eCommerce Conversion Rate Optimization Strategies, Tactics, & Case Studies

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Definitive Guide: eCommerce Conversion Rate Optimization

Conversion is important.

Today we begin a new series on how eCommerce stores can optimize conversions on their site.

We're going to dissect key pages from the most successful sites of 2018, including home, category, product, and checkout pages.

This guide will equip you with the exact tactics and strategies top eCommerce stores are using today, and how you can replicate their success.

Why Every eCommerce Store (including you) Should Care about CRO

​You know conversion is important.

Unfortunately, there is a wide gulf between knowing you should do something - and actually doing it. To get to action, you need to be both intellectually and emotionally convinced that it is worth the time and investment.

The good news is that conversion optimization will always matter and always pay off in the long run.

Here are just a few reasons why.

1. Directly multiply profits

First, and most clearly, multiplying your conversion rate will directly impact your revenue and profits.

What is less obvious is how conversion rates have a disproportionate effect on your profits.

This is due to the way your costs are structured. Your business incurs fixed costs everyday, regardless of what your sales are. But, every incremental sale only incurs the variable cost of the product being sold.

Let's assume your store pays $100,000 in payroll and facilities a year, and currently creates $120,000 in revenue. 

Your store currently converts at 1%, with an average purchase price of $100, and an average profit of $50. 

Doubling your conversion rate to 2% would

Increase your revenues from $120,000 to $240,000 (2x).

Increase your profits from $20,000 to $80,000 (4x)

In other words, doubling your conversion rate (revenues) does not double your costs. Because of this, when you double your conversion rate, you'll double your revenue and more than double your profits.

2. Lower Your Cost per Customer Acquisition

Second, when you increase your conversion rate, you are also lowering your cost per acquisition. 

While this is another obvious point, the implications are tremendous. Spending less on your variable cost of business means you generate more profit per sale.

This is great by itself, but the real power comes in what you can do with that extra net margin - specifically unlocking additional channels of lead generation.

3. Add Channels for Lead Generation

Advertising is getting more expensive. It's actually kinda scary.

MarketingDrive reported in February of 2018 that Facebook ads cost a whopping 43% more on average. 

The cost to reach audiences in Facebook is expected to continue to rise, with the company tightening inventory and increased competition. 

The trend is real across marketing channels.

As the image above shows, over the course of a single year, most categories in Amazon's sponsored product listings increased by healthy double digits - with Electronics increasing 89% year over year.

However, companies with higher conversion rates are at a distinct advantage when bidding against other companies.

The added margin you have allows you to profitably outbid your competitors, converting still more customers, and on in a virtuous cycle.

4. Increase Affiliate Benefits & Pay 

Similarly, your ability to partner with affiliates grow in lock-step to your ability to convert traffic.

Affiliate partnerships through Instagram influencers, Youtube, Snapchat, and even Twitch continue to drive attention and massive sales.

In 2016, a study was released showing that the average ROI from these campaigns were 11x that of display advertising.

However, currently the major way influencers and affiliates are compensated is based on their reach. It is up to you, as a store, to convert that traffic.

Increasing your conversion rate not only makes influencer marketing possible, it allows you to invest in your relationships and reward affiliates with higher than average benefits.

How to Identify CRO Opportunities

eCommerce conversion optimization can be tricky.

Most sites we see have hundreds or even thousands of pages. Each page can have dozens and dozens of elements on it. How do you choose what to test first?

To answer, it is important to understand the primary costs of A/B conversion rate optimization.

3 Primary Costs of CRO

  • Human Capital Costs - Team resources are not infinite. Depending on your setup, testing can require design, engineering, and marketing resources.
  • Financial Costs - Tools, software, and payroll are all significant financial costs. 
  • Time Costs - Lastly, testing takes significant time to validate a winner.

Big Changes (almost) Always Win

Given the costs associated with conversion optimization, it is almost always better to go for big wins.

This is especially true if

1. You would be happy with overall conversion rate gains

2. Your site doesn't generate a massive amount of traffic to reach statistical significance quickly

3. You've already collected a number of research based, battle tested eCommerce CRO improvements.

If you’re reading this article, you have access to tons of research based ideas. The bottleneck for most teams will be manpower and implementation.

There is not enough time or resources to single out every improvement and test them individually. This graph from
Conversion Rate Experts sums it up nicely:

“Your new version has an 80% higher conversion rate than the existing version. As you can see in the graph, the time taken to detect that improvement would be just two days….

If you were looking to detect a 10% improvement, then the split-test would take several months to conclude.

The moral of the story is that small improvements take ages to detect, disproportionately and counterintuitively so.”

In other words, shooting for larger changes greatly reduces the time cost in implementing conversion rate testing, and greatly optimizes the human and financial capital required.

