A critical KPI (key performance indicator) for online sales is conversion rates. How many sales are you making for every 100 visitors to your website? There is not one right answer for every store; the higher the KPI the better.
The average conversion rate in 2016 was 1,33% across industries. The top performers was running at a 3,6% conversion rate.
What impacts conversion rates?
- Mobile traffic has a big impact on conversion rates. It is about half the conversion rate of desktop traffic
- Industry: The industry you are in. Many e-commerce shops now include a wide range of products
- Products and Price: Types of products and price of these products, especially niche onlineshops
- Traffic source: Where is the traffic coming from?
- Urgency of the purchase: More urgent purchase (like for a birthday, or anniversary or holiday) will help push sales (people need a reason to buy now or they delay the purchase)
- Delivery times: How long will it take to get the product to the client? Longer delivery times impact results negatively. People like instant gratification
- Payment methods: What options for payment are available (trust here is a BIG factor)
You need to compare your results with other similar stores in your industry. These stats are not always readily available. Some online searching will help.
Also; look at each advertising channel and determine results from there.
Email is still the #1 performing channel. We use marketing automation to improve results. This helps and supports your marketing efforts.
First time buyers and second purchases must also be part of your KPI. Different marketing tactics and promotions are needed for each stage of the buying process.
Segment your customers. It is important to have micro-conversations on an individual level. This means segmenting your shoppers into groups and offering specific products according to their likes and interests.
Merchandising your shop is as important online as it is for a real shop. People buy with their eyes. If your online shop lacks quality pictures your results will suffer. Have multiple images of the product. Some shops also show how the products are used. You may also use video for demonstration purposes.
Also change and update your shop regularly. People always wonder what is new. If they visit your e-commerce shop today, and again next month seeing the same products on offer they will lose interest. Keep and make it exciting. Update products in your store, show new arrivals (new stock), clearance sales, deals and promotions.
Have events for higher shopper engagement. These events can be online Facebook live events; webinars; live video or in-store events. Be creative and showcase your products during these events. Add value during your event. This builds your credibility.
Make a big uproar when someone buys. Do the same when new stock arrives.
The online shop world is becoming more competitive. There is a learning curve. Entry to market is very low compared to running a retail store.
In South Africa online retail sales has passed the critical 1% mark. Now is the time ensure you are ahead of the curve. The alternative is facing fierce competition in 2 to 3 years time. Your competition is not only the store around the corner, it is EVERY other online store competing for the attention of your shopper!