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What You Need to Know About Ecommerce & Conversion Optimization

‍If you want your ecommerce to thrive, position yourself in a niche segment and offer better conditions than Amazon. There's a big gap, credibility-wise, between your shop and the ecommerce giant.

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Could you imagine a time without ecommerce?

For some generations, it's almost impossible to picture that reality. 

After all, some of the first ecommerce stores (such as Amazon and eBay) became operational in 1995. 

Since then, ecommerce has continued to grow almost exponentially. According to a study by eMarketer, ecommerce retail growth was expected to reach $4 trillion US in 2020.

As the industry grows at a fast speed, the competition intensifies. And despite all the technological advances, ecommerce still has some hurdles to overcome.

Ecommerce Challenges

  • Physical disconnection between the consumer and the product/store
  • Security concerns about payments
  • Security concerns about personal data
  • Concerns about the quality of delivered products, as opposed to what’s shown on the page
  • Amazon: a challenge of its own, since it sells everything at great prices with affordable (usually free) shipping

How can ecommerce owners overcome the physical distance between their shop and their customers?

If customers can’t touch, smell, or taste your product, they have to rely only on what they read, see, or hear on your website.

‍Even though Amazon and eBay had a clear vision when they first started, that vision wasn't aligned with available technology.

Most consumers didn't trust the internet back then. The user interface was primitive, and access wasn't fast enough.

‍Ecommerce was a new concept, and it required a mental switch. Luckily, early adopters proved that it was worth it to buy something you couldn't touch or feel, and more people decided to buy online.

‍Consumer confidence grew, and so did ecommerce shops' revenue.

‍While brick and mortar stores need to get window shoppers to purchase products, ecommerce stores need first to convince their prospects that the shopping window was real. 

These efforts created techniques to develop trust and increase the chances of buying. The result? A well-known set of ecommerce best practices.

‍The first step? Consider Amazon as most popular ecommerce. After all, they offer free shipping everywhere in the U.S. 

‍If you want your ecommerce to thrive, position yourself in a niche segment and offer better conditions than Amazon. There's a big gap, credibility-wise, between your shop and the ecommerce giant.

The basic psychology of conversion

Let’s examine one of the most renowned theories of conversion psychology. According to a model created by Stanford professor B.J. Fogg, the primary elements of conversion are motivation, ability, and trigger. 

When combined, these three elements lead the prospect to a desired behavior or action. In terms of ecommerce, the desired behavior is purchase.

“Motivation” is the initial value that reflects the customer’s desire to solve their problem using your products. There’s very little you can do to increase it. 

‍Lowering it, on the other hand, is certainly possible, so watch out!

If your ecommerce doesn't fulfill certain requirements, your prospects' motivation can actually decrease.

Motivation can be thought of in three subcomponents:

  • pain/pleasure,
  • hope/fear, 
  • social acceptance/rejection. 

This is the point where triggers and ability come in. 

“Ability” means that a prospect is actually able to turn their motivation into action. The easier it is to act (AKA purchase!), the more likely a prospect will be to convert, and vice versa. 

Ability depends on a variety of factors, such as: 

  • money, 
  • time, 
  • effort, 
  • state of mind, 
  • social deviance (we’ll get to this), 
  • how routine a task is.

The “trigger” is the specific spark that drives a customer to action. In practice, it’s called a “call to action” (CTA). 

Triggers begin to succeed where otivation and ability meet. 

If they don't, you won't sell. Then, you'll have to reconsider where to place your trigger (call to action) and what the motivation is. 

Generate more ecommerce revenue in 2 ways

There are two basic ways to increase the revenue of a website. 

Before we begin talking about conversion rate optimization (CRO), let us just briefly examine alternatives: one is to bring in more visitors (increase traffic), and the other is to turn more visitors into prospects (increase conversion rate).

#1: Increase total traffic

Getting traffic is vital for any website on the internet, and there are multiple ways to improve it.

But remember: doing A/B testing without traffic doesn’t make sense.

Cost of traffic acquisition

The cost of traffic acquisition is usually expressed as cost per thousands of visitors delivered. Search engine optimization (SEO) can be highly variable in pricing, starting from a couple of hundred dollars and reaching into the tens of thousands. 

However, SEO is an indispensable marketing activity for low-traffic ecommerce sites.

‍Pros of traffic acquisition

With more people coming to your website, and you rank higher in search results. This enables you to grow traffic further, attracting even more visitors and more customers.

It’s a lot like the ancient motto of brick and mortar stores: “Location, location, location!” Instead of a prime physical address, your store will enjoy higher page rankings for relevant keywords.

Cons of traffic acquisition

‍Using traffic acquisition as the main engine of ecommerce growth might give you some problems. 

First, the cost of traffic acquisition tends to curve as it grows, reaching an exponential as your traffic increases. Second, the potential of traffic acquisition is limited — unfortunately,  there are only so many people you can attract to your website. ‍

Sooner or later, you will encounter one of these obstacles.

#2: Increase conversion rate

How do we soothe the growing costs of traffic acquisition? 

The dream, after all, is to grow revenue from existing visitors instead of bringing more visitors to the website.

When you improve your content, user interface, and other elements of your website and/or offer, it's more likely for visitors to buy. The chances of them leaving with a positive impression of your website improves, too, because customers can also encourage potential prospects through reviews, testimonials, or social network activity.

Conversion rate optimization (CRO) works hand-in-hand with SEO to improve your website’s relevance, clarity, quality of content, technical functionality, and more. 

Together, they can improve your website’s appeal to prospects, and the performance of your selling process.

When you clearly define your target audience and identify your best-performing customers, your marketing and SEO efforts are sharper.

What's the role of conversion optimization in ecommerce?

Conversion rate optimization, simply put, is analyzing a website in detail to increase total revenue.. 

‍Or, if you like quotes: “all activities aimed at increasing the likelihood that a visitor to the website will actually convert from prospect to customer”.

It combines customer psychology, website copy, UX, design, and functionality into a recipe that makes the visitor want to buy from your store again and again.

And like most recipes, results might vary according to the cook. Which means: What might work for one ecommerce store might not work for yours.There are no definitive answers and solutions in conversion rate optimization.

‍Best practices exist, but the rest of the process involves researching and testing ideas for improvement. This way, you can implement the winning solutions to improve revenue, and provide a smooth shopping experience for your customers.

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