Conversions count for everything in eCommerce. Particularly during a time where maintaining customer loyalty is becoming one of the most difficult obstacles to overcome in your business.
But there's an inconvenient truth brands won't always admit. Yet it's one they need to face: curiosity doesn't always equal online sales.
A survey conducted in May 2020 estimated the average global conversion rate was roughly 1.3 percent across all devices, further suggesting that any rate higher than 3.3 percent could land sellers in the top 20 percent of best performing listings.
How do you improve your conversion rate if consumer habits seem to change daily?
Making Sense Of Your Conversion Rate
It's common to define conversion rates solely by the percentage of customers who ultimately make a purchase, with that percentage being calculated by the total number of purchases divided by the total number of sessions.
But while that percentage is a key performance metric, it's also a variable one by default.
Seasonal fluctuations, demographic growth and expanding market potential can influence your conversion rate optimization (CRO) just as much as your sales revenue, whether you're Amazon exclusive or operating your own online store.
Other KPIs which affect your CRO can include:
Overall traffic
Social media shares
Cart add-ons
Average session duration
Relevancy to new markets
The number of bounce rates vs return visitors
Minimum advertised pricing advantage
Promotional email signups
Unfortunately, these are rarely predictable metrics at all. That's largely because digital commerce is not necessarily predictable. And that's particularly true for new brands. Forecasting based on demand can seem impossible when you don't know what that demand even looks like.
5 Key Factors Influencing Demand Forecasting
Previous eCommerce sales history based on both category and individual SKUs
Profit margins based on seasonal vs. year-round performance
Average disposable income of your target audience
Market saturation and retail eCommerce platform competition
National and global economic factors, including unemployment rates, job growth, GDP and inflation
Conversion Rates on Amazon
With Amazon becoming the predominant search engine for consumer purchases, it's not always easy to convert casual browsers into brand advocates. A recent survey from AI analytic firm Adept mind indicated that almost 60 percent of shoppers are increasingly frustrated with their search results, citing irrelevant outcomes as their chief concern.
What's true for Amazon may be true for online shopping as a whole. Precision and refinement may be vital in converting idle screen shoppers to loyal converts; but with global retail eCommerce sales now estimated to represent nearly a quarter of all retail sales in 2022, the need for precision and refinement is as much subject to changes in consumer habits to changes in eCommerce business models.
As early as 2015, data compiled by Mill ward Brown Digital found that the average Amazon conversion rate was approximately 13 percent, reaching all the way up to 74 percent for Prime members.
Except what those numbers don't tell you is that a high conversion rate is not the same as a successful product on Amazon.
While a 60 percent conversion rate on Amazon might seem laudable, that figure becomes less impressive if you only receive ten visitors to your storefront in the course of a week—particularly if you're ranking much lower in Amazon search results than your competitors.
The Why of Conversion Rates on Amazon
There's only so much that conversion rate data can provide. While that data can give you an applicable and quantifiable measurement to work with, they don't address exactly why shifts in consumer trends occur so rapidly.
They don't measure the need for a marketing campaign which addresses consumers directly. And they don't qualify your product's innovation and product development. The most they can provide you with is a verifiable ratio of sales volume to spending.
But on Amazon, that counts for more than you might think.
New sellers can frequently be dismayed to find that marketing solutions which proved profitable through other channels don't always translate to the Amazon retail landscape. That's because a customer-centric approach doesn't just demand an entirely new suite of solutions. It demands an entirely new way of thinking.
How to Measure Your Conversion Rates on Amazon
After logging in to Seller Central, navigate to Reports and click on Business Reports
Navigate the top menu bar to Detailed Page Sales and Traffic Reports by Child Item, or Detailed Page Sales and Traffic Reports by Parent for a more in depth look at all variables in your product lines
On your Sales and Traffic Report, your conversion rate will be listed under Order Item Session Percentage
Note that this row can only give you a rate based on all products currently listed. To obtain a rate for individual SKUs, choose the “by ASIN” option
There's a number of performance indicators in your Sales and Traffic Report, including sessions, page views, unit session percentages and Buy Box sales.
An ideal benchmark for your unit session percentage, for example, should be roughly 10 - 15 percent, particularly if you've already developed a brand following. Newer brands may see a unit session rate between 7 and 10 percent, allowing for a higher percentage in seasonal products.
Keep in mind that your Sales and Traffic Report automatically defaults to the past 30 days, which is one reason why we recommend constant reevaluation and optimization of your listings. But developing business processes to adequately measure your conversion goals on Amazon requires both time and consistent performance—two factors that small businesses aren't always in a vast supply of.
