What is CRO?

Brendon Peters

September 24, 2021

Conversion Rate Optimisation, or CRO, is the process of optimising your website to increase the number of sessions that have a conversion. A conversion occurs when a user responds to a particular call to action or event. This could be anything from purchasing a product, to creating an account, submitting a form, signing-up for emails and more.

At its most basic level, CRO is finding out why visitors aren't converting and solving the problem. By identifying the issue, breaking down barriers and simplifying the user journey, you will effectively be enhancing your website to improve your conversion rate.

How to Calculate your Conversion Rate

You can calculate your conversion rate by dividing the number of conversions (whether that be transactions, button clicks, sign-ups or any tracked event) by the total number of sessions on your website and multiplying by 100.

For example, if in one day you had 1,200 visits to your website and 15 transactions, your conversion rate would be 1.25% ((15/1,200) * 100).

Conversion Rate Formula

What is a Good Conversion Rate?

The truth is conversion rates vary from industry to industry. What may be considered a strong conversion rate for a business that sells office furniture may be below average for a fast-fashion brand. A typical conversion rate will sit between 1.5% and 4%. However, this number is influenced by a number of factors from how well your channels are performing, how new or well-known your brand is, whether or not your products are a more considered purchase or the current situation in a given state or country.

The Pattern Ecommerce Benchmark Report that was released earlier this year reported an average conversion rate of 2.18% for FY21. This conversion rate is based on data amalgamated from a number of ecommerce sites from varying industries across Australia. This result was +18% year on year, driven by the impacts of COVID-19 and lockdowns with customers shopping from home.

Part of a good CRO program includes benchmarking your own:

  • Website traffic (sessions or visits)
  • Average transaction value
  • Current conversion rate

Other key metrics such as time-on-page may also need to be identified based on your CRO goals. Once you have benchmarked key metrics, you will now know which of these levers can be pulled to improve performance and aid in achieving revenue targets.

Can I Perform Conversion Rate Optimisation Myself?

The short answer is yes, but how effective it will be is yet to be determined. The process of CRO involves identifying how users navigate your site, what actions they take and what is stopping them from converting. This process is time consuming and would benefit from a dedicated consulting resource to analyse, test, review and report on their findings.

Recruit some support from another department or a staff member unfamiliar with your website that can look at the user journey with a fresh set of eyes. Challenge them to find a certain product and make a purchase while screen recording their behaviour. Being familiar with the website experience can often camouflage issues that customers experience regularly.

Some conversion rate optimisation best practices you can initially consider are:

  • Are your call to actions easy to find and use?
  • Can your users quickly and easily find what they're looking for on your website? If they use the search function, are they displayed the correct results in a well curated order?
  • Do your category listing pages allow the customer to filter and sort by price, popularity, features & benefits, and colour? Can your users filter out products based on availability?
  • Do your product display pages clearly describe the product with adequate care and size/fit instructions? Are you displaying all your payment and shipping methods?
  • Do you have customer reviews and testimonials visible for users to read?
  • Do you clearly display your privacy policy and communicate your users security is your top priority?

The above recommendations are by no means a comprehensive list and may or may not be relevant to your site but can quickly help you hypothesize what conversion blockers may exist on your website and help you to understand if you are capable of performing CRO yourself.

How Do I Start CRO?

In its most basic form, a CRO program can be broken down into 3 steps.

  1. Gather
  2. Test
  3. Repeat

Once you have established a baseline conversion rate and set achievable growth targets, it's time to start gathering your data.

1. Gather Data

Start by gathering quantitative and qualitative data to understand the ‘what’ and ‘why’ to your CRO problem. Free tools such as Google Analytics allow you view the customers journey in a funnel and identify at what stage of the journey your users are dropping off. Paid software such as HotJar, WVO and Crazy Egg are cost effective and easy to implement, allowing you to view heatmaps of what your users are clicking on and viewing, watch recordings of your customers browsing and how they use your site, and also allow you to request feedback through pop-ups.

Use this data to develop a clear sense of what is happening on your site and what changes can be made to improve the Conversion Rate.

  • At what stage of the browsing journey do your users drop off?
  • What are customers saying about your website and brand?
  • Are there any website interactions that can be easily enhanced?

2. Test

The most effective way to test changes on your website is through split testing or A/B/C testing. Split testing is comparing two versions of the same page against a control group to see which produces the strongest result. After a period of time you can take these learnings and implement them for all customers. Split testing requires a high volume of traffic to ensure you generate statistically significant results. Tools like Optimizely or Convert can be used to test different variations of your pages.

Some split tests that are often run on product pages include:

  • Changing the position, size and colour of the add to cart button
  • Adjusting the position of the size guide button
  • Adding pop-ups that offer to take the customer to the checkout after adding to cart
  • Comparing on-model vs. ghosted imagery.

3. Repeat

A CRO program should be considered as an always-on activity. It's an ongoing process to help you learn more about your users and improve your conversion rate. Set yourself a realistic goal and continue testing until you reach it, and then start again.

Try not to test pages that are dependent on the same results, for example testing an alternate location or colour of your ‘add to cart’ button at the same time, as you will be unsure which change is driving the result. Test one element at a time to help narrow down which aspect is improving or reducing the conversion rate.

There is only so much you can do to identify barriers and solutions in the customer journey without the aid of experts or technology. If you would like some help identifying opportunities to improve conversion rate or to determine whether a Conversion Rate Optimisation program is suitable for you, get in touch with our industry-leading consultants at Pattern now.

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Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)