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6 Killer Strategies For Increasing E-commerce Conversion Rate

6 Killer Strategies For Increasing E-commerce Conversion Rate

Bothered by a low conversion rate at your e-commerce store? Choco Up is here to help! This article discusses 6 killer strategies that can help increase your e-commerce conversion rate. Start using these tactics today to convert more prospects into customers!
Written and published by
Brian Tsang

As digital advertising becomes the mainstay of online businesses, many merchants are now spending money to drive traffic to their e-stores.

Yet, not many people know how to turn visitors into customers.

Put bluntly, their e-commerce conversion rates suck.

If you’re one of those merchants bothered by a low conversion rate, Choco Up is here to help.

This article discusses 6 killer strategies — backed by behavioral science, social experiments and empirical data — that can help increase your e-commerce conversion rate.

Start using these tactics today to convert more prospects into customers!

Strategy #1: Provide a welcome offer for new customers

New users are 9 times more difficult to convert than repeat purchasers who’ve already shopped twice at your store, Adobe reported.

This is mainly because visitors are unfamiliar with your brand. They simply don’t trust you enough.

But the leap of faith can be overcome with just a small nudge.

In a recent survey, 80% of shoppers indicated that they feel encouraged to make a first-time purchase with a new brand if they are given a welcome offer or discount.

The finding isn’t surprising at all. It’s human nature to spend money in the wisest way possible. 

In the case of making a first-time purchase, it’s the excitement of finding a good deal that makes people forget about the fear of buying from a new store.

Who doesn’t like discounts, after all?

Example: Everlane, an American apparel retailer, offers a 10% discount on visitors’ first orders.

Source: Everlane

A similar tactic, namely providing special offers for new customers, is adopted by numerous other e-commerce stores spanning different industries, such as:

  • Beauty & cosmetics: Sephora, Strawberrynet

  • Sportswear: Lululemon, Nike, Adidas

  • Food and beverage: Red Bull, Ben & Jerry’s

Strategy #2: Leverage retargeting ads

The marketing rule of seven is a rule of thumb that marketers learn by heart.

Simply put, it means a prospective customer needs to hear or see your brand at least 7 times before they take action to purchase from you.

A form of online advertising that stems from this time-honored principle is retargeting.

As its name indicates, retargeting ads are shown to specific and targeted segments, i.e. people who have visited your website without making a purchase.

Source: Strike Social

Retargeting advertising enables you to stay connected with prospective customers who are actually interested in your products (compare it with TV commercials and billboard advertisements, both of which are indiscriminately broadcast to consumers at large).

This way, you can easily recapture the attention of website visitors who didn’t complete purchase in the first encounter with your brand, whatever the reason may be:

  • The visitor went somewhere else to compare prices

  • The visitor wanted to gather more information about your brand first

  • The visitor simply got distracted and forgot about the items in his shopping cart

Since ad viewers are more likely to remember your brand after multiple interactions, retargeting ads also have the additional benefit of building brand awareness.

Strategy #3: Identify your hero products

It’s tempting to sell as many products as possible at your online store. However, a wider selection of items doesn’t necessarily mean more customers, or revenue, for that matter.

This is because individuals often fall into a state of decision paralysis — the inability to make decisions — when they have too many choices.

Instead of buying everything they have interest in, they end up leaving without spending a dime.

Besides, having a long catalog also increases the difficulty of communicating your brand’s unique offering to consumers. If there’s nothing special about your brand, why would people buy from you?

That’s precisely why many brands all have their own hero products.

A hero product is a product that represents a brand. It speaks of your brand’s values and what you’re good at. It gives people a reason to buy and try your products.

To give an example, UGG’s iconic sheepskin boots deliver the comfort, warmth and support that it promises customers. Burberry’s trench coat is a signature item of the luxury fashion brand. And when we speak of Apple Inc., the iPhone is what immediately springs to mind.

What Farfetch, an online fashion retailer, says about Burberry's trench coats.
Source: 
Farfetch

From consumers’ point of view, hero products are the must-buy items of a brand. When presented with a hero product, they’ll have little difficulty deciding what to buy, hence reducing the chances of them leaving empty-handed.

This trick will work wonders on your e-commerce store’s conversion rate.

Pro tip: Once you’ve identified your brand’s hero products, don’t be afraid to make them the focal point of your store.

Highlight your hero products in the banner on your website homepage. Put them front and center on your product pages. Prioritize them in your marketing messages.

If you’re doubtful about prioritizing hero products, think about the famous Pareto principle (also known as the 80/20 rule), which suggests that 80% of outcomes come from 20% of efforts.

In the same vein, as much as 80% of your revenue could come from 20% of your products.

Try it out. You’ll be surprised by the results.

Strategy #4: Add recommended products

The power of product recommendations mustn’t be underestimated.

A Salesforce study found that shoppers who click on personalized product recommendations contribute towards a quarter of total orders (24%) as well as revenue (26%). 

