E-commerce Link: Taming Web Analytics
For example, Forrester research indicates that the average conversion rate—that is the ratio of orders to overall site visits—is 2.9 percent. While your mileage may vary, you still don’t know anything about what journey the visitor needs to take to convert to a buyer. There is so much that can happen between arriving on a site and checkout: visitors may browse, sign up for a newsletter or send a product to a friend. Each action reveals something about conversion. Merchants that study conversion rates in isolation, without understanding the path to conversion, have binary data—buy or no buy—but no idea as to why or when. As Forrester explains it, “[Conversion rate] is seriously flawed in that it does not lead directly to any kind of tangible improvement in a Web site’s customer experience. It’s too ambiguous and too binary—it’s either ‘up’ or ‘down’—to be directly relevant.”
Similarly, the abandonment rate is informative but not necessarily insightful. The abandonment rate measures the number of shoppers who put items in a shopping cart but fail to complete the transaction. The abandonment rate measures a certain aspect of site performance, but focusing on abandonment rate alone is misleading. You also need to look at visitor-to-cart metrics to determine the browseability of your site. Abandonment only measures activity once the visitor actually puts something in her cart.
If the metric for the conversion rate is too broad to produce actionable results, the abandonment rate is too narrow to describe the customer experience. Visitors abandon carts for all kinds of reasons. The path to checkout is fraught with pitfalls that are unique to the purchasing process. For example, the biggest reason for cart abandonment, according to Forrester, is higher-than-expected shipping costs. Also, Consumer Reports/WebWatch reports that 25 percent of online shoppers are concerned about personal security and sharing their financial information online. The numbers become more meaningful if you know why visitors abandon shopping carts. If you know why, then you can remove the obstacles to conversion.