If you run an online store, you naturally want one thing above all: to sell products. Now, even the greatest optimists are certainly aware that not every visitor can become a customer - but achieving the best possible ratio here is nevertheless the foundation of lasting e-commerce success. For this reason, the relationship between the sessions of a store and the actions desired by the operator, for example product purchases, has its own name: It is the so-called conversion rate, a metric you should definitely know. In addition to a pure definition of the term, in this article we want to introduce you to some influencing factors of the conversion rate and give you tips for optimizing your conversions.
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What is the Conversion Rate?
Let's start with the basics. What exactly the conversion rate describes, we have already roughly mentioned at the beginning: It is the ratio of the conversions of a website or an online store and a reference value. The latter can vary slightly depending on where you read your conversion rate from. For example, if you are running SEA and are looking at the conversion rate of your Google Ads, the clicks generated by your ads within a certain period of time are used for the calculation. The Shopify conversion rate, on the other hand, is derived from the ratio of sessions and conversions, and the same applies to some analytics tools such as Google Analytics, for example. Since the conversion rate is a relative value, it is given as a percentage:
This results in the following calculation formula:
And what exactly are conversions? That basically depends on the operator or what the operator defines as a conversion. Depending on the company's purpose, conversions can be, for example, leads to certain web pages, the submission of a form and/or the entry into a mailing list. Since generating product purchases is the primary goal for online stores, these are crucial for online store conversion rates. This also applies to the Shopify conversion rate.
Speaking of Shopify, you can determine the conversion rate of your Shopify store from the backend. You can find it in the "Statistics" tab.
What is a good Conversion Rate?
In order to be able to judge whether your conversion rate needs optimization or not, you first need to know which measure to use. Shopify knows this, too, and has published a conversion rate calculator for various target markets, company sizes, and industries for this purpose.
Depending on which parameters you set, the results vary greatly. They range in the single-digit percentage range between one and five percent. It is true that larger companies traditionally have better conversion rates thanks to higher brand awareness. However, this does not mean that you, as a competitor with a small market share, have no room for optimization, especially since the figures are only rough guidelines. In the following, we will show you some metrics that are crucial for conversion rate optimization.
Metrics for conversion rate optimization
If you want to increase your Shopify conversion rate or improve the performance of other systems, you need to know other metrics besides this one. We will now explain what these are.
1. Bounce rate
Visitors who leave your website without any interaction cannot become customers. Consequently, bounce rate is one of the elementary metrics for conversion optimization. Like the conversion rate, the bounce rate is also expressed as a percentage. What is a good and what is a bad bounce rate is difficult to answer across the board, as it can vary greatly depending on the purpose of the business. Experience shows that online stores often have bounce rates of between 30 and 40 percent. However, it should be clear that a reduction in the bounce rate is always positive for the performance of your web presence.
Note: In the new version of Google's analysis tool, Google Analytics, which is often used for conversion optimization, there is no longer any mention of a bounce rate. Google has introduced the so-called engagement rate with Google Analytics 4, which is nothing more than the reciprocal of the bounce rate.
2. Shopping cart abandonments / Abandoned checkouts
Shopping cart abandonments are a nuisance for any store operator, as users were obviously about to complete a purchase, but for some reason did not do so at the last moment.
Because these users were already so close to conversion, you should definitely get to the bottom of your shopping cart abandonments.
Reading tip: You want to win back lost customers? In our blog, we have compiled the most important do's & don'ts for you.
3. Loading speed / Pagespeed
Have you ever left a website prematurely because it didn't load completely even after waiting for several seconds? If yes, then you might understand the impact that the loading time of a page can have on its conversion rate. According to statistics, a direct correlation can be seen between the loading speed and the aforementioned bounce rate: If the loading time is more than 3 seconds, the bounce rate increases by a third. At 6 seconds, it is already twice as high. (Quelle: onlinehaendler-news.de)
Shopify also has an evaluation of the loading time, you can reach it as follows:
In backend > statistics > reports > behavior > show all > online store speed
Our sample store is comparatively slow with a speed score of 31 points. 100 points would be the maximum here.
LESETIPP: Eine bessere Optimierbarkeit der Ladezeiten ist nur einer von vielen Vorteilen sogenannter Headless CMS. Was das ist und wie Sie Shopify Plus Headless betreiben können, erklären wir Ihnen in diesem Blogbeitrag.
