Despite the ever-growing dominance of e-commerce as part of the overall retail sales mix, conversion rates across online channels remain a long way behind their ailing in-store counterparts – and that has to change.
Reports for Q3 of 2018 show the e-commerce conversion rate for UK retailers standing at around 4%, while the same figure for the in-store channel stands at around 22.5%. While this gulf in conversions between online and in-store has always existed, it is now that this gap was narrowed. This is according to retail technology expert Conversity.
Conversion rates vary across different bricks-and-mortar stores, rising to as high as 50% in department stores, but dropping below the 22.5% average in areas such as clothing. Despite these fluctuations, in-store statistics are consistently well ahead of online: even e-commerce behemoth Amazon is unable to boast a conversion rate that can compete with physical stores.
Laura Arthurton, CEO at Conversity, which carried out the study, explains: “Online shopping is inherently more fickle, as it’s much easier to flit around and across websites than it is to do the same on the high street. It’s also more difficult for sales advisors to jump in and offer assistance on a one-to-one basis in the e-commerce world.”
She continues: “But this gap in conversion rates shows that the experiential aspect of in-store shopping delivers huge benefits, even as bricks-and-mortar establishments continue to struggle in terms of overall sales share. For e-commerce businesses to reduce the disparity, they need to find ways to replicate the personalised service that is a key characteristic of the in-store experience. Given online’s dominance, increasing conversion rates will yield some hugely positive results.”
When split by the device being used, statistics on online conversion rates reveal a lot about the diversity of e-commerce and the differences between channels. Rates are highest on desktop (3.9%) and tablets (3.8%) and are lower on smartphones (1.8%).
For Arthurton, this is indicative of a need to build a consistent experience across all e-commerce sales channels, and to think about the elements of high street shopping that are so important to closing sales, and how these can be applied to the online world.
She adds: “When you think about what makes bricks-and-mortar stores successful, you think personalised experiences, relevant recommendations for products to buy, savvy shop fronts and store layouts, wide visual appeal and so forth. The next step for e-commerce is to build these elements into the online environment wherever possible.
“This is where guided selling and personalisation technology can come to the fore. Shopping online will always be a different experience to shopping in-store, but enhancing an e-commerce platform by adding a new layer of personalisation to the customer experience will be hugely influential in driving those all-important conversion rates up, as well as increasing upsell and cross-sell opportunities.”
Arthurton concluded: “Improving personalisation is about making sure that customers receive relevant, real-time recommendations for products and services when shopping online, in a way that doesn’t overload them with choice and makes shopping a pleasure. Such a system should be underpinned by a comprehensive understanding of the reams of customer and company data that retailers have at their disposal. If businesses can make sense of this data and use it to their advantage, the chances of turning more prospects into customers will increase significantly.”