In the competitive world of marketplaces, and with costs related to customer acquisition rising – instead of exploring ways to lure new buyers to your online marketplace platform, we turn our attention to providing you with tips and guidance on how to convert the traffic you already have into sales.
The conversion rate in marketplaces is arguably the most critical statistic to track as you cultivate and expand your business, but it won’t grow naturally, necessitating active conversion rate optimisation.
How to calculate your conversion rate?
The formula is straightforward. You must take the count of conversions (or completed sales) and divide it by the total number of sessions in the same time frame.
As an illustration, if you have achieved 100 conversions from 10,000 sessions, then your conversion rate stands at 1% because 100 ÷ 10,000 equals 1%.
What is a good conversion rate?
There are several factors to think about when assessing a ‘good’ conversion rate in marketplaces, with the global average typically falling between 1-3%.
Econsultancy’s Performance Benchmarks tool supports this 1-3% range, using data from an array of partners, including eCommerce analytics specialist Littledata, who provide the conversion rate figures.
1. Ensure your website is ‘safe’
This can be accomplished subtly, but it holds immense importance when your focus is on conversion rate optimisation.
Gaining the trust of potential customers is vital, as they need to feel secure providing their personal information (including banking details) on your site.
Trust can be fostered through excellent User Experience (UX), and there are several additional methods that can be employed, such as:
a) Installing an SSL certificate for secure encrypted connections, comparable to enclosing a letter within an envelope before mailing it.
b) Exhibiting the logos of credit cards, PayPal, and other payment methods as a visual sign that you utilise reliable payment channels.
c) Displaying badges from McAfee, GeoTrust, or other security services, but ensure you have an active account with them!
2. Make your products easy to find
The quicker a buyer can locate a product, the higher the chances they’ll make a purchase. Your site’s navigation should be obvious and readily accessible on all device types, from any page on your site. Integrating a product search bar can further enable customers to locate products swiftly.
3. Optimise for all device types
In today’s world, it’s self-evident that your site must be optimised across all screens and devices.
If your site exhibits poor mobile responsiveness, you will likely experience a high bounce rate, and consequently, a lower conversion rate. To assess your site’s mobile-friendliness, simply input your URL into Google’s Mobile-Friendly Test for immediate results.
4. Prioritise site speed
As page load time increases from 1 to 3 seconds, the likelihood of a user abandoning the site rises by 32%, a significant aspect when considering conversion rates. A mere 1-second delay can result in a 7% decrease in conversions, which could result in a loss exceeding £25,000 annually for marketplaces generating £1,000 daily.
5. Craft comprehensive product descriptions
Enhancing your marketplace SEO ranking and online visibility through detailed and informative product descriptions will also elevate your conversion rate.
This also ensures customers receive a precise understanding of their purchase, reducing the number of returns.
6. Incorporate high-resolution images and videos
High-quality product images are essential for online sales. Product images captivate a shopper’s attention and, since physical handling of the product isn’t possible, enable swift visual judgements, creating a favourable first impression.
Complementing your high-quality images with a beneficial video and detailed product descriptions can further entice a shopper to finalise their purchase.
7. Display product reviews
Statistics indicate that 92% of shoppers consult online reviews when contemplating a purchase. They find reassurance in knowing they’re not only dealing with a reputable company, but that the product they’re interested in accurately matches its description.
This is what’s referred to as social proof – a psychological phenomenon where people base their decisions on the collective actions of others. Reading positive reviews from other buyers instills confidence in potential purchasers that the well-reviewed product is indeed a worthy choice.
8. Outline your return or guarantee policy
Your return and guarantee policies should be clearly visible on your product pages. Studies show that over half of customers will read the return policy before purchasing, so clarity and honesty are key.
The inability to physically inspect a product before purchase is a major drawback of online shopping. By being transparent with your return and guarantee policies, you put your customers at ease and increase the likelihood of purchase completion.
9. Implement live support
Resources permitting, live chat can serve as a valuable direct communication line from your potential customers to you. It not only builds trust with your shoppers but fosters future customer loyalty.
However, it’s crucial that your live chat is not regularly ‘unavailable’ or in a ‘leave a message’ state as this could backfire and drive customers away.
10. Promote stock scarcity and limited-time offers
Scarcity of stock and limited-time offers serve as psychological nudges to convince your shoppers to act fast. When a coupon code has an expiration date or a product is almost sold out, it will encourage shoppers to complete their purchase promptly and avoid distractions.
11. Offer free shipping
Online shoppers are accustomed to services like Amazon. If your online store doesn’t provide free shipping, there’s a high chance your customers will turn elsewhere.
Free shipping can be a psychological ploy. If you believe you can’t afford to offer free shipping outright, you could subtly increase the cost of your product to cover shipping expenses.
12. Accept a range of payments
Your marketplace platform should be versatile enough to cater to a broad spectrum of shoppers. While you won’t be able to please everyone, it’s crucial to offer an array of payment options to your customers.
Consider integrating payment options like PayPal or Apple Pay. If your customers are tech-savvy, you might also contemplate adding a cryptocurrency option.
13. Allow guest checkouts
Users should have the option to checkout as guests without needing to register an account. You’ll be capturing their name and email address during the checkout process anyway, so forcing users to register just gives them another reason to exit your site.
14. Incorporate progress bars at checkout
A primary reason for shopping cart abandonment is a checkout process perceived as too long or too complex.
If your checkout process is as streamlined as possible and customers still abandon their carts, it’s likely because they perceive it as too lengthy. This perception can be addressed by setting clear expectations upfront and displaying a progress bar. This lets your customers know where they are in the process and how long it will take to complete their purchase.
15. Follow up on abandoned carts
Abandoned cart data should be closely monitored. About 35% of abandoned carts are potentially recoverable through improved checkout processes or better product descriptions.
However, abandoned carts also present an opportunity to improve your conversion rate by following up with customers via email. You could include additional discounts or rewards to incentivise the completion of the purchase.
Other metrics that can help measure success
While it’s important to focus on your average conversion rate, there are many other Key Performance Indicators (KPIs), accessible through tools like Google Analytics 4, that offer insights into your performance and areas for improvement.
Optimising the conversion rate for your online marketplace is a crucial aspect of your business growth strategy. The 15 tips we’ve shared provide a roadmap to improve your performance and increase the conversion rate.
Furthermore, measuring your success goes beyond simply focusing on the conversion rate. Other key performance indicators can also provide valuable insights into your marketplaces performance. Understanding and implementing these strategies and metrics effectively will ultimately help you navigate the competitive marketplace landscape and drive sustainable growth.