The pandemic has brought about a massive shift in the retail ecosystem, with more and more brands and buyers coming online for the first time.
As an online D2C brand, you are not only engaged in competition for market-share with competitors, but also to reach your revenue goals in a certain period of time in a given budget.
Here are key reasons why a D2C brand should focus on optimising conversion rate for market-share and overall revenue objectives:
- Increase Return on Ad Spend (RoAS) and impact revenues without increasing marketing spend.
- Improve customer satisfaction by making your product easier to buy
- Positively impact gross margins for future growth initiatives
How to Define Conversion Rate?
E-commerce Conversion Rate (CVR) is defined by Google as: "The ratio of transactions to sessions, expressed as a percentage. For example, a ratio of one transaction to every ten sessions would be expressed as an Ecommerce Conversion Rate of 10%".
Conversion Rate Optimization (CRO) is the process of increasing the percentage of visitors to your website that convert into customers. It’s important to note that CRO is not about increasing traffic to your site; instead, it’s about optimising your website for users who have already found you.
How Does Your Conversion Rate Compare?
When used in conjunction with other input metrics, the CVR metric is an important proxy indicator of the health of your online store.
So how does your conversion rate compare with the rest and do you have areas of improvement? The graph below showcases the conversion of top-performing e-commerce pages.
But average conversion rates differ so much across categories and regions that comparing one store or market to another often doesn't produce any meaningful insights even though it indicates how high the ceiling can go.
An electronics website, for instance, will most likely have drastically different metrics to the toys & games category.
How to Supercharge Conversions?
Once you have benchmarked the conversion rates, it is now about how to affect it for the desired outcome.
Breaking it down with respect to the user journey, we can classify it as:
- Driving more relevant visitors to product pages
- New Customer vs Existing Customer Campaigns - Optimise
- Page Load
- Product Search & Suggestions
- Increasing add-to-cart via conversion optimised Product Page
- Avoiding cart abandonment via a friction-free checkout and payment funnel
In this entry, we’ll primarily focus on driving relevant visitors on the product page.
Driving More Relevant Visitors to Product Pages
Driving more relevant visitors to your product pages with capacity and willingness to pay is a key actionable right at the top of the funnel to help reduce bounce rates and drive up conversions.
Visitors can be your existing customers or an entirely new segment one is targeting.
Following are some of the key tactics you can deploy for targeting your existing customer base:
- Back-in-stock targeting: Notify them about a certain popular favourite coming back in stock
- Event-based targeting: Special birthday, anniversary or other event-based discounts like New Years.
- Intra-category targeting: If someone has bought 2 different products already, pitch them a 3rd one.
- Lead-score based targeting: If someone has recently engaged with your content or purchase funnel
- Content Engaged (read blog, subscribed to newsletter)
- Purchase funnel engagement (Searched for product, viewed a product, added to cart but did not complete transaction)
While driving more repeat purchases is one approach, it has to be supplemented by a healthy dose of acquiring new customers.
If you have run campaigns in the past, a useful exercise would be to look at conversion data from past campaigns across demography, location, device, channel and payment source for finding correlation between these parameters with certain products or categories in a particular season.
This exercise should give you better demand insights and thereby empower you with a clearer picture of where to sell, when, to whom and how in order to double down on the opportunity areas.
However, if you have no past campaign data or if it is not reliable enough, looking at industry insights can be a great way to understand opportunity areas.
Following are the conversion rates across sources, devices and platforms can help you decide where you can focus to start with.
That being said, every category and product has their own unique nuanced insights and benchmarking can only be of limited help in prioritising the initial go-to-market approach till an actual, large enough sample of campaign data is available for your product.