"Shooting for larger changes greatly reduces the time cost in implementing conversion rate testing, and greatly optimizes the human and financial capital required."

How to Find the Biggest Opportunities for CRO

​There are two tactics you should employ to identify the biggest opportunities for conversion rate optimization. 

Prioritize Bottlenecks

Every site has checkpoints that all prospects have to go through to become a customer. 

There are checkout pages, product page layouts, and upsell thank-you pages. Focus on the pages that the majority of prospects go through. 

Traffic Percentage

​​​​Which of your pages get the most traffic?

If one category accounts for 80% of sales, invest in that category before the others. There isn’t any point investing resources to pages that are currently not being seen.

By creating big changes to the most prominent pages on your site, you will literally accelerate your results by magnitudes.

Using Product Recommendations to Improve Conversion Rates

Product recommendation engines are incredibly effective at improving conversion rates. There are three broad types of engines: collaborative filtering, content based filtering, or a hybrid model between the two.

eTailers can set personalized merchandizing rules to maximize sale volume. 

In fact, product recommendation stats show that these techniques can increase conversions by 550%. 

Casper Case Study

Our first eCommerce conversion optimization case study is Casper.

As of January 2018, the company has raised over $170M. Since opening in 2014, the company has passed the $600M cumulative in revenue benchmark.

For this case study, I went back and time and grabbed Casper’s homepage in 2015. I then compared it to its current homepage to see what optimizations the Casper team has made over the years.

5 Key Improvements Casper Made Above the Fold

First, we’re going to look at how Casper has optimized it’s homepage above the fold.

For this article, I chose 700px as the height to be considered. You can see the two homepages below.

Casper made 5 major updates to its homepage.

2016 Homepage

2018 Homepage

1. Specific, Benefit Driven Headline

Between 2016 and 2018, Casper updated the messaging they used. 

The updated copy carries two significant improvements.

First, it is benefit driven. While the 2016 headline hints at better sleep, it’s phrasing is generic. “Perfect”, “everyone”, as well as the tagline “well slept” are not as powerful or direct as simply stating comfort.

Second, the 2018 version utilizing social proof and authority (a common theme in the update) in a simple, concise way through the words "award-winning".

2. Added Trust Elements

The second biggest difference between the two homepages is the use of trust elements.

In 2016, Casper did not include any trust elements above the fold. By 2018, Casper had implemented a unique testimonial/press/review bar bleeding into the next section.

While logo bars are common, I haven't seen many sites use a combination of social proof elements in the bar. Casper makes use of good press, product reviews, and company rewards in one section.

3. Implemented "End State" Hero Image

Images are a powerful way to create context and emotion on your page.

While both hero images were high quality and exhibited Casper’s target audience, there are a few key improvements the 2018 version has.

The second image captures the primary benefit of a Casper mattress better, namely a great night’s sleep. It also does a fantastic job echoing the copy of “award-winning comfort”, with a multitude of plush pillows and serene scene.

4. Improved Call To Action Copy

Both the 2016 and 2018 versions of the homepage displayed a singular call to action button in Casper's brand color purple. 

However, the copy itself changed from "See the Products" in 2016 to "Shop the Mattress". 

While the changes are subtle, I believe the CTA in 2018 is more compelling. It is specific to Casper's flagship product, and shop is a stronger, almost presumptive close verb than see.

5. Expanded Navigation

As with the CTA copy, Casper updated their navigation to be more specific.

In 2016, Casper hid their products under a single category called "Shop". Before customers could even see a product, they had to hover over this tab to find a dropdown menu.

This extra step is counter-productive, and is annoying to shoppers.

In 2018, Capser made significant improvements. They removed this top level hierarchy and replaced it with the major product categories that they offer.  This benefits Casper by

  • Educating Customers - Customers immediately understand that Casper sells more than just mattresses, but can also help them with pillows, sheets, and bed frames.
  • Faster Navigation Experience - Removing the top layer gave customers the option to immediately navigate to category pages most relevant to them. 
  • Remove Frustration - Additionally, it eliminated double hover navigation issues which are difficult for customers to go through. 

Next Steps

Ultimately, conversion optimization is about presenting the right offer to the right customer in a compelling, relevant way.

To speak to your prospects at an individual, 1:1 level, you need to leverage personalization techniques.

  • Understand eCommerce Personalization - Using a combination of dynamic content and website personalization creates relevant, high converting offers. 
  • Understand Personalization Challenges - We built a complete guide detailing the 4 major personalization challenges, and what questions to ask your personalization vendor here.

Finally, to see how Barilliance helps hundreds of eCommerce stores increase conversion rates, you should request a demo here.