Whatever your store is selling, band tees, holistic beauty products, matcha tea, or mangoes. There’s no doubt as we begin to push into the second decade of the 21st century, the e-commerce business model is here to stay. Out of 1000 global executives, 93% felt that the year 2020 saw an even faster digital transformation pace thanks to COVID-19. Perhaps due to the uptake in pace, 44% of the same respondents suggested they were making e-commerce their top priority in 2021, alongside half of them rating customer experience as their number one priority (1).
However, joining the 95% of marketers (2) who are shifting towards e-commerce doesn’t automatically translate into a good customer experience. Many businesses struggle with making their online stores a smooth journey for their customers. Any friction in the shopping and purchasing process only serves to frustrate users – ultimately leading to an industry wide cart abonnement rate of 88.05% in 2020 – That’s 9 our of 10 people adding products to their shopping cart (usually with the intent to purchase) and then not completing their order.
This is something every eCommerce merchant should be concerned about.
Using Conversion Rate Optimization To Increase Sales
Conversion Rate Optimization (CRO) is a process website owners undergo to increase the percentage of visitors who take action on a site, such as signing up for a newsletter, scheduling a booking, or making a purchase. At its heart, CRO is about being willing to learn about, test, and analyze visitor behavior. Then, go further to experiment with developing better practices and measuring the results – bringing the process full-circle.
Depending on the nature of the business, there are different types of measurable conversions, and they generally fall into two categories: micro and macro conversions. ‘Macro-conversions’ are typically either middle or bottom of the sales funnel and require significant decision-making, such as:
- Making a purchase
- Creating a subscription
- Scheduling a consultation call
- Requesting a quote
Whereas ‘micro-conversions’ are generally top of the sales funnel lead-generators, actions that don’t typically require much consideration such as:
- Signing up for a newsletter
- Creating an account
- Viewing a product page
- Clicking through a link from an email or landing page
Luckily for most, the formula for calculating conversion rate is pretty simple: you take the number of people who took action and divide that by the number of people who visited the target page. For example, let’s say you launched a new product and featured it on your home page. The product got 5,000 visitors adding it to their cart, and 800 people decided to complete the purchase.
So your formula is: 800/5000 = 0.16 (16%) – Giving you a conversion rate of 16%
How important is CRO?
According to Rand Fishkin (4) (founder of Moz, which made $42.6 million in 2016 (5):
“CRO is the most important marketing activity because it makes every visitor exponentially more valuable.”
And further added:
“Your conversion rate informs your company strategy, your product development, and your value proposition.”
In essence, to scale your business, CRO is essential if you want growth to be sustainable. Inevitably, an excellent CRO process leads to (6):
- Higher profitability thanks to converting more leads.
- Happier customers because you can reduce friction around the buying process.
- Better traffic results since pages optimized for conversions are more likely to keep visitors engaged.
- An edge over the competition who isn’t putting enough (or any) effort into their CRO processes.
The importance of CRO can’t be understated enough, so we’ve put together this paper to help you understand and improve your conversion rates and bottom line. We’ll walk you through the academic theory behind how people shop online and why – then we’ll unpack some industry statistics. After the industry research, we’ll show you what the experts have to say about best practices in optimizing your store and checkout experience. Lastly, we’ll show you how to implement what you’ve learned.
CRO Best Practices According to Research in Online Consumer Behavior
Many e-commerce businesses hold a habit of throwing cheap tactics at the wall and, like spaghetti, hope they stick. However, using this on-the-go strategy can cost you time, money, and effort. Businesses who succeed base their conversion rate optimization programs on tested hypotheses, but where do you get the ideas? Besides intuition, one place to look is in the academic literature on the subject.
Marketing research is continually evolving, and new findings can help confirm your intuitions and move onto testing phases or provide ideas for moving forward. So, here we’ll take a look at what the academics have to say about how and why people shop online and what they define as CRO best practices.
Consumer Behavioral Psychology in Online Shopping
E-commerce as a topic has been capturing the public interest and trending upwards on Google, particularly over the last five years:
So it’s no surprise that academic researchers decided to wade in and test various aspects of online retailers or e-commerce shopping against general theories in consumer behavior psychology. Research has tested one of the prevailing questions and answered in multiple contexts: Which behaviors define purchase intentions and what factors on your website are positively influencing them?
