Decoding Shopify Conversion Rate: The Hidden KPIs That Influence Every Purchase
- Reading time: 10 mins 13 Sec
A key metric of a Shopify store’s success in converting visitors to customers is its conversion rate. Retailers often only look at the number displayed on their Shopify dashboard, but there are many other factors at play behind the scenes when determining how many visitors will become paying customers.
The actions of each visitor are influenced by multiple hidden signals; these include behavioural tendencies, technical aspects, how customers interact with the products, and various other factors that help an online shopper develop trust for the retailer. Sound knowledge concerning these key performance indicators (KPIs) will help any ecommerce business to maximise its conversion rate, improve user experiences and develop a more consistent source of revenue.
In this blog, we will identify many overlooked data points that help determine whether or not visitors will convert into buyers, and why being able to decipher these points is critical for an ecommerce business utilising a Shopify store.
Why Understanding Shopify Conversion Rate Goes Beyond Basic Store Metrics?
Every ecommerce platform has its own unique features and functions, which fundamentally alter how consumers behave in terms of purchasing processes, as well as how they engage with the brand. For example, an online shopper may buy promptly when they visit a website that has a fast loading time and an intuitive interface compared to another ecommerce brand, which may cause them to hesitate or not complete the buying process for the same product because of a slow loading time or a confusing layout. You need to understand visitors’ journey throughout their time on your e-commerce store to improve conversions effectively.
The true meaning of your Shopify conversion rate isn’t simply the final number shown in your dashboard. When analysing your Shopify store conversion optimisation, visit the entire customer journey. Shopify’s conversion funnel begins with product view, followed by adding product(s) to the cart, and ends with checkout. Low conversion rates are a result of having at least one section of the conversion funnel being underperforming; therefore, if you treat all steps through the conversion funnel as part of the customer journey, and not just a number, you can strategically approach improvements.
Your conversion rate is highly related to the quality of traffic you receive. A successful ecommerce marketing strategy involves getting ideal or ready-to-buy visitors to your ecommerce platform. Traffic that arrives at your site is irrelevant, and will not convert well, regardless of how great the products are. On the other hand, qualified traffic consists of visitors who will spend more time viewing product detail pages, engage with your content and ultimately return again, leading to a higher Shopify conversion rate for your online business.
Successful online retailers focus on bringing qualified traffic because it is the foundation for the long-term success of their businesses.
The Hidden KPIs That Shape Every Purchase Decision In The Shopify Conversion Funnel
This metric indicates the earliest stage where the buyer shows intent to purchase. If a high number of buyers look at a product, but only a low number of buyers add the item to their shopping cart, the most likely cause of this discrepancy is a lack of clarity in the product’s value, image quality or description. By analysing and improving this percentage, ecommerce businesses can also assess whether or not they have an attention-grabbing and persuasive product listing that attracts the interest of online shoppers. In addition, this metric serves as an early indicator of how well an ecommerce platform communicates product relevance to potential customers.
When buyers have a high level of confidence when adding a product to their cart, it indicates to them that the brand’s messaging, pricing and trust factors are aligned. A decline in this percentage indicates that there are issues regarding a buyer’s perception of the product’s quality or the clarity of product information. This measurement is important for online businesses to understand how many users are moving through the conversion funnel, since improvements in this metric increase the likelihood of completing a sale.
This shopify store metric shows how likely buyers are to proceed to checkout. When a significant decline occurs in the percentage of customers proceeding to checkout, it can be attributed to unanticipated shipping costs, confusing fees, or distractions caused by the display of multiple products in one shopping cart. Fixing these types of issues can ultimately reduce drop-offs from users entering the Shopify check-out page and will likely allow more users to move seamlessly through the checkout process. Therefore, it is essential for ecommerce businesses wishing to increase conversion rate without substantial redesigns to utilise this metric as an evaluative standard.
Your conversion rate, at the end, depends on the checkout page of your Shopify store and what expectations customers have from it, such as speed & security with payment methods. A slow or insecure checkout can influence whether or not online shoppers complete their purchase. If customers have issues with the checkout process, it will result in many unexpected abandoned carts. To maximise conversion rates, ecommerce businesses should focus on optimising the checkout process, making a secure checkout page a high-impact KPI for shopify conversion optimisation.
Behavioural KPIs That Reveal How Online Shoppers Think About Your Shopify Store:
The amount of scrolling that online shoppers do on a page is an indicator of their interest level in your offerings. If the customer does not progress past the top of the page to see additional content, this indicates a potential disconnect between expectation and content. Online businesses that pay attention to how shoppers really search online and track the amount of time a user spends on a specific product page, as well as how far down they scroll, can determine the intent of the user and will be able to refine the messaging of the product.
Ecommerce businesses will know what an online shopper is looking for through the search bar. The keywords searched, and the frequency of searches, suggest that the customer is having difficulty in finding what he or she wants using the navigation menu. By identifying the types of searches done through the search bar, your ecommerce marketing strategy can be refined to improve the ability for customers to easily find what they’re looking for.
A bounce is defined as a visitor who leaves the website without taking any action after clicking on the page. An extremely high bounce rate for a page can indicate that it has a slow load speed, the message is muddled, or there is not enough branding to lead to customer confidence. By observing the bounce pattern across multiple types of product pages, ecommerce businesses can determine where customers lose confidence and how to build that back through their ecommerce marketing strategy.
