Over last 10 years I have been privileged to participate in the architecture, design and implementation of some of the largest e-commerce websites in North America.

The cost of a creating an ecommerce website and the amount of revenue that the site generates are rarely related. Some of the implementations I on was on cost clients less than $100k but had a conversion rates well above 7%. A couple of the other implementations had a final total bill of above $15 million yet these sites had conversion rates below 1%. Reflecting back on the numerous projects, the main factors that impact e-commerce conversion rates fall into one of the following categories:

1. Competitive market forces including branding, marketing and pricing issues

2. Understanding of the online visitor/shopper behavior

3. The set of challenges around the design and implementation of the e-commerce website

4. The introduction of new technologies that enable us to do things more efficiently and effectively

5. Integration between e-commerce websites and other internal or external systems

6. The particular set of challenges in running and maintaining large ecommerce websites particularly in the area of cataloging

While ecommerce websites are no longer in the infancy stage, they are far from reaching the maturity level their off-line counter parts have reached. I believe that conversion rate is a good indicator of how well a website is performing. Some might argue that this is an oversimplification of the variety of key performance indicators that measure the health of a website. However, conversion rate acts as a thermometer of how well financially a site is performing. They also give us an insight to how satisfied online visitors are with a particular site.

As I surveyed the top 500 e-commerce websites, I noticed that the majority of them continue to reports an average conversion rates below 5%. But for each category you will find leaders who are able to converts sometimes at double the average conversion rates for that particular vertical.

Are the sites lagging behind paying close attention to their conversion rates or not and are they doing something about it?

Most companies we talk to have tried one thing or another in the last 12 months to increase their conversions. Some are more successful than others. The biggest challenge executives tell us they face as they are considering conversion optimization projects is that these initiatives require a considerable amount of time, money, and resource commitments. At the same time, no one can guarantee exact results for optimization projects. The truth of the matter is that some of the elements on an e-commerce websites might be operating at their full optimization rates, if such a term exists.

Another challenge is that the area of conversion optimization is still in its early stages. Companies who specialize in conversion optimization continue to develop new methodologies and technologies to help clients achieve their targets revenue goals.

There are also different competing approaches of how to handle a conversion optimization projects. Some companies firmly believe that software must be deployed and be the guiding principle in every conversion optimization work. Others, including Invesp, believe that a more balanced approach that utilizes a mix between marketing and software methodologies will produce better results for clients. I believe that 10 years from now both approaches will continue to be successful, although at varying rates.

I will spend more time analyzing each one of the challenges in increasing ecommerce conversion rates over the next few weeks. And I would love to hear your thoughts. Do you run an ecommerce website? What is your conversion rate? Have you attempted to optimize besides? How successful have you been? What did you find most challenging in optimizing the site?