Back in 2003, the early period of e-commerce, researchers found (7) that some of the most significant influencers of purchase behavior were:
- Information quality
- User interface quality
- Security perceptions
If we fast forward to 2016, these factors were still important, though personal data privacy and security concerns and lack of trust had become even more significant. Customers in the USA suggested that they were concerned about the abuse of their credit cards and other personal information when shopping online (8).
We also see that mobile optimization became a significant factor in online purchase behavior since most internet users in this research used their smartphones to access the internet (8). And more recently, researchers found that online shopping convenience had a definite positive impact on customer satisfaction, electronic word-of-mouth (e-WOM), and customer loyalty (9).
In another study, researchers found that while generation Y online shoppers use the internet more than previous generations, generation X is still a more desirable market thanks to higher disposable income and free time (10).
Of course, what are the impacts of COVID-19 on this research? While there is currently a lack of peer-reviewed research, most available research suggests that businesses more widely adopted e-commerce in 2020 (11). Some researchers also suggest that while old habits of shopping in-store are likely to return, some practices related to in-store shopping will die because consumers have “discovered an alternative that is more convenient, affordable, and accessible.” (12)
What Industry Experts Have to Say about CRO Best Practices
When we look at the academic literature surrounding CRO, it mainly deals with optimizing the whole eCommerce site, such as optimizing copy or including videos, customer reviews, certification, and implementing a recommendation system. We can find the elements that make up great CRO, specifically for the checkout pages, if we look a little deeper.
Generally speaking, we can divide the success factors into two subcategories (13):
Let’s first take a look at the quality elements of great CRO. The leading influencer of conversions in the literature appears to be simplicity, in that the fewer distractions on the checkout page, the better (14). For example, removing unnecessary headers and footers of the checkout page helps narrow down the options consumers have to click away from the checkout, thus reducing the cart abandonment rate14.
Another quality element that influences CRO is a little more technical; page loading speed (13). Having a fast page loading speed helps consumers perceive the page as easy to use (15) and helps determine their overall satisfaction using the site. In other words, if you have slow pages, these add friction to the buying experience and then increases the likelihood of abandoned carts.
While you can use the promotional element across the eCommerce site, in the form of banners, buttons, and badges, you can also apply them to the checkout pages without overcomplicating the page (and ruining the quality element of great CRO). For example, the use of discount codes or coupons and free shipping. Both of these promotional tools working together help to boost conversion rates (13). Sometimes, depending on the level of luxury of the product, having free shipping on its own can have a negative impact (13,16) where the customer thinks the cost of shipping is incorporated into the overall price and devalues the product.
The critical aspect here is to ensure you don’t use promotional tools to distract the customer from the buying process. As we established earlier in theory, too many text fields reduce the user interface quality. So promotional tools should be applied with care, as simply as possible, to minimize extra friction.
Finally, as a way of wrapping the two subcategories, another academic recommendation for great CRO practices (which is now common in practice) is to regularly use A/B testing and investigating drop-off points – with the possibility of narrowing down customer segments with the use of lead campaigns in the checkout pages themselves (17).
eCommerce Industry Data
Now we’ve covered some of the most relevant academic research, which tells us about what should and shouldn’t work – in theory. Here, we’re going to dive into industry research – what private companies who specialize in the marketing space have to say about CRO. Naturally, most of the research is statistical, but we can also look at some case studies.
eCommerce Industry Statistics
For the sake of staying relevant, we’re only going to focus on reports that have been published since 2017, as anything earlier is quite likely to be outdated (we all know the tech industry moves pretty fast these days).
One of the standout reports for CRO, in general, comes from the Conversion Rate Benchmark Report 2020 by Unbounce. Besides being great to look at, they gathered huge amounts of data from 34,000 of their customer landing pages with over 186 million visits and over 19 million conversions. They published a specific section on eCommerce, which gave this valuable insight:
The eCommerce industry’s overall median conversion rate is 3.5%, while the best performers managed to eke out a 25.8% conversion rate. But of course, the conversion rate varies a bit in different industries.
