For more than five decades, we’ve been calling the era we live in the Information Age. That moniker has seemed increasingly appropriate as the internet has taken over every aspect of life since the 90s. We all recognize the value of increased technology and access to data and reference material. We can hardly overstate the opportunities for eCommerce startups.
However, one of the downsides of modern living is also manifested through information — information overload. This has negative ramifications for humans and eCommerce companies alike.
According to market research firm Yankelovich, an urban resident in 2007 was exposed to some 5,000 ads each day, and that number has likely grown in the last 15 years. From the consumer’s perspective, this is a negative. Information overload can affect overall wellbeing, including decision-making ability and productivity.
From the perspective of an eCommerce brand, the digital era is a double-edged sword. On one hand, never before in human history have companies had access to a potential customer base approaching the size of what eCommerce startups can tap into. On the other hand, because of the information overload, actually capturing their attention and converting potential customers who come across a brand has never been so challenging.
The biggest problem is your bounce rate.
The conversion rate on an average eCommerce site is approximately 3%, although the number varies by sector.
In other words, 97% of visitors leave a website without making a purchase.
For many eCommerce startups, this is not just a case of lost opportunity. It’s an actual loss of well-spent ad dollars. The vast majority of visitors on most eCommerce sites — especially startups — come from online ads. When brands can’t convert this traffic, it hurts their return on ad spend (ROAS), a critical marketing metric.
For observers beyond the eCommerce space, this sounds depressing. But within the eCommerce world, it’s just reality. And, in a way, this reality is also somewhat invigorating, because the bar for improvement is relatively low.
With conversion rates in the 3% range, even boosting conversion by 0.5-1% of site visitors can make a massive impact. And as the eCommerce space has exploded in the last few years, the tech industry has introduced a variety of tools — both on and off the website. These innovations can help industrious startups rise above their competitors and drive results for their businesses.
Perhaps the most important method to improve conversion rates is simplifying the buying process. We do this by removing as much friction as possible from all touchpoints in the buyer’s journey.
Simplify your web design.
First, a significant component of removing friction means having a straightforward web design and user experience. In fact, close to 40% of site visitors leave sites that are unattractive or have slow loading times.
However, function is at least as important as form. The fewer clicks to get to the checkout stage, the better, and requiring sign-in before checkout is, in most cases, creating a needless step.
It’s also shocking to see how many sites crash each year on popular shopping days such as Cyber Monday. Server capacity to handle incoming traffic is a prerequisite for any growing eCommerce company.
Install the latest payment and currency converter apps.
Beyond site functionality, there is a wide range of other site features that can be added to make the buyer’s journey smoother. Most of them can be plugged in with easy-to-install apps.
These include accepting multiple payment methods, including buy-now-pay-later, one-click checkout, and auto-currency converters that adjust prices to the local currency if you’re targeting global shoppers.
Add trust signals to show that you are legit.
Some shoppers will fall in love with a product right away and want to purchase it. However, most are wary about buying from a company they have never heard of.
Retailers must establish trust with their online customers by clearly displaying a customer service phone number, a money-back guarantee, user-generated product reviews, or an SSL certificate.
Solidify your multi-channel selling strategy.
It’s critical for eCommerce startups to have a robust and integrated multi-channel selling strategy with optimized apps and mobile websites that complement the core desktop site.
Moreover, our recent survey clearly shows that more shoppers prefer using a mobile website than an app.
Bearing this in mind, cart abandonment is higher on mobile. Removing the various obstacles between the shopper and the purchase is even more essential.
For example, sending a text message to shoppers with a direct link to their abandoned shopping cart reengages them and brings them back into the journey so they can seamlessly continue shopping from their phone.
Add a countdown clock for limited-time offers.
Even with a site that’s optimized to ensure a smooth experience, there is always a benefit in creating a sense of urgency with limited-time offers.
With the seconds ticking away on a 10-minute timer offering a promotion, buyers will get FOMO and be less likely to turn away. Furthermore, nearly 7 in 10 customers abandon their shopping carts. Impressing shoppers that a deal is about to expire can have a significant impact on their decision to buy.
Incorporate AI to make your site smarter.
Sometimes creating urgency means utilizing AI technology to make an eCommerce site work smarter.
For example, while some promotions — e.g. sitewide discounts — will always increase conversion rates, they will also eat away at margins.
To strike the perfect balance, many eCommerce sites are instead turning to sophisticated, targeted promotions that determine the shopping patterns of the individual consumer. These are based on AI technology that looks at browsing patterns, devices and environments, and other factors.
With a better handle on customer intent, the software can determine which shoppers should be offered specific types of promotions and at what level discount (if any). For example, if a specific customer has looked at a product several times, they might not need a significant discount.
Because of this compelling use case and many others, online sellers have been projected to spend more than $7 billion on AI this year to help scale their businesses with smarter promotions, better customer targeting, and other AI tools.
Use email signups to drive conversions.
Some people consider email passe, but there’s no use sneezing at the 42:1 ROI eCommerce brands generate on their email marketing spend.
The best eCommerce startups maximize email sign-ups at multiple junctures.
On an initial site visit, visitors who sign up for newsletters can get a 10% or 15% discount. The discount makes them more likely to purchase on the initial visit. Their contact information fortifies them as a continued potential customer for years to come.
Take advantage of marketing by SMS.
Some eCommerce startups also try to re-engage customers via text message.
This particular marketing channel boasts an unrivaled 98% open rate and delivers tangible results. It’s increasingly popular for growth-oriented brands.
Hire a celebrity spokesperson or Instagram influencer.
Sometimes glitz does work! Engaging the services of a celebrity or niche influencer can pay dividends.
According to our recent survey of 200 leading eCommerce executives, influencer marketing is the number one promotional channel they plan on using in 2022. And it’s not hard to see why. Consumers see influencers as unbiased third parties. Their endorsement gives immediate credibility to the brand.
Customers who follow through on an influencer’s suggestion are going in with a strong positive association. As a result, they are more likely to purchase the product.
Target the right customers with social media ads.
Ultimately, part of the way to optimize conversion rate is to make sure that the traffic coming to your eCommerce site consists of the right customers, i.e. ones who are likely to buy.
Every social media site and search engine has paid advertising tools that enable you to target various customer profiles. With its massive user base and powerful targeting tools, Facebook has historically been the most effective at zooming in on the best target customers. Many marketers widely consider it the most important social media site for businesses.
Also important is the ability to upload customer audiences to Facebook, which allows you to nurture existing leads by retargeting them with social media ads.
Utilize a data-driven approach to spot leaks in your funnel.
Finally, remember that the job is never done. Just because products are selling doesn’t mean your sales process is fully optimized.
It’s important to constantly dive into the analytics to see where you can improve.
Have shoppers begun abandoning their cart more recently? Is there a drop-off at another stage of the sales funnel? Reviewing the metrics regularly will yield insights that will help you identify issues in your funnel and ultimately boost conversion rates.
Don’t go overboard.
Conversion rate is one of the most important metrics for any eCommerce startup. However, sole devotion to bumping up those numbers can lead to a range of problems. These can include inflated promotions that hurt the company’s bottom line.
However, by working strategically to utilize the most appropriate technology tools, eCommerce startups can have a significant impact on both conversion rates. They can positively impact the overall upward trajectory of all of their important business metrics.