eCommerce Conversion Rate in 2024: Everything You Need to Know

Ecommerce businesses live and die by their key performance indicators (KPIs). Metrics like traffic, bounce rate, and average order value (AOV) offer insight into the health of an online store. But one measurement stands above the rest for telling you if your website is working as it should: conversion rate (CVR.) This percentage indicates how many visitors to your site actually complete a desired action, like making a purchase.

So how do savvy ecommerce brands crack the code to exceptional eCommerce conversion rates in 2023? Read on to uncover some helpful insights.

In this comprehensive guide, we'll explore crucial conversion rate statistics. All figures are based on our proprietary data set, gathered from 5,000 eCommerce companies and their $6 billion in ad spending (Varos, 2023). You'll see current benchmarks for online stores and what sets the top performers apart. We'll also share practical tips to improve your own website's sales funnel.

Let's get started!

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What is the Conversion Rate in eCommerce?

Before we get to crunching numbers, we should be on the same page about what conversion rate means.

Across different industries, the conversion rate compares two numbers. The top number depends on the goal, like getting newsletter sign-ups, content downloads, or contact form submissions. For ecommerce, though, the money metric matters most. The action often involves making a purchase. If 100 people visit your ecommerce site, and 5 of them complete the checkout and buy something, your conversion rate would be 5%.

CVR boils down website performance into one powerful stat. No matter the specific products sold, the conversion rate measures each customer touchpoint's impact on the bottom line. Unlike more general metrics like traffic, it offers a laser-sharp focus on sales results.

Why is the Conversion Rate Important?

Tracking conversion rate provides crucial insights into how well your web pages achieve their primary goal—guiding visitors through the sales funnel toward completed purchases. Is the messaging persuasive? Do product displays entice? Are calls to action effective? This KPI holds the answers.

Stepping back, you can think of conversion rate as an early warning system. If thousands of people visit your online store but hardly any buy anything, something must be tripping them up along the path to purchase. You successfully drove traffic to the site, but something on your pages is getting in the way of conversions.

Low conversion rates despite heavy traffic points to problems in converting site visitors into paying customers. Pages might confuse more than convince. Payment friction may stop purchasers. This represents lost sales opportunities, signaling to store owners that they need to smooth out the buying experience.

Improving the conversion rate also comes with extra perks:

• Lower Pay-Per-Click Costs: For retailers utilizing paid ads, those ad dollars are wasted if visitors don't convert. Higher conversion makes advertising dollars go further.
• Boost Digital Campaign Performance: Visitors referred from social media, email, and other digital channels are more likely to convert if the site excels at closing the deal. A good conversion rate lifts the impact of every channel.
• Improve Customer Experience: Low conversion signals friction in the purchase process. CVR helps you identify and resolve pain points. Think confusing site navigation, complicated checkout, or lack of trust symbols. 

In summary, tracking conversion rate reveals how well your site guides visitors into finalized sales. It is one of the most crucial barometers of an ecommerce store's viability.

How is the Conversion Rate Calculated in eCommerce Businesses?

Calculating the conversion equation is simple. Yet behind the formula lie complex store operations converting visitors into valued customers.

The math goes as follows: 

Conversion Rate = Total Number of Purchases / Total Number of Site Visitors X 100

For example, an online store had 10,000 visitors last month. If 300 of those visitors completed a purchase, the calculation would be:

300 Purchases / 10,000 Visitors X 100 = 3% Conversion Rate

The key variables - purchases and visitors - require a bit more explanation for accurate analysis. For visits, assess whether to measure all users or sessions instead. If the same user visits multiple times, sessions prevent double counting.

Regarding goal completion events, you must configure your analytics platform. Google Analytics, Shopify, and other tools automatically calculate ecommerce conversion rates. They track customer interactions across devices to determine sales per session. Their dashboards simplify data digestion with visual reports. 

What is the Average Conversion Rate?

So, your online store sees a 3% conversion rate. Good news or bad? Without context, conversion stats hold little meaning. Industry standards create helpful comparison points to interpret performance. Establishing baseline averages helps you set targets.

Across all industries, the average conversion rate for eCommerce websites lands at 2.9% (Varos, 2023). But these only reveal a slice of the story. Top performers in the 75th percentile convert visitors at a lofty rate of 6.4% - over double the macro benchmark. This sizable gap demonstrates the revenue lift elite merchants achieve through eCommerce conversion optimization.

Drilling down further into the latest data from the past six months, our Shopify stores saw:

• The average order value landed at $81.49
• A median abandoned cart rate of 23%
• An increase of 80% compared to the previous 6-month stretch

This positive conversion momentum aligns with the continued strength many top ecommerce merchants witnessed recently. 

What is a Good eCommerce Conversion Rate?

