Posted May 2, 2008 10:34 am by with 19 comments

Tweet about this on TwitterShare on LinkedInShare on Google+Share on FacebookBuffer this page reports that the highest conversion rates among major online retailers during March were the following:

Office Depot – 20.9%
QVC – 19%
VistaPrint – 18.3%
Roamans – 18.1%
Lands’ End – 16.2%
eBay – 15.7% – 15.5% – 15.3%
L.L. Bean – 14.6%
Pottery Barn Kids – 14.2%

These conversion rates are through the roof when compared with industry averages. In fact, they are not even believable unless you understand what the most important driver of conversion is.

Several years ago, a company I owned brokered online advertising. When working through the numbers with clients, it became obvious that some of them were completely in the dark about conversion. One client that comes to mind stockpiled an inventory equal to the number of impressions she was buying from us. In other words, she assumed a 100% clickthrough rate and 100% conversion! I don’t know how many times I have heard clients tell me that everyone buys that comes to their site. (After all, why wouldn’t they?)

The reality is that the average online retailer probably experiences around a 2.5% conversion rate. If you fall into that category but want to achieve the kind of conversion rates listed above, I can tell you how to do it.

First of all, site redesigns, improved shopping experiences, security policies, privacy policies, and similar factors that so-called conversion experts tout will not do it. That is not to say that you cannot see modest improvements from those kinds of improvements but they are not the difference between conversion rates of 2.5% and 15%. Adding a privacy page to an existing site is more likely to raise a conversion rate from 2.5% to 2.55% (which by the way, could be significant).

So how do you achieve astronomical conversion rates? The answer is simple–build your brand. Here is a little secret about online retail. The vast majority of customers are already sold to a product or store before they ever come to a site. The reason that Office Depot achieves more than a 20% conversion rate is because people do not go to that site to browse. They have already been sold on the Office Depot brand and they go there to buy.

A look at your stats will reinforce what I just said. For example, I know that people that search for “Vitabase” and come to our site are going to convert at 15% or better. On the other hand, people that are searching for a term like “health supplements” will convert at less than 2%. Why? People searching for “Vitabase” are already sold on us.

In the end of the day, in internet retail, all roads seem to lead to the same place. Concentrate on your brand and everything from SEO to customer loyalty falls neatly into place.

  • I am sorry but I am having a very hard time believing in these conversion rates.

    Did all of these companies just give IR their conversion rates?

    Is this the global average conversion rates across the websites?

    Jaan Kanellis’s last blog post..SEO Blog RSS Feed List, The Ones I Personal Follow

  • Also how much are they spending to get these rates? It doesn’t help if you to have a double digit conversion rate if your cost per conversion is through the roof.

    Jaan Kanellis’s last blog post..SEO Blog RSS Feed List, The Ones I Personal Follow

  • Interesting. In the past, I would have agreed with you. For sure, the rates are probably not exact. Everyone measures conversion different ways, and sometimes these research companies do some estimating.

    Here is the bottom line. If you get people to your web site that already know you, they are often presold and the conversion rate is going to be much higher. That is what these companies are benefiting from.

  • sergei

    it has been mentioned before, but most of these sites are “cataloguers”. people research the product, find it in the catalogue (decide to buy), go to the online shopping register and buy (nonwithstanding the usability of the respective shopping registers). in other words, the conversion occurs before they visit the site. so, it would be really cool if IR actually tried to weed out the cataloguers, or publisher a non-cataloguer ranking.

  • These are huge conversion rates – I wish!

    Did the study mention if these rates were among first time visitors or if they were a combination of first and regular visitors.

    Jaan – I’d imagine that the cost per conversion and conversion rate are independent when just looking at conversion rates. Unless, they’re getting further qualified leads from somewhere.

  • Sure they are independent, but I bet one is much worse than the other with this high of a conversion rate.

    Jaan Kanellis’s last blog post..SEO Blog RSS Feed List, The Ones I Personal Follow

  • Those conversion rates are incredible. I’m not surprised about Office depot being high, as like you say they are a large well known brand. The thing I’m surprised about is Vistaprint, although maybe I’m stupid to think it’s not a well known brand.

  • PS3

    Jean, I guess it depends who you gauge the cost of conversion. Like the article says, must people visiting sites like Office Depot would have already visited or purchased from them. It’s not like they would be relying on a heavy ppc campaign (I wouldn’t have thought).

  • So share with us what they did to get these conversion rates. Yeah were did you get the information from. Are they conversions as in sales or are they conversions as in leads, I have seen people add contact us as a conversion.

  • Interesting.

    Here is how it worked for me. On deciding it is time to get a crosscut shredder, first all reviews were considered.

    Then shopping for price. It turns out not only did the online version of our local office store have it, they were the cheapest price and offered free shipping. Lets see, gas at $3.61 per gallon…plus time = bargain.

    Oh yea, we don’t have a Office Depot local to us. Are we catalogers? No, we actually ended up waiting till business took me to a town with the store where the machine could be checked out hands on, and then it was purchased. Oops, this didn’t make it into the statistics but it was a conversion of sorts.

    Oh yes, I purchased it at the internet price, over $40 less than the other prices listed.

    Jonathan Steele’s last blog post..May 2, Communication style, Meeting the Personality Style of the Audience

  • It also depends on the quality of traffic. You can have the best converting mountain climbing product for a killer price but if all your customers are geriatrics, I doubt you will sell many.

  • I think grand plays a huge role – if you ain’t got that then your site better inspire confidence in other ways.

    I’d like to know the referrals. Do people start at Office Depot from memory or land there from a price comparison site (choosing the well known brand if price is comparable) after starting with a generic search?

    roxanne darling’s last blog post..Podcasting Listeners Are Paying Attention

  • Nice addition Jonathan. Many conversions are actually completed off-line. Many companies will get calls and walk-ins.

  • profit is still more important than the conversion rate. you can have high sales volume but a slim profit margin because of high promotion costs

  • Agree. profit is way more important.

  • I don’t really care about conversion rate too actually. But knowing the fact that the vast majority of customers are already sold to a product or store before they ever come to a site is really surprising to me.

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  • Its not just the brand that you are sold on, it also needs to be easy to get. Specially if you are not living in America.

    Eva White’s last blog post..Rising Hemlines.. Rising Stocks

  • I agree with Prosperity Writer about profits.