Another insight relevant to the shopping cart experience is what we covered earlier – the simpler, the better. Unbounce found that pages with fewer words and were easier to read (think middle-school level) and using positive (joy and anticipation) words, converted at a much higher rate than pages with more words and negative feelings.
Of course, as the research suggested earlier, more customers are using their mobile phones than ever before. The 2017 report on Mobile’s Hierarchy of Needs by Comscore, which examined global mobile use, suggests a 49% gap between minutes and dollar spend on mobile than desktop. So what’s stopping the conversions on mobile devices? According to Comscore’s responses, it’s made up of the following:
- 20.2% security concerns
- 19.6% can’t see the product details
- 19.3% found it difficult to navigate
- 19.6% couldn’t browse multiple screens or compare
- 18.6% found it too difficult to input personal details
These statistics also back up the theoretical research we looked at earlier in terms of information and user interface quality, as security perceptions.
Lastly, we can take a look at Invesp’s 2020 analysis of 200 eCommerce websites to find an interesting statistic that counters some of the points we’ve raised earlier:
They found that 88% of cart pages had the top navigation bar inside the page.
Given that the analysis is only top-level, we can’t determine how good or bad their conversion rates are. But given that so far, the research and data suggests fewer distractions, the better, we can confidently say that by being in the 12% of sites that remove distractions, you’re likely to have better conversion rates.
With those industry statistics in mind, we can turn to the juicy stuff – real world, specific CRO examples.
Conversion Rate Optimization A/B Tests in eCommerce
Here, we will present a few case studies of A/B testing on eCommerce carts and checkout pages done by external companies to illustrate the academic theory and industry insights. First off, is VeggieTales tested by Optimizely, with their example of less is more.
VeggieTales kept their website headers, footers, sign up, and account banners in the checkout page’s original control version. In the variation, they removed all of these elements (except ones that served as confidence boosters, like the free shipping offer label and legal pages links). These changes resulted in a 14.3% increase in Revenue Per Visitor.
Another case study centered around removing distractions, VMO tested nameOn. In their analysis, they identified nine separate Call-to-Actions (CTA’s) on the checkout page. In the variation, they decided to narrow the CTA’s down to two, “Welcome bonus” and “Continue to Checkout.” These changes resulted in fewer people clicking away from the page and an 11.40% increase in conversions.
Another interesting case study by VWO was optimizing GRENE’s mini cart feature. In the original version, customers assumed the free shipping label was a clickable button, and they also couldn’t see the sum totals of each product if they bought more than one of each. So VWO added the primary CTA at the top of the cart and added single product line totals and the ability to remove products from the mini cart.
These adjustments resulted in a change in visits to the cart page from 2.91% to 3.05%. Plus, an almost 2X increase in quantities of items purchased. These changes show the importance of optimizing for customer experience (going back to user interface quality).
Finally, Optimizely took a look at the checkout flow of Insound, who’d already launched a new design, but after a short while, realized that conversions on the latest design were underperforming. One of the issues they found was repeatedly using a “continue” button through the checkout funnel was causing confusion and losing potential customers to shopping cart abandonment. So they changed the wording on the button to be more specific about the progress in the checkout, from “continue” to “review order” which resulted in an 8% increase in conversions. These changes and results back up the academic research on the significance of information quality.
As with most life processes, it’s often people’s experience (combined with background knowledge) that counts towards a better outcome, rather than just sitting and hoping for good results. So when you find your business needs a little CRO TLC, your next best option is to get professional advice or opinions.
CRO is a relatively new field online businesses are paying attention to. Despite that, there are many people out there with years of experience in growing companies using it. We asked some of them what they thought were some of the best and worst CRO practices for checkout/cart page optimization.
Expert CRO’s Share Their tips with Perfect Checkout
Hear directly from the professionals who implement CRO best practices for hundreds of stores around the world. The following experts were kind enough to share their insights with Perfect Checkout’s team in these thought provoking interviews.
Nelson Jordan is a former CRO Manager and current content strategist for SaaS and eCommerce companies. He’s helped more than 80 brands grow in his work, including bootstrapped, VC-backed startups, SME’s, and global companies.