Interpreting conversion requires perspective. Retailers acknowledge that one standard does not fit all. Conversion benchmarks fluctuate greatly depending on the vertical, AOV, and other factors. Rates may seem "low" without considering the relevant context.

For instance, travel sites justifiably have lower conversion numbers. After all, visitors commonly research or window-shop vacations without booking. And while conversion dips, those transactions produce high-order values. High-end fashion and jewelry stores face this dynamic, too.

The takeaway? Avoid side-by-side comparisons without accounting for key variances like average ticket size and purchase cycle nuances based on the product. Within verticals, average ecommerce conversion rates represent achievable performance. 

Still, top performers play a different game. They optimize operations to smash industry benchmarks. We can't all be record-breakers, but their strategies offer lessons for boosting conversion.

Here's how top eCommerce stores across sectors stack up on conversion rates against category peers (Varos, 2023).

1. Baby & Children: 4% average, 8.5% top performers
2. Beauty: 4.4% average, 7.9% top performers 
3. Fashion: 2.6% average, 5% top performers 
4. Food & Beverage: 4.3% average, 7.7% top performers 
5. Healthcare: 3% average, 6.1% top performers 
6. Home & Garden: 2.2% average, 5.3% top performers 
7. Pets: 4.2% average, 6% top performers 
8. Sports & Fitness: 2.6% average, 5.8% top performers 
9. Wellness: 4.4% average, 7.4% top performers 

As we can see, verticals matter. A company in the "Baby & Children" category might think they are performing well with a 3% CVR, as it surpasses the overall average eCommerce rate across all categories. However, when compared to the top performers in their specific vertical, who have an 8.5% CVR, they still have much room for improvement.

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Additional Shopify Data 

For additional reference, take a look at cart abandonment rates for the top performers during the last six months (Varos, 2023.)

1. Baby & Children: 18% 
2. Beauty: 16%
3. Fashion: 18%
4. Food & Beverage: 13%
5. Healthcare: 11%
6. Home & Garden: 15%
7. Pets: 7.6%
8. Sports & Fitness: 18%
9. Wellness: 12% 

How Does the Conversion Rate Differ by Channel?

CVR also fluctuates across acquisition channels. Visitor quality and intent vary, and so conversion benchmarks fluctuate as well.

For example, visitors arriving at a site through paid ads have actively shown purchase interest by engaging with and clicking on an ad. That signals more intent than a visitor passively exposed to a social media post.

Here's a view of current eCommerce conversion rates by top marketing source (Varos, 2023.):

• Meta Ads: 4.3% 
• Google Ads: 2.8%
• TikTok Ads: 3.3% 
• Direct to website: 3.1%

Examining channel conversion helps you prioritize high-potential sources by exposing outliers. If Google Ads visitors convert at a lower rate than Meta ads, marketers can optimize campaigns or shift budgets accordingly.

How Did the Conversion Rate Change for BF / CM? Compared to Last Year?

The holiday shopping season represents the Super Bowl for ecommerce merchants. It's a chance to drive up sales dramatically through limited-time discounts and promotions. These heavy traffic days serve as an opportunity for merchants to increase sales, AOV, and revenues. 

Varos data reveals this seasonal stats boost continues rising year-over-year.  

BFCM Period 2023 (Nov 21-28)

The 2023 BFCM conversion rates averaged an impressive 6.4% (Varos, 2023). Compared to what we saw earlier, this significantly exceeds typical ecommerce site performance. Yet it also improved upon last year's BFCM period. 

For reference, the 2022 BFCM timeframe conversion landed at 5.8%. This dataset shows a positive year-over-year lift occurring. It is difficult to pinpoint a singular driver, but the gains are looking good for retailers either way.

As supplemental context around the 6.4% conversion surge, Shopify data highlights:

• The median abandoned cart rate went down to 21%, likely indicating strong buyer intent tied to promotions
• The abandon rate increased by 22% versus 2022 levels

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What Are Top Performers Doing Right?

As we've seen, the best CVR performers achieve multiples of ecommerce averages. They show us that breakaway results are possible for brands. Such steep outperformance begs questions about how exactly they secure such advantages. What are the tip-top conversion rate brands doing right?

Our data holds clues on how they turn browsers into loyal buyers. The headliners anchor everything around eCommerce conversion rates. From ads to site experience, they squeeze better results through small cumulative gains over time.

Here's what you need to know:

Meta Ads

Surprising takeaways emerge from our Meta Ads data that clash with common assumptions. For example, analysis reveals that low-conversion brands focus extensively on cost-per-click (CPC) and headline click-through rates (CTR) in campaign development. 

Compared to high-conversion groups, these advertisers achieve lower CPC and CTR expenses. These are seemingly positive signs. However, despite the appearance of greater volume and efficiency, their business conversion and return on ad spend suffer greatly.

