What is a Good Conversion Rate for E-commerce?

A website’s conversion rate illustrates how successfully a brand can use its online presence to transform traffic into revenue. When a conversion rate is low, it means that a business may be losing out on lucrative leads and prospective customers.

This is a nightmare situation for marketers, as it means that an e-commerce site simply isn’t performing as well as it should. However, a low conversion rate can be corrected, and the solution may actually be relatively simple. In this article, we’ll delve deeper into what a good conversion rate is and how a site can be optimized to encourage visitors to stick around.

Conversion Actions on an E-commerce Site

Let’s start with a brief refresher. A conversion is any desired action taken by a visitor on a website.

Examples include subscribing to a newsletter, downloading a guide, or making a purchase. The conversion rate is the percentage of visitors who perform one of these predefined actions.

For e-commerce sites, the most relevant conversions are usually signing up for a new account, adding items to a cart, saving products to a wishlist, and completing a purchase.

The conversion rate is useful because it tells you how successful your website is at guiding visitors into and through the sales funnel. A high conversion rate demonstrates that your website is successfully convincing visitors to become leads or customers, while a low rate indicates that there is room for improvement.

The practice of crafting and finessing a website to bring about the highest possible number of leads or purchase transactions is known as conversion rate optimization. There are several techniques to try, which we’ll look at later.

Conversion Rates Across Sectors

Conversion rates on e-commerce sites can vary widely across different sectors. This is due to the nature of the industry, the immediacy of purchase requirements, and the value of transactions.

We can start to see some of the lowest-performing sectors from Littledata’s information, combined with Econsultancy’s Performance Benchmarks tool results on e-commerce conversion.

Low conversion rates: Home Furnishings (0.4%) and Home & Garden (0.6%)

When making decisions about products for the home, consumers tend to spend a substantial amount of time researching and comparing their options, particularly when purchasing a high-ticket item.

People shopping for home and garden products are also more likely to purchase in a brick-and-mortar store. While they’re likely to perform initial research online, they often like to see it in person before committing. Think about the last time you purchased a sofa, for example.

It might look perfect online, but you’ll only know for certain whether it’s the right investment once you’ve sat on it. The majority of people are unlikely to take a risk on such a high-value purchase, which explains the extremely low conversion rate.

Low conversion rates: Travel (0.7%) and Tourist Destinations (0.7%)

Again, travel and tourism website conversion rates are low due to consumer behavior. In this sector, widespread research is commonplace. Someone will rarely make a booking on their first visit to a travel website.

Most travelers will perform price comparisons, check offers across different providers, and reach the final stage of the booking process without putting any money down – to check that the final price is within budget.

To add, travel agents tend to make all of the arrangements for those choosing to holiday through a travel agency, which means that fewer people are online ‘converting’ themselves.

But some sectors are performing well, including:

Good conversion rates: Personal Finance (2.9%) and Finance (2.5%)

E-commerce sites within the finance sector include those for banks, building societies, and insurance providers.

The latter is fairly unique, in that insurance providers tend to receive a substantial bulk of visits from people who have been referred by price comparison sites. These prospective customers are already warmed up to the product on offer and have largely made a purchasing decision before they even land at the provider’s site.

Meanwhile, banks benefit from the strong pull of customer loyalty. Whether born of trust, risk aversion, or simply convenience, consumers tend to stay with their existing bank rather than have a portfolio of accounts across several institutions.

The internet banking revolution has made it easier than ever for people to manage their money, but interacting with a single app or website will always be a more streamlined experience than switching between several just to pay the bills.

Good conversion rates: Food and Drink (2.4%) and Food (2.1%)

While online grocery shopping has been an established part of UK consumer behavior for more than a decade, it’s still in its infancy in the US market. But interest is growing, and research has shown that a whopping 75% of consumers stick with the first retailer they order from. This explains, in part, the high conversion rate of food and drink sites.

Another component is the explosion in popularity of ordering takeaway food online. In the UK, the sector for home delivery is growing at ten times the pace of the wider eating-out market.

Familiarity with a brand, as well as customer loyalty schemes, can be powerful pulls for consumers. Restaurant delivery sites and apps such as Postmates, Deliveroo, and Uber Eats have rapidly taken hold of the market, and by offering access to infinite restaurants under one umbrella, consumers are not bound to the same meal every time they want to order takeout. These services are therefore able to tap into the trend for exploring new cuisines, which helps to explain their conversion rate.

Unlike high-ticket items that are expected to last a long time, such as home furnishings, food and drink decisions are relatively inexpensive and transient, making them low risk.

Therefore, consumers are less inclined to shop around before making a decision – after all, one underwhelming meal is far less risky than an ugly sofa!

Conversion Rates Across Different Locations

The global average e-commerce conversion rate falls between 1% and 4%. There is, however, a substantial disparity between countries.

While e-commerce sites in the United States hover around the global average with a rate of 1.4%, the United Kingdom has an average conversion rate of 1.8%.

In the Eurozone, Germany and the Netherlands both have a conversion rate of 1.4%; France hits an average of 1.1%, while Italy lags at 0.99%. Meanwhile, the conversion rate leader in Asia is Vietnam, with an average of 1.3%, while Singapore comes in at 1.1%, and the Philippines at 0. 8%.

The reasons for this disparity are nuanced, and it’s difficult to conclude without a thorough cross-analysis of each market. However, a clue lies in broader consumer behavior trends.

How to Improve Conversion Rates for E-commerce

The key to boosting conversion rates lies in optimizing an e-commerce site to prompt desired actions from visitors. There are several tactics to try, including: Tailor to Your Ideal Customer, A Virtual Showroom, Make Conversion Easy, Don’t Overdo It, Show Off Rave Reviews.

If your store gets traffic but sales are softer than they should be, your ecommerce conversion rate is doing the talking. It’s one of the clearest signals of how well you’re turning customers’ interest into action, and where small issues may be costing you revenue.

Ahead, you’ll learn how to benchmark your conversion rate, spot the friction points killing sales momentum, and make practical improvements that lead to more checkouts.