How to increase conversions for e-commerce apps
Even if you have the best products on the market, your path to purchase plays an essential role in successfully driving conversions and boosting revenue. According to a study by mobile commerce experts JMango 360, app users view 4.2x more products per session compared to mobile web users, and are 3x more likely to convert. This means you’re already ahead of some of your competitors, but there are still many ways you should optimize conversion rates for maximum profit. By focusing on conversion rates, you can streamline the user journey, give your users the best possible in-app experience, and capitalize on every opportunity to increase revenue. In this guide, we’ll define the term and share best practices to help you optimize your conversion rates.
What is a mobile conversion rate?
To calculate a conversion rate for a specific campaign, take the total number of users who have completed the desired action and divide it by the total number of people exposed to that campaign. For example, let’s say you want to calculate the conversion rate for your latest campaign and the conversion event is an install. Your campaign reaches 10,000 users, and 500 users install your app as a result of that campaign: 500/10000 = 0.05, or a 5% conversion rate.
Now that you know your conversion rate is 5%, this can be compared to other campaigns. You’ve also set a benchmark to improve upon through trial and error. For e-commerce, you will also need to discover how many of those users made a purchase.
How should you determine the mobile e-commerce conversion rate?
In the case of e-commerce apps, “conversion rate” also refers to the percentage of a user group that makes a purchase. This works exactly like the example above, but with a purchase transaction as the conversion event. In the example above, your latest campaign brought 500 users to your app. If 10 of those users completed a purchase, the conversion rate is 10/500 = 0.02, or 2%. This can be used to learn whether your campaign has brought you high value users.
You can also use conversion rates to determine where users lapse. The path to purchase is complex, with multiple touch points along the way, so it’s important to know which areas are in need of improvement. This is why it’s critical that you are tracking every event in your user funnel. By tracking in-app events, you can learn the conversion rates for each step, highlighting areas for improvement. Here’s an example (taken from our dynamic product ads ebook) showing hypothetical conversion rates from step to step.
In this scenario, you can see that your app has no problems getting users to browse products in detail, but there’s a huge decrease in users who proceed to “add to cart.” This gives you the information you need when choosing who to target for re-engagement.
What is a good mobile e-commerce conversion rate?
Although it’s important to learn from vertical-specific industry benchmarks, conversion rates are highly contextual. For e-commerce apps, conversion rates will vary depending on the type of product and the average product price. For example, an app selling $20 concert tickets should have a higher conversion rate than an app selling $500 furniture pieces, making the two measurements an unfair comparison.
Conversion rates will also vary depending on your audience. A marketing campaign reaching new users may have a lower conversion rate to an email campaign. This is because the latter group are already familiar with your business and must have signed-up to be contacted by your marketing team.
Six best practices to optimize conversion rates for e-commerce
Conversion rate optimization (CRO) includes the analysis and implementation of actions that will increase the number of users who convert. Below are six ways in which you can optimize the path to purchase and consequently increase your e-commerce app’s conversion rates.
1. Track events to improve analytics
Before you can optimize the user funnel, you need to know where users are failing to convert. By measuring engagements such as installs, purchases and registrations, event tracking enables you to learn which channels deliver high value users. This is important for your user acquisition strategy, and can also be used to gain valuable insights when trying to increase conversion rates.
By tracking relevant events with your mobile measurement partner, you can learn how and when users need to be reengaged and spot potential issues in your conversion funnel. For example, you might notice that a disproportionate number of users are adding items to their cart without converting. In this case, there could be an issue with your transaction procedure, or that you have unexpected costs upon checkout (more on this later).
When analyzing the “leaks” from step to step, remember that users don’t usually complete every step in one session. For best results, you need to analyze when users need to be retained. By pinpointing the best time to re-engage users, you increase the chances of conversion and avoid wasting ad spend on users who would have converted without being re-engaged.
2. A/B test your app’s design and creative
A/B testing is the only sure-fire way to know that your path to purchase is in the best possible shape. By showing variants of your app’s design, creative and functionality to segmented audience groups, you can learn what drives the most conversions and apply those changes to optimize the user experience for your entire audience.
