What are conversion rates and can e-commerce platforms increase them?
Not everyone who visits your e-commerce website will buy from you. While this is to be expected, one of the best ways of analysing the performance of your website is to consider the amount of people who purchase compared to the number of people who visit. This figure, often shown as a percentage, is called your conversion rate – it shows the number of people you have ‘converted’ from a potential customer into an actual customer. For example, if 5 people out of every 100 who visit end up purchasing, then your conversion rate is 5%.
How can my e-commerce platform increase the conversion rate?
Once you understand what a conversion rate is, it becomes immediately obvious why a retailer would want to increase it. Even a small increase in your conversion rate could result in a large increase in turnover and profit, especially if your items are expensive and have a high profit margin.
When considering e-commerce, one of the main ways of increasing your conversion rate is to focus on ‘lost shopping baskets’. This occurs when an end user has added an item or service to their shopping cart but doesn’t end up purchasing. In these cases, we can see that the customer has enough interest in the product to consider buying, but something towards the end of the transaction has made them change their mind.
Traditionally, the reason that people change their mind and leave an online transaction halfway through is the payment process. If retailers do not accept the customers’ preferred method of payment, the payment process is interrupted, or the process looks insecure, then customers will leave their baskets, and the sale will not be processed.
As such, there are three main areas to focus on to increase your e-commerce conversion rate:
- Utilise omni-channel payment systems so that all methods of payment can be accepted.
- Ensure your software provides seamless payments.
- Ensure security through tokenisation methods.
Focus on these three areas as standard and your e-commerce platform is certain to experience a growth in sales and business. Even a small change in one of these areas can offer great returns on investment, so make that change today!
October 8, 2019