Returning customers convert at a much higher rate than first-time customers because they have previously established a trusting relationship with that ecommerce brand. To retain existing customers, an online business needs to have an ecommerce marketing strategy for retention in place. An effective Shopify store has both new and returning visitors. Measuring this metric will help a brand assess how successful its customer retention initiatives are at generating long-term sales growth.
Also read: Retention Marketing: Winning Strategies & Real-Life Examples
Technical KPIs That Quietly Influence Shopify Conversion Rate:
Based on how quickly your Shopify store’s web pages load, a customer has an immediate feeling of confidence in your brand. This creates a more fluid and consistent shopping experience with your website. A website that takes a long time to load will lead the online shopper to abandon your online store without even viewing any products. Investing time and resources into making things more technically efficient is an excellent way to enhance user experience, resulting in more sales.
Most of the time, customers are using mobile devices to view your site; therefore, a successful online business needs to be able to adjust its ecommerce marketing strategy appropriately to fit different screen sizes. Having a mobile-first strategy is critical because when a graphical element overlaps another, or a button is difficult to click on a mobile device, it decreases the potential for a customer to convert. Responsive design allows a customer to move easily through the conversion funnel.
Also read: Why Every E-commerce Brand Needs a Mobile-First Strategy?
Oftentimes, there can be backend application conflicts, which can slow down web pages or render certain website functions inoperable. When there are delays in syncing your inventory, customers may be shown the product as out of stock unexpectedly. Payment gateways that are associated with your Shopify store may also become bogged down during high traffic times. These hidden issues have a negative impact on the ecommerce optimisation of your website and ultimately affect how a customer uses and buys from your store.
Revenue KPIs Beyond Conversion Rate That Strong Ecommerce Businesses Track:
A higher AOC enables ecommerce businesses to grow at a faster rate without having to incur any additional marketing costs. Ecommerce marketing strategies, including the use of bundles/add-ons/premium versions of products, help to encourage an online shopper to spend more money with that store. Tracking AOV on a weekly basis can help businesses make better, more informed decisions.
Frequent returning customers contribute significantly to the long-term stability of a retail business through the KPI of customer retention. This reflects customer satisfaction with your product and trust in your brand and product quality. Improving customer retention allows a retailer to create a consistent, sustainable, and significantly higher revenue stream through repeat business rather than relying solely on acquiring new customers.
Also read: Tired of One-Time Customers? How Agencies Build e-commerce Customer Loyalty
Understanding the way your customers engage with your product on a regular basis will allow an ecommerce brand to create better product launches, content strategies, and remarketing campaigns. Cohort analysis is a method of determining what behavioural trends exist within a customer group that will have an influence on the Shopify conversion rate.
Also read: 5 Content Hacks That Drive Repeat Sales for D2C Brands Like Magic
With over 13 years of experience, Nethority has developed a data-first approach to understanding why shoppers behave the way they do in the Shopify store. We determine the areas of the store that create friction points through the analysis of heat maps, scroll behaviour, search patterns, checkout performance and average order value (AOV) trends.
This approach has helped many D2C brands upscale their revenue & conversion rate for their stores at all levels of the conversion funnel and has, in turn, created more predictable, higher-performing ecommerce businesses. You can check out how Nethority helped one of their ecommerce clients scale up their revenue from ₹5M/month to ₹10M/month in just 6 months with an integrated digital marketing strategy.
Case Study: ₹5M to ₹10M Revenue: How Nethority Drove 100% Growth
Long-term success in optimising a Shopify store’s conversion rates requires understanding the hidden key performance indicators that drive customer behaviour. A brand that analyses its conversion funnels deeply and understands how its customers behave through their interaction with the store design will provide customers with an experience they expect, which in turn increases conversion rates. Successfully operated Shopify stores do not guess what their customers are looking for, but rather study the way they interact with their stores, improving it over time, and refining the conversion process based on actual data and clearly-defined intent.
FAQs:
The KPIs for Shopify are metrics that measure how well the Shopify store is performing. The core metrics of KPIs would include add-to-cart rate, check-out completion rate, bounce rate, Average Order Value (AOV), Lifetime Value (LTV), and total number of conversions.
You should monitor your Shopify store KPIs at least weekly to identify if there are any early performance changes. You should also review more in-depth metrics such as Lifetime Value (LTV), cohort analysis and retention metrics monthly.
The conversion rate for your Shopify store can be found in the Shopify Analytics section under online store conversion. You can check the data for add-to-cart, check-out and purchase conversion rates and how well your funnel is performing.
The average conversion rate for a Shopify store is usually between 2% – 3% depending on the industry and the quality of the traffic your store receives. Online stores that load quickly, have compelling product pages, and streamlined checkout processes will generally have conversion rates higher than the industry average.
The KPIs you should track to gain insights on shopper behaviour and identify opportunities for increasing overall store conversions include add-to-cart rate, cart to checkout rate, checkout completion rate, bounce rate, scroll depth, Average Order Value (AOV), repeat purchase rate, and Lifetime Value (LTV).