Tips on Improving Your Conversion Rates
Measure Intent, Not Impulse
When is a conversion not a convert?
When it fails to convert to customer loyalty. Despite reports of an 18 percent increase in impulse purchases during the height of the pandemic, the fact remains that impulse buys are frequently limited to a single purchase.
They're hardly a reliable barometer of your potential volume. They may affect your short term CRO, but they rarely provide a baseline worth measuring.
Research shows that increasing customer retention by as little as five percent can increase profitability by as much as 25 percent. Shoppers want both diversity and personalization; and they're willing to pay more for it.
If you're seeing an uptick in 1-click shopping on a single product during the holidays, that's not necessarily an indicator of year-round sales performance. But if you're seeing that same product line consistently gaining high duration visits in excess of two minutes, the purchasing intent of those visits are much higher.
Compare your sales volume to your competitors, and see what advantages they're providing over your own long term traffic.
Optimize for Off-Amazon Mobile Commerce
Global retail eCommerce sales through mobile commerce reached just shy of $360 Billion in 2021, and it's not hard to see why. Both online and physical shoppers are plugged in constantly, and the need for remote delivery of information, marketing and promotional materials has never been greater as our lives become more and more distant.
While many brands will choose to sell through retail eCommerce platforms that are already optimized for mobile commerce, online marketplaces have one gaping flaw: the lack of personalized experiences. Promotions, customer engagement and marketing materials can be critical when ensuring customer loyalty. A wider exposure may gain you more customers, but more customers won't necessarily equal a loyal customer base.
A September 2022 survey found that the average mobile commerce conversion rate was roughly 1.0 percent; considerably less than the average rate on Amazon across all devices. But as mobile technology continues to grow at an increasing pace, mobile accessibility and optimization will continue to influence how people shop.
That includes your off-Amazon business. Creating limited-time mobile specific promotions, either through your existing email list or SMS prompts, can convert shoppers who may be casual Amazon browsers into staunch brand loyalists. Prominently displayed buy buttons and time limits can work wonders in speeding up mobile conversions by triggering a customer's 'fear of missing out.'
It may seem like a short term solution. But it's a valid one which creates followers and helps build your brand's tribe. And in 2022, there's no such thing as a tribe that isn't connected through mobile.
Sell Your Benefits, Not Your Product
Long term traffic may signify high buying intent. But it also implies meeting an unfulfilled gap in customer needs.
The average consumer typically has up to 10 tabs open on their browser at any given time. But it's not always because of quick access or easy distraction. If customers are in the process of product research, they're likely in the middle of comparison shopping.
Customers don't always have the time to read through lengthy descriptions. They're interested in the facts, the whole facts and nothing but the facts. And they don't just want to know how they fit into your brand narrative; they want to know what your brand narrative can do for them.
Constructing an effective keyword research strategy based on the benefits of your product isn't always just a question of defining trends in your market but defining a solution—a solution which should be aligned with all aspects of your marketing, from your landing page to your Amazon presence.
Consumers have more than enough clever slogans and enticing graphics at their disposal. But they need solutions more than they need window dressing. And so do brands.
Make It Easy on Your Customers
Conversions depend on customers, not on a distant science. The end result may be cold, hard data; but cold, hard data is driven by customer needs. And those needs can seem contradictory at times.
Consumers may demand diversity in content and purchasing options, but they also demand a singular customer experience across all channels—not just eCommerce platforms. Consumers may shop online out of convenience, but they're willing to wait longer times if their purchase is something they can truly believe in.
Above all, they demand choice and personalization.
Hard sell tactics are obsolete in marketing, whether in brick and mortar or in eCommerce. Customers may want credibility from online retailers, but they also want to feel like they're more than just a consumer; and that's largely because one of the chief reasons for the success of eCommerce is the inherently democratic nature of any digital exchange.
Make certain your campaign is rich in information, not hyperbole. Make certain your visuals reflect their lifestyles and needs, not an unrealistic ideal. Establish mutual trust, not a one way trade.
In short? Convert without converting.
Conversions: A Never Ending Story?
It's no longer enough to capitalize on the right market with the right product at the right time in digital commerce. Whether it's A/B testing or investing in PPC advertising, you need both quantifiable results and solutions for success—not wishful thinking.
Results and solutions change constantly. What was effective in electronic commerce in 2018 may not necessarily meet the demands of a post-pandemic world. Priorities change and so does customer experience. And if you're not careful, you may fail to adapt. Conversion rates aren't a guarantee of success.
But innovation and experience is.
And neither innovation nor experience ever sleep.
Color More Lines knows how to drive the conversion rates you need to succeed on Amazon and beyond. Find out more at Color More Lines.