Anyone who takes a moment to think about eCommerce knows that conversion rates are a sink or swim issue. Either some of your virtual window shoppers become customers, or your business will be toast. Luckily, there are several things you can do to boost conversion rates. These tips can also cut down on cart abandonment–that dreaded thing that happens when online shoppers put something in their cart, but never end up buying it.
Cut Down on Cart Abandonment
We’ve all done it before. Maybe we never meant to buy the items or got distracted and forgot about our virtual cart. Globally, online retailers are missing out on about $3 trillion in sales from this phenomenon. It’s not like cart abandoners are stealing from online retailers, but the practice is definitely cutting into their potential revenue. More than half of carts are abandoned (68%) and that’s a lot of lonely carts! So what can we do about cart abandonment? Many things, but the top three are: testing pricing strategies, offering discounts, and free shipping.
A/B Test Pricing Strategies
You never know what will be the most effective and profitable pricing strategy until you try. A fixed pricing strategy does not take into consideration competitor pricing or market fluctuations. This leaves retailers vulnerable to many different issues, such as being undercut by competitors and flat margins. A/B test your pricing strategy with dynamic pricing in order to find your unique sweet spot–because no two retailers are the same. A range of pricing strategies can be devised with your top competitors in mind, such as being within a certain dollar range or percentage of their prices. When retailers allow their pricing strategy to be flexible and automate the process, they maximize the potential for profit and sales.
Boosting conversion rates can be as simple as dropping prices slightly. This is especially important at certain parts of the day that are generally slow. Dropping prices slightly to increase sales, instead of having fewer sales at higher prices could be just what your store needs to increase sales. The opposite is also true. When demand is high in the evening or during the holidays, why not raise prices slightly to capture more profit? Flexible pricing simply makes sense for online retail because it’s a hyper-competitive market that is constantly changing. This allows businesses to remain competitive and profitable around the clock.
Another element that is necessary to be an effective online retailer is a good sale every once in a while. Even small discounts can help online retailers meet sales goals and manage inventory levels because they incentivize consumers to make purchases using psychological pricing. Time sensitive discounts take it a step further by encouraging impulse buys. If a shirt you’ve been eyeing is 20% off today only, you’ll be more likely to buy it, and retailers capitalize on this. That’s because 73% of shoppers are influenced by discounts and seeing a price crossed out and replaced with a cheaper one is psychologically pleasing. Discounts are also a great way to clean out inventory when a company needs to make room for new stock.
Offer Free Shipping
After you attract shoppers with your merchandise and prices, the next step is having a shipping policy that seals the deal. There is no way to downplay the effectiveness of free shipping. Did you know that 44% of shoppers abandon their carts because of high shipping costs? Online shopping is supposed to be convenient, but when shoppers are faced with shipping costs that are nearly as much as their items, a trip down the road to your local store makes more sense. But of course online businesses don’t want that. The way they can solve this issue is to offer free, or at least cheap and efficient shipping (because some products are heavy or fragile and cost a lot to ship). In fact, 66% of online shoppers say that free shipping is “very important” to them when they are deciding to buy an item. Sixty-five percent of shoppers even say they would make shopping decisions faster, if they were offered free one or two day shipping. Retailers who offer free shipping can see higher average order values, especially when they set a minimum purchase amount. The bottom line here is; an effective shipping policy sells more items more quickly.
Raising the Bar for Conversion Rates
You might be asking, “So what does all of this have to do with conversion rates, after all?” There are innumerable factors that go into an excellent conversion rate and the few mentioned here should get online retailers on the right path. Making your store more appealing to shoppers through pricing, discounts, and shipping are just three strategies that can help your store achieve success.
What other strategies have been effective for boosting your company’s conversion rates? Leave a comment below with your success story.
The author of the post is Angelica Valentine, Content Marketing Manager at Wiser . Wiser provides a complete suite of solutions to give retailers, brands, and manufacturers the edge to stay both competitive and most importantly, profitable.