Critical Insight: Maximizing for low CPCs does not guarantee conversion success. Clicks lacking buyer intent fail to drive ROAS regardless of nominal cost efficiency.

In contrast, high conversion brands (averaging a 5.8% site conversion rate) actually record much higher cost-per-clicks than other sets. The data shows $1.77 CPC versus $1.17 for the median and $0.69 for poor performers on conversion KPIs (Varos, 2023.) Yet, their outcomes are dominant by every meaningful financial measure. 

This finding defies surface-level intuition. It shows that risk tolerance to identify high-potential avenues pays off.

Google Ads

Google ads metrics reveal similar patterns. High-converting brands (averaging 6.9%+ CVR) optimize campaigns to unlock lower cost-per-conversion and cost-per-purchase compared to median and low performers. Thanks to funnel and messaging expertise, their ad spending efficiency improves.

Cost-per-click (CPC) comparisons also showcase an inverse dynamic similar to Meta's platform. High conversion rate brands pay over $1.14 CPC on average. That's considerably more than the $0.87 median or $0.79 baseline from poor-performing peers (Varos, 2023.) Yet despite more extensive investments, these advertisers generate better financial returns across metrics.

This pattern persists for cost-per-thousand impressions (CPM) as well. High performers disbursed $17.14, compared to $12.71 (median) and $11.39 (low conversion). Again, proving a willingness to spend fuels breakaway achievement.

TikTok

Studying TikTok ad results tells a different story compared to other platforms. Here, conversion superstars (hitting 12% rates on average) spend much less per thousand ad impressions than low-converting advertisers—$5.69 vs. $8.79, respectively (Varos, 2023.)

Additionally, all types of results see similar 0.65% click-through rates on TikTok.

What You Can Do For eCommerce Conversion Optimization

What moves the needle on conversion rate? Ask revenue record setters. Their focus on creating frictionless buying journeys offers lessons for lifting your sales performance.

Conversion rate optimization (CRO) provides the blueprint. This data-driven approach runs continual experiments to remove friction across web and social platforms. Minor tweaks compound over time, evolving digital touchpoints that pull visitors toward a sale.

For the last part of our guide, we'll explore essential CRO focus areas to help more site traffic convert to revenue. Follow the leaders until buying becomes the default next step for your visitors.

Target the right audience.

Reaching and resonating with your ideal target audience is vital for CVR optimization. If the wrong visitors come to your site, they likely won't convert at high rates, dragging down conversion metrics.

Doing thorough market research to understand your very best customers can pay off. Detailed buyer profiles help you get to know what makes those high-potential shoppers tick.

You can also get ideas from big-name brands in your product area that already have an audience. Check out tools like Varos to see who industry leaders engage with. Then, fine-tune your own targeting to reach similar segments with money to spend.

Build brand equity

Brand equity refers to the value and reputation your business has built up in the minds of customers. Strong brand equity means higher trust and loyalty from people. And that leads to better conversion when visitors feel good about making purchases from a familiar name. Unknown brands have a much harder time getting conversions since they haven't earned that trust yet.

You can build brand equity in many ways. For instance, creating high-quality content that resonates with your target audience and showcases your expertise. Another way to build brand equity is through social proof. Encourage happy customers to leave reviews and share their positive experiences on social media.

Use landing pages to run conversion experiments quickly.

Too often, brands send traffic to general website pages lacking direction. Modular landing pages remove distractions by focusing on one goal. Quickly test messaging, offers, and layouts on visitors identified for high conversion potential. 

One study by HubSpot found that landing pages with video content can increase eCommerce conversion rates by up to 86%. It might be something to consider!

Valuable tools like Instapage and Unbounce make building landing pages simple.

A/B testing website regularly

Speaking of testing, this next tip should already be a part of your strategy. Regular split tests determine what site variations connect best with audiences, whether new layouts or individual elements like optimized buttons. Use built-in or dedicated tools to contrast page treatments to lift on-site conversion over time.

Abandon cart campaigns

Even veteran stores lose carts before checkout. With 70% of online carts abandoned, targeting visitors who previously added items but left is a smart play.

Jump on those initial buying signals with retargeting email incentives and discounts to capture returned shoppers. You can convert interested visitors into sales at scale through automated campaigns.

Key Takeaways

Monitoring website conversion performance provides crucial growth signals. The average website conversion rate sits around 2.9%, depending on the vertical. Yet, top performers double that rate - demonstrating major revenue potential through CRO.

Studying differences across channels, campaigns, and verticals offers context to allocate spending better. Promotional response trends, such as BFCM, also inform strategies. 

The customer journey perpetually evolves. But brands choosing a long-term commitment to conversion rate optimization will reap the rewards.

Ready to realize your site's true conversion potential? Varos provides the proprietary data and benchmarks empowering top brands to engineer rapid growth. See for yourself and book a demo today to get started.

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

LinkedIn