One way that recommended products drive conversion is by providing visitors with items that are likely to match their needs. An illustration is given below.

Let’s say you like pastel colors. You want to buy a coffee mug. And you want the mug to come with a lid.

When you browse Francfranc’s online store, the first result in the mug/tumbler category shows the following:

Source: Francfranc

Apparently, this product is far from ideal. It’s only available in dark purple and pink colors, and it certainly doesn't have a lid.

Unlike shopping at a brick-and-mortar store, where customers like to ask salespersons “do you sell XXX?”, instant and personalized assistance isn’t always available at online stores.

Without a ‘recommended products’ section below the product being browsed, you’ll have to leave the product page, continue browsing the category page, look into other products, and  repeat the steps until you finally find your ideal coffee mug (if it exists).

Yet, not everyone has that patience and time. Many will leave after a few unsuccessful attempts to find their desired items, and it’s bad for e-commerce conversion.

This is why product suggestions are important. They keep people on your site while they explore alternatives to the product currently being viewed.

Related recommendations also make product browsing much easier, as visitors can view product alternatives at a glance and with one click.

For example, you can simply click on any of the related products of the purple mug to continue browsing on Francfranc’s site. There are plenty of pastel mugs (some of them with lids) to choose from:

Source: Francfranc

As the coffee mug example has shown, product recommendations increase the chance that visitors successfully find items that meet their needs.

It translates into less lost customers and better conversion on your e-commerce site.

Pro tip: The related products section isn’t only for improving e-commerce conversion. With the right type of recommendation, it can help increase the average checkout size on your site too. 

Amazon’s “frequently bought together” prompt is a case in point to illustrate this:

Source: Amazon

As seen in the photo above, the visitor’s already added a rechargeable electric shaver to his shopping cart. 

Based on the shopper’s choice of shaver, Amazon’s algorithms suggest that replacement heads be bought as well, raising the order value from just $39.99 to $56.49 if the customer accepts the recommendation.

The above is just one example of product recommendation at work.

Depending on the products you sell and customers’ shopping behavior, below are some types of product recommendations you can use at your online store:

  • Frequently bought together
  • Featured products
  • Bestsellers
  • Top rated

Strategy #5: Try charm pricing 

It’s no secret that psychology plays a major role in consumers’ decision-making process.

Charm pricing, which is the practice of ending prices with the number “9”, is an empirically proven strategy that boosts conversion.

A social experiment by Gumroad found that prices ending with “.99” generally have higher conversion rates than their integral counterparts.

In the case of $2.00 vs. $1.99, conversion even doubled from 2.39% to 5.2%:

Source: Gumroad

The rationale behind the marked increase in conversion rates is what psychologists call the left-digit effect.

It means consumers’ perception of price is disproportionately influenced by the left-most digit on the price tag. For example, $1.99 appears to be much cheaper than $2.00, when they really differ by a penny only. 

The positive bias makes consumers more likely to make a purchase at your store.

Strategy #6: Monitor and analyze competitors’ pricing

As common sense suggests — and consumer surveys confirm — pricing is the #1 factor that affects individuals’ choice of an online store.

This is especially true of price-conscious consumers, who would compare prices across stores before making a purchase.

Source: uXprice

While cut-throat price wars — which could undercut your profits today and lead to unprofitable growth in the long run — are not recommended, it certainly doesn’t harm to monitor price movements at your rivals’ stores.

Effective competitive analysis provides you with insights about the current landscape of your industry, as well as information you need to offer better deals than your competitors.

This tactic is particularly useful for marketplace businesses. Many marketplaces fail to convert consumers who use their platforms as a site for product search then leave to buy directly from brands or retailers.

Some last words

If you’ve come to this final section of the article, chances are that you’re not just a dreamer, but a doer who truly aspires to optimize your e-commerce store and grow your business.

While improving e-commerce conversion is a tactic you can employ today to give a boost to your profits, there are many other aspects of an e-commerce business that you must take care of. 

Our article on e-commerce best practices is a comprehensive guide that you may find useful.

In addition to actionable guides and tips for online businesses, Choco Up also provides funding to e-commerce companies.

As the leading revenue-based financing and growth platform in Asia, we offer funding ranging from US$10K to $10M to companies of all sizes. With our quick and flexible funding, we’ve helped hundreds of businesses fuel their growth and accomplish remarkable results.

To learn more about how Choco Up can help your business grow, check out our client success stories or claim your FREE preliminary offer now!

About Choco Up

Founded in 2018, Choco Up is the leading revenue-based financing platform in Asia Pacific, offering non-dilutive growth capital to fast-growing companies. 

Currently covering more than 10 markets and 10 sectors, Choco Up has helped hundreds of businesses capture growth while protecting equity upside.

Click here to apply for RBF funding!

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Choco up invests from $10K to $10M USD on a revenue share model. We'll simply take a fixed percentage of your sales until we have recouped the capital + flat fee.