies, I've segregated some of the basic and advanced CRO techniques that can used to improve the conversion rate for Ecommerce businesses. While developing these, I found CRO Fuzion (non-sponsored post lol) article about the framework for conversion rate optimisation quite helpful. Definitely recommend you check out their Ecommerce accelerator plan if you want help with CRO on your website. 

Let's discuss the basic CRO strategies:

Basic CRO Strategies

1. Mobile View Optimisation: This is probably the point highlighted by all the CRO guides on the web. Most traffic (77%) to an Ecommerce store is through mobile. If your website is not mobile-optimised in terms of user experience
2. Social Proof: Reviews and User Generated Content can be critical to ensuring basket progression rate. Research by Elwalda & Lu (2016) has shown that Online Customer Reviews (OCR) by third parties can increase trust and conversion.
3. Optimal Checkout Experience: From the metrics section, we know the importance of having an optimal checkout experience. The checkout should have minimal steps (including form fields) and enable a smooth experience for users to checkout.
4. Relevant Search Filters: An average of 30% of customers use site search; however only 50% of those find a relevant recommendation. Visibility, autocomplete, and search filters are crucial for Ecommerce search functionality to help customers easily find what they are looking for.
5. Delivery details: Delivery can be a big deterrent in placing orders. If the delivery cost increases the total order cost by over 25%, users will look for alternatives with cheaper delivery options. Similarly, if the delivery time is over 2-3 days, an express delivery option could help the delivery to payment progression.
6. Clear Product Information: Product description pages should illustrate the key product information including but not limited to price, images, description, ingredients, and promotions.
7. Payment Methods: Unavailability of a certain payment method can be a huge detractor for users. If your business accepts payment methods that match your customers' preferences, you will be able to reach more customers globally, reduce transaction costs and increase conversion rates. Further, Buy Now Pay Later payment options allow users to make larger purchases which they cannot pay in one go and help improve conversion rates.

Advanced CRO Strategies

1. Content Strategy: Your content strategy (if used correctly) can boost your conversion rates. Content can be used to guide users and reduce questions related to product fit. For example, if you're selling headphones, you can guide users on which headphones are best for sound quality, ergonomics, etc. through a content-led journey.
2. Customised Promotions: Customised promotions or Personalised promotions have been studied in the literature to reduce churn and increase customer value Tamaddoni et al. (2017). Through customised promotions, you can target some segments of customers to provide incentives to purchase again. Many CRO agencies can help you install systems to develop personalised promotions as these are quite complex to setup.
3. End-to-end Optimisation: End-to-end optimisation refers to unifying your product and marketing to create an end-to-end experience for your user. By integrating all stages of the customer journey—from initial marketing interactions to product engagement and post-purchase support—end-to-end optimization ensures that each touchpoint is consistent and tailored to meet user needs. This holistic approach not only enhances user satisfaction but also improves conversion rates, customer retention, and overall business efficiency.

Hope you find this useful!