For example, it’s important to test different product descriptions. If you find that adding longer, more detailed descriptions of your products significantly boosts revenue, you’ve identified a cost effective optimization that can be implemented beyond your sample size. This logic applies to any creative users will encounter throughout the path to purchase, as well as key design elements of your app.
A/B testing is also useful to learn why users have lapsed, despite showing intent to convert. For example, if your analysis shows that users are failing to convert despite adding items to their cart, it could be that you have unexpected costs upon checkout. Based on this hypothesis, you can display details such as shipping costs and return policies with more transparency (such as on the product page) and observe whether this affects your conversion rate.
3. Streamline and simplify your app’s navigation
Your app’s navigation can make or break a sale. In a study by Google, 61% of smartphone users said their favorite apps are easy to use and navigate, while digital experience platform Acquia found that 53% of consumers say brands often fail to meet their experience standards.
To ensure that your navigation offers a user friendly experience, it is critical that users have easy access to a search option and relevant call to actions (such as checkout/cart). It’s also imperative that your app’s navigation is free of clutter. Take a look at the simplicity of the Apple store’s navigation, with only five options: discover, shop, sessions, search, and buy.
This can improve your conversion rate simply by making it easier to convert. You can test this by counting the number of clicks it takes for a user to find and purchase a popular item. If the user can browse more products while always staying one touch away from the final step in the user funnel, like in the example above, this will boost conversions.
For the best possible user experience, it’s also important for brands to have a consistent aesthetic across desktop, mobile web and app. That way, the user only has to become familiar with your processes once, even if they are purchasing across multiple channels.
4. Personalize your ads
As personalization becomes an industry standard, a one-size-fits-all approach to your advertising is no longer sufficient. To stay ahead of the competition, it’s important to offer an experience tailored to each user’s individual needs. For example, dynamic product ads (DPAs) enable you to engage users with hyper-relevant, personalized creative.
By advertising based on a user’s signal of intent (such as browsing a product or clicking an ad), personalized ads allow you to expose users to hyper-relevant creative. For example, a user browses a red t-shirt on your e-commerce app, clicks on the product description, reads reviews of that product, then leaves the app for three days. If you’re tracking those events and can identify this signal of intent, you can use DPAs to advertise that specific product the user before they’re gone, never to return. With deep links, that user can then be sent directly to the relevant product page – and because the user has already shown interest, they are more likely to convert than new users.
Examples of successful DPAs include Booyah, a digital agency that decreased its cost per order by 71%, and CPC Strategy, who discovered that its clients increased ROAS by almost 250% with personalized ads. For a full breakdown of how personalized ads work for e-commerce, read our dynamic product ads ebook. In this guide, we explain each step of DPA implementation and share best practices for optimal results.
5. Validate your products with user reviews and testimonials
User reviews are a powerful and cost effective method to persuade users to convert. According to BrightLocal, 91% of customers aged 18-34 will trust online reviews as much as personal recommendations. For high-rated products, this will have a significant impact on your revenue. For example, a Harvard study revealed that for every additional star on a Yelp rating, that company will generate a 5-9% increase in revenue.
User reviews also have the benefit of showing that you value your customers’ feedback, improving the overall user experience. This is why the likes of Amazon and the App store highlight reviews for all their products.
6. Re-engage users with push notifications
If a user has your app installed, push notifications can be sent directly to their device. This is an effective marketing channel that can be used to re-engage users and increase your conversion rates. Localytics found that push notifications can boost engagement by 88%, while in-app messages triggered from an in-app event increased conversions by 4x.
When implementing push notifications, personalizing your messaging is proven to increase your open rate. For example, CleverTap’s push notification report found that even basic personalization (such as including a user’s name) increases open rate by 9%. If you’d like more insights, take a look at CleverTap’s advice on how to write “the perfect push notification.”
To learn more about conversion rates and how they can be improved, read our glossary term. We’ve also covered why you should watch your conversion rates to detect fraud, and a complete guide to in-app Conversion Rate Optimization. For more best practices to enhance your customer journey, be sure to read the first edition of LTV magazine.