This is what he had to say:
“The main things I look for on the checkout pages specifically are ways to reduce friction. My main tactic is stripping out all elements that aren’t 100% essential. Many eCommerce sites clutter up the checkout by adding additional buttons and text, but I’ve found that on average, the fewer elements, the better when it comes to conversion.
On the cart pages, I’ve found that it often makes sense to break up the required information into multiple sections or pages. For example, don’t ask your users for their personal information, card details, and shipping details on a one-long form. Instead, use separate pages and allow users to click ‘next’ when they’re finished with a particular section. This has the added benefit of easily being able to see where users are dropping out, as your analytics provider will show this information as standard.”
A good example of what Nelson is referring to when he talks about ‘one long page’ looks like this:
Filling out all of these fields adds a ton of friction to the buying process and gives plenty of time for customers to rethink their purchases.
Dave Powell has been the eCommerce Conversion Manager at TomTom for over five years and was a UX designer before his current role. Needless to say, he knows a thing or two about creating a great customer journey.
He gave his top 5 recommendations for checkout CRO:
- “Keep a balance in pain-of-paying VS pleasure of product (bigger images, product USP’s)
- Neuromarketing testing (EEG) on form fields can uncover subconscious sticking points (incorrect auto-completes etc.)
- Adding a small hurdle to the voucher field deceases ‘voucher-hunting’ behavior
- Abandon shopping cart emails really do work – test multiple variations
- Remove any unnecessary links away from the checkout funnel (i.e. site navigation)”
When most people think of CRO testing, they figure it’s about doing A/B tests on live webpages to see which idea performs the best. However, as Dave has highlighted above, it’s also well worth the effort to do traditional offline testing in the form of EEG. These tests help accurately measure the brain’s engagement and motivations by showing which parts of the brain are getting fired up when going through the sales funnel.
Elise Dopson is the co-founder of Peak Freelance, which (has an eCommerce functionality) and has written a load of research in the eCom space.
Here’s what she had to say:
“eCommerce retailers need to make it as easy as possible for customers to checkout; 21% of people abandon their online carts because of a long and complex checkout process. Offering one-click checkout, or using plugins, overcomes that obstacle.
Reducing friction means less time to questioning whether it’s worth it. One-click checkout speeds up the entire checkout process (and gives shoppers less time to overthink their purchase.)”
One well-known example of what Elise is referring to here is Amazon’s one-click buy checkout, which of course, requires the user to have an account with saved card details already.
Elise Maile is a Senior UX and Conversion Rate Optimisation Freelance Consultant who was shortlisted for three separate Conversion Elite Awards in 2020, has over seven years experience in UX, personalization, and experimentation, and a further nine years developing and designing websites.
Here’s what she had to say:
“It’s a good idea to be inspired by other industries. For example, the travel industry upsells products in the cart (seat selection, extra baggage, food, etc). However, every new idea should be A/B tested. You still need that user to complete their purchase, and too many distractions can be detrimental, so avoid pop-ups and too many extra steps. What works for other industries, or even direct competitors, may not work for your customers, but you’ll only know if you run a test.
A good shopping cart design will ensure the key information is visible: the selected products, the cost, a clear CTA to progress to checkout, and, if available at that stage, the shipping options since shipping is a sticking point for many users. Then, you can look at optimizing the cart for the business. Got a minimum spend for free delivery? The cart is the best place to calculate the required additional spend and recommend a product close to that cost, increasing the overall order value.”
Elise’s thoughts make for an excellent summary of what we’ve talked about so far; keep it simple, test, and stay curious.
How Perfect Checkout Increases Your Conversion Rate
To analyze how the Perfect Checkout platform increases conversions, we can look at each point of the recommendations we’ve gathered from the research and weigh them up against Perfect Checkout’s functionality. Here’s what the Perfect Checkout page looks like on desktop:
Let’s start with the most common theme in the recommendations, simplicity.
Keeping the look and functions simply on the surface was one of the most common themes across the research for a good reason; the fewer distractions, the better. With Perfect Checkout, you get all of the essential information on a single page design in much less space. The streamlined design choice to place the address on a single row (suggested addresses pop up as soon as you start typing) reduces the perception of ‘ots’s to fill in, and increases conversion rate, thanks to the speed at which a customer can checkout.
