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What factors influence the conversion rate of an online business?

06/10/2021
Boou ye

Did you know that electronic commerce already accounts for almost 4% of GDP in Spain?

According to the latest figures published by the CNMC (National Markets and Competition Commission), "electronic commerce in Spain touched 12.500 million euros in the third quarter of 2019, 23,5% more than the previous year."

The figures are very promising. Quarter after quarter this data continues to grow at double digits, which is why many people continue to consider the channel online as a way to start new businesses or expand current ones. And even more so in the current situation.

The difficulty of attracting customers

But to get to close a sale online, there is a long way to go.

Customer acquisition is not an easy task. There are two main channels to do it: organic traffic (SEO) or paid (SEM), but this is only the beginning of a long way. A funnel that will be very different depending on your sector, product and type of customer.

Quantifying the volume of business that you can capture in your market is not complex, since both the CNMC and the INE have a large amount of information and statistics to be able to build your business model.

So what makes one eCommerce successful and another not? Do not be left with doubts, below you have all the information.

The conversion ratio, that great unknown

Omitting the product variable, and assuming a uniform catalog, the conversion ratio remains the great unknown of businesses onlineas well as a critical success or survival factor for many digital businesses.

Therefore, it is important to note that only half a percentage point of variation in this ratio can make your business online whether or not profitable.

A few weeks ago, Flat 101 published its fourth edition of the Study on conversion in Spanish digital businesses.

The report is based on more than 600 businesses online analyzed, which are distributed in thirteen sectors of activity. Among them we can find more traditional sectors such as travel, fashion, food or even booming niches, such as pets.

If you want to analyze the report in detail, it is available on its website, but if you prefer to save the ninety pages it has, in this post we summarize the most relevant.

Web traffic: mobile is still king

Web traffic continues to grow, as does business online. However, there is a clear winner With regard to electronic commerce, very much in line with other habits already identified on the Internet: mobile traffic.

The dispersion of the statistical values ​​shown in the report is very high. The websites analyzed ranged from some with just over 1.000 visits per year to others with 200 million visits per year.

However, the correlation between traffic distribution by device and sector throws quite curious data:

  • In sectors such as education, mobile and desktop traffic are on par.
  • HR tablets they continue to have their niche in sectors such as electronics and travel, with almost 10% of the traffic in these verticals.
  • Regarding mobile traffic, there are sectors where traffic from these devices is differential, such as insurance (78%), pets (73%), fashion (68%) and health and beauty (67%).

As to traffic acquisition channel, here there is no doubt either, the SEO o organic traffic continues to be the main source of recruitment.

The unknowns of the conversion ratio

The study is especially revealing when it comes to business conversion ratios online.

In fact, this is usually the biggest headache for managers of this type of business. They have great unknowns to unravel, such as: will I be in line with the market? Will the competition do better than me? Do I grow above or below the trend? What can I do to improve it?

The lower the mobility, the higher the conversion

The trend shown for the device conversion It is the opposite of attracting traffic.

Here the saying "size matters" does apply, at least in what refers to the inches of the screens of the device from which we make the purchase.

The conversion shows the other side of the coin for computers and tablets. With an average conversion for computers of 2,26%, the tablets they reach 1,19%, while mobile phones only reach 1,19%.

Although the study does not clarify it, in my opinion there is room for further study of user behavior, and some unanswered questions.

For example, do users who start a purchase process on mobile end it on their desktop? Does the device affect or is it the environment? I imagine that it is not the same to buy comfortably from the sofa at home than in a bus full of people.

Long live the email marketing

As for the uptake channels, here the matter is much more contested between the different sources: SEO, ads such as Google Ads, referrals or affiliates, email ...

Being the most homogeneous distribution, the clear winners, in terms of the conversion ratios for the channels, are the traffic of affiliates or referrals (3,08%) and email (2,03%).

It seems that the email marketing It is not as dead as many have announced for years. The study also warns of some small anomaly in relation to referrals, and this metric may be altered by some configuration failure of the analytics systems of the eCommerce analyzed.

Retaining a customer is seven times easier than gaining a new one

The study also collects that the conversion rate of recurring users is much better than that of new users, which explains a lot the previous metric of referrals and the emails.

With these data, it will surely be much easier to determine the customer's temperature, depending on the source of traffic from which it comes, and it will not serve to take them to one place in our sales funnel or another.

This analysis can be of great help when considering different actions or strategies to improve the conversion rate for each of the traffic sources.

The conversion also knows of days of the week

We have already seen that what and how affect, but when is also a differential factor as far as conversion is concerned.

The day of the week influences the level of conversion and especially if we derive it by sectors.

I was surprised to see that Wednesday is the day with the best conversion of all. While the weekend is the worst time when it comes to conversion.

Just as in content marketing, coffee does not apply to everyone, when it comes to conversion, exactly the same thing happens. Depending on the sector, there are times of the week more prone to conversion than others.

For example, in the food sector the strong days are from Sunday to Thursday. Insurance suits the end of the work week better. For jewelry and accessories, there are two particularly good days: Monday and Thursday.

Three levers to improve conversion

If I were to stick with some learning from the Flat 101 study, I would say that conversion is not a parameter that can be analyzed in isolation.

As we have already seen, there are many variables that affect, and they are also strongly interrelated, so fixing one can have negative impacts on others.

What we can do is apply a content marketing specific to attract traffic in SEO, identify and prepare the content based on the customer temperatureand launch campaigns of marketing to reinforce the peak or valley moments of our sector.

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