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Mastering eCommerce Conversion Rates for Business Success

Vijay Kumar

Senior Specialist - Marketing @ Shiprocket

March 18, 2024

7 min read

eCommerce conversion rate plays an important role in building your business’s success. Mastering eCommerce conversion rate optimisation is as crucial as devising strategies to drive traffic. To convert your website visitors into customers, you must understand various aspects of conversion rate. To begin with, you must have knowledge about your industry’s conversion rate to set realistic goals. Statistics reveal that the food and beverage industry has a conversion rate of 4.9% . On the other hand, the conversion rate of the home and furniture industry is 1.4%.  As you read further, you shall also learn about the connection between conversion rate and return on investment, the significance of conversion rate and how to accelerate it. So, let’s get started!

What is the eCommerce Conversion Rate?

eCommerce conversion rate indicates the ability of an eCommerce store to prompt its visitors to make a purchase. At times, it is even referred to as an eCommerce store’s ability to push its visitors to take action. This action may range from making a purchase, filling out a form, subscribing to a newsletter and more. By looking at the conversion rate of an eCommerce portal, you can assess its performance to a large extent.

Step-by-Step Guide to Calculating eCommerce Conversion Rate

To calculate the eCommerce conversion rate, you must take the following into account:

Total purchases made during a particular period – This includes the total number of transactions that took place on an eCommerce platform during a particular period (this can be a day/week/month/ quarter or any period) 

Total number of website visits in that period – This includes the total number of visitors to the website within that particular period.

eCommerce Conversion Rate Formula = Total purchases in a specific time/ Total number of website visits in the same period

The Components of a Remarkable eCommerce Conversion Rate

It is important to understand the essence of a remarkable eCommerce conversion rate. A good conversion rate is mostly said to be between 2.5% and 3%. The percentage varies depending on the industry you belong to. Companies belonging to certain industries may experience a higher conversion rate in comparison to others. You must understand the conversion rate prevalent in your particular company and not compare your progress with that of others.

Correlation between Conversion Rate and Return on Investment (ROI)

The conversion rate of your eCommerce store is directly related to your return on investment (ROI).  Here is a closer look at how the two are interrelated:

  • Increase in Revenue – A high eCommerce conversion rate shows that a large number of visitors on your website are taking action such as making a purchase or subscribing to a service. This has a direct impact on your revenue. A high conversion rate increases the revenue substantially.
  • Reduction in Customer Acquisition Cost – A high eCommerce conversion rate reflects the effectiveness of your marketing efforts. Thus, you do not have to spend high on acquiring each customer separately resulting in an increase in the ROI.
  • Increase in Profitability – An increase in eCommerce conversion rate translates to an increase in the company’s profit. It increases the ROI.
  • Basis for Business Expansion – When your eCommerce portal experiences a high conversion rate, it sets the ground for expansion. It gives the confidence that your return on investment will grow even as you expand your business.   

Detailed Statistics on Various Aspects of the Conversion Rate

Here is a look at the statistics on different aspects of conversion rate:

Website Conversion Rate

The website conversion rate for eCommerce is around 2.35% on average. The conversion rate varies based on factors such as the type of product, target audience and industry type. Your marketing efforts also impact the conversion rate to a large extent. This includes running engaging social media campaigns, leveraging effective SEO techniques and sharing guest posts on popular websites among others. It is suggested to set a conversion rate target of 2-3% for your business.

Mobile Conversion Rate

The mobile conversion rate is 1.53% on average. It is lesser in comparison because of the limitation faced due to the small screen size. Owing to the smaller size, it can be difficult to key in details and make purchases.

Facebook Ad Conversion Rate

This rate differs largely based on your industry. Thus, it is important to understand your industry-specific conversion rate before setting the goals. For instance, fitness ads enjoy a higher conversion rate in comparison to retail Facebook ads. While the CR of fitness ads is 14.29%, retail Facebook ads have an average conversion rate of merely 3.26%.

Significance of Conversion Rate for Online Businesses

Here is why a high conversion rate is important for online businesses:

Increases Revenue

A high conversion rate leads to greater revenue generation for businesses. This is one of the main reasons why efforts must be made to increase the conversion rate for online businesses.

Gives an Edge over Competitors

A good conversion rate can help in gaining an edge over your competitors. An increase in conversion rate means a greater number of visitors taking the desired action. This shows that your business understands its target audience better and can prompt them to take action. This gives you a competitive advantage.

Appropriate Allocation of Budget

By understanding which strategies and campaigns are driving more conversions, you can allocate your budget strategically to channel your marketing efforts in the right direction. Data-driven strategies help optimise results. In addition to driving better results, they help reduce the overall expense involved in the process.

Decreases Customer Acquisition Costs

Businesses can attract better leads and improve their sales by analysing conversion rate data. This helps reduce the cost involved in acquiring new customers.

Higher Customer Lifetime Value (CLV)

A high eCommerce conversion rate helps in gaining better customer lifetime value (CLV). This is a key metric in gauging a customer’s value to a business in the long run. Converting visitors into customers increases the chances of repeat purchases. It helps businesses develop better customer relationships and build brand loyalty.  

SR Checkout: How it Can Help Your Business’s Conversion Rate

Shiprocket facilitates a quick and seamless checkout process that helps boost your business conversion rate. Let us take a closer look at how this works:

Better Customer Experience – By offering a one-click checkout, Shiprocket enhances the customer experience. It provides multiple payment gateway options for customer convenience as well as to increase the chances of conversion.

Low Cart Abandonment Rate – It has been observed that it reduces the chances of cart abandonment by 25%.

Increase in Conversion Rate – Shiprocket checkout is known to increase the conversion rate by 60%.


To grow your business, it is essential to increase your eCommerce conversion rate. CR is directly related to your business’s return on investment. It helps increase revenue generation, gives an edge over your competitors, decreases the customer acquisition cost, increases customer lifetime value and enables appropriate allocation of marketing budget. It is important to plan and implement effective strategies to increase your conversion rate. Shiprocket checkout can help boost your business’s conversion rate.

Is there any tool that can help increase the eCommerce conversion rate of a business?

You can increase the eCommerce conversion rate of your business by using Google Analytics. It gives an insight into how long your visitors stay on your website, where they come from and whether they are re-visiting the site or not. It also provides information about the interaction that led to the conversion. By analysing this data, you can build strategies to increase your eCommerce conversion rate.

Does offering free shipping increase the eCommerce conversion rate of a business?

Yes, online shoppers look forward to free shipping. It has been observed that many shoppers abandon their carts after learning about shipping charges. You can boost your conversion rate by offering free shipping.

Suggest a few strategies to increase the eCommerce conversion rate.

Some of the strategies to increase eCommerce conversion rate include offering reasonably priced products, providing limited-time coupon codes, ensuring a smooth checkout process and using live chat software and chatbots.

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