4. Average position / Rankings
Website operators want to increase their visibility as much as possible, i.e. the search engine rankings should contain as many top 10 positions as possible and of course one would also like to rank first for some terms. While this need is understandable, many SEOs nevertheless hastily draw a direct connection between average position, also referred to as rankings in some tools, and conversions. They follow the assumption that more clicks automatically result in more conversions. Unfortunately, this is often not the case, because quality also takes precedence over quantity when it comes to SEO. To let your rankings flow meaningfully into your conversion optimization, you should separate relevant and irrelevant search terms and optimize your page for keywords that make sense for you. It makes sense to think about your target group beforehand and define terms that you want to be found for.
How to increase Shopify Conversion Rate
Some practices have proven to be effective in conversion rate optimization, which we would like to present to you in more detail below.
Make changes step by step
Conversion optimization is not a sprint, but a marathon. Many companies make the mistake of relaunching their entire web presence with the aim of increasing their conversion rate. This can work, as it brings the online store up to current technical standards and (hopefully) makes it more appealing to customers. The whole thing becomes problematic if the desired effect fails to materialize. A relaunch naturally involves a whole raft of changes. How these interact and which measure has which effect in detail is not comprehensible due to a lack of data.
For a targeted optimization of the conversion rate, it is therefore advisable to implement changes step by step. Only make individual changes to your page and give them time to actually unfold their effect before you readjust and/or introduce further measures.
Use A/B-Tests
A/B testing allows you to see exactly which version of your website achieves which conversion rate. Traditionally, two variants, A and B, are served to your users. While one group gets the original version of your store, you can show a modified variant to the other. This should be done in correspondence with the previous point: In order to be able to accurately evaluate which measures are good and which are bad for optimizing your conversion rate, you should change variant B compared to variant A only in individual points.
To be able to perform a meaningful A/B test, you should determine a sufficient sample size. This can be done with the help of sample calculators, for example the free calculator from AB Tasty.
To determine the sample you need four values, the last of them, Statistical Power or also known as selectivity, is already given. We will briefly explain all the other values:
Conversion Rate: this value indicates your current conversion rate.
Minimum Detectable Effect: Is the change in conversion rate you want.
Statistical Significance: Statistical Significance is, simply put, the risk tolerance of your Conversion Rate Optimization. If statistical significance is not met, your winning variant may actually be false-positive.
In our example, we want our current conversion rate of 5 percent to change by at least 10 percent. To observe this with a statistical significance of 92 percent, we need a sample size of at least 25,923 sessions.
Numerous tools exist for the actual execution of an A/B test, for example Google Optimize, which is closely related to Google Analytics. In addition, there are also numerous Shopify apps for A/B tests.
Reading tip: We have compiled a list of the best apps for Shopify Plus for you.
Ask your costumers
Our example already shows that A/B tests are rather a means of conversion rate optimization for large companies. If your store has only little traffic, you will not be able to achieve the required sample size, or only over a very long period of time.
Customer surveys, on the other hand, are an effective tool for every company. With the help of apps, e.g. Survey, Feedback & Polls, feedback loops can be easily integrated into Shopify, which can give you valuable insights into the user experience of your store. To ensure that your customers actually make the effort to participate in your survey in the first place, you should create appropriate incentives. Discount codes are a great way to kill two birds with one stone: not only do you get insights about your store, but you also give users a reason to store with you again.
Use Heatmapping
Heat maps can be used to create video recordings of your visitors' sessions. You can see exactly how users moved across your website, which can also give you valuable insights into your online store. Based on the results, you can reposition certain elements of your site to improve the user experience, which can have a noticeable effect on the conversion rate.
Note: In order for heat mapping to take place in a DSGVO-compliant manner, you must explicitly refer to the use of corresponding tools in your privacy policy and block elements or pages on which personal information can be entered from being recorded.
Set up a CDN
A Content Delivery Network, or CDN for short, is used to store media such as images and video material on an external server network. The files are automatically compressed by the system, which usually reduces their file size by 50-70 percent. When your site is accessed, the data is delivered at lightning speed, which usually shortens your load times significantly.
If you use Shopify or its Enterprise solution Shopify Plus, you don't need to do anything else. The store system automatically uses a CDN and cooperates with the providers Fastly and Cloudflare for this purpose.
Conclusion
Conversion rate optimization should be a declared goal of every e-commerce company. Many sessions are of no use to you if users don't convert and you can't generate sales. We hope this post could give you a good insight into the definition of conversion rate, its meaning, important metrics and some measures for optimization.
If you need help optimizing your Shopify store or want to migrate to Shopify, feel free to contact us!
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