The CTA is also prominent, clear as to what it asks the customer to do and what happens when the customer clicks. Being a one-page checkout gives the customer the benefit of reviewing and purchasing at the same time.
Perfect Checkout also remembers the customer’s personal information for the next time they shop at the same store or any other store which uses Perfect Checkout. This function helps resemble one-click checkout when a customer uses Perfect Checkout across various stores. They then only need to review the purchase and place the order.
Moving onto the other crucial element of great CRO, information quality. In Perfect Checkout, when a customer inputs the first few characters on their address in the corresponding field, a drop-down appears below the field with their billing address (and shipping address if necessary) suggestions provided by Google Maps API. Using an address verification system like this ensures fewer customers make mistakes than typing their addresses out manually, improving user experience, and speeding up the process.
The other critical contribution to information quality is the dynamic cart above the checkout CTA. As we saw in the case study with GRENE, customers want to see subtotals of individual products, and in doing so, they increased their eCommerce conversion rate by 8%. In Perfect Checkout, these totals are not only clearly displayed (with shipping costs below too), but customers can also add and take away items from the cart on the checkout page.
The perception of security is ultimately a make-or-break element of eCommerce checkouts, especially with payment options if PayPal or card details are required. Though it’s not good enough to be secure, the customer wants the reassurance too, so they need visual cues to let them know. SSL is also included with Perfect Checkout, and payment security is provided by Norton, with the badge and lock icon clearly visible near the card details field.
These security features of Perfect Checkout are also visible on mobile, where Perfect Checkout optimizes for the screen size, which helps to alleviate the 20.2% of customers worried about security when shopping through mobile.
The ‘Cherry-on-Top’ Feature 🍒
Perfect Checkout is a SaaS product that doesn’t get installed in your website code like other plugins from WordPress or WooCommerce. Instead, when enabled (through a quick, simple, privacy-focused process), Perfect Checkout “takes over” any existing default eCommerce checkout page.
This way, not only do you no longer have to worry about tweaking plugin code, but you also don’t have to worry about manually updating the software since it’s done for you. Having the checkout hosted by Perfect Checkout also helps keep your page loading speed down and user experience up since it won’t have to load multiple cart/checkout plugins you might have installed.
Measuring the Success of Your CRO
Whether you decide to use Perfect Checkout or multiple other plugins to help boost your conversion rates, you’ll still need a way to measure the impact of these changes. Knowing what sort of KPI’s you want to measure, which typically depends on your business type, is critical. Most of the time, you can use Google Analytics to help you measure your site and store performance, but you can also measure CRO with another analytic provider you might be using.
If we go back to the idea of macro and micro-conversions, you’ll be able to see what type of test to do and what KPIs to look out for. Of course, in the case of eCommerce, the main macro business KPI is product sales.
Though, knowing this metric alone isn’t enough. You’ll also need testKPI’ss for the following to get a better sense of the overall CRO:
- Cart Abandonment Rate (how many people are not buying).
- Click-Through Rate (how many people are getting to the store, checkout page, adding to cart).
- Customer Acquisition Cost (how much it costs to get the customer’s money and attention, which can eat away your profit margin).
However, you can also look at more micro-conversions to help test more specific elements of your site. These can include account registrations and email newsletter signups (if you want to give customers email incentives to purchase more or provide informational articles about you and your industry). You can even test for clicking on a specific product (if you have a deal on, for example).
The key theme here is to always test. Measure how your eCommerce site is performing, and stay curious to find out ways you can improve it. When you have a few ideas (maybe the case studies section gave you some), measure the results against your test and business KPIs, and don’t stop measuring when the test is over. That way, you’ll know when your CRO efforts may be affected by unknown threats, such as a change in competitor behavior or offerings.
In summary, we’ve uncovered the top-level theoretical information from academic research, which helped us gather insight into customer behavior and psychology. We then filtered down and looked at the industry-specific data that showed us what has been trending in eCommerce CRO. We then brought this information down to Earth using some expert opinions with practical examples.
Using all of that research, we were able to put forward some recommendations on best practices for CRO in your eCommerce business and tools to help you reach those recommendations. We can summarize the essential lessons as making sure your eCommerce store is simple, straightforward, and secure. When you’re considering making changes, always test before, during, and after the changes.
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