In the “new normal” where e-commerce activity increased by 44% in a single year, thousands of e-commerce brands are asking themselves how to maximize conversions.
More sales are happening, but not for everyone. How can a brand secure a bigger piece of the pie?
On Amazon alone, there were $386.06 Billion in sales in 2020, up almost 38% from the year before. That’s a lot of opportunities to seize. However, if your online sales didn’t climb a full 38 to 44% last year, the opportunity hasn’t been fully realized for your brand.
If you’re reading this, there’s probably room to grow. Optimizing your conversion rates is how to do just that.
First, let’s break down the importance of conversion rates. More than half the products sold by Amazon’s third-party sellers today cost an average of $11-25. That means that to gross another million in revenue on Amazon in one calendar year, the average brand needs to sell between 40,000 and 91,000 additional items. Boosting conversion rates on traffic the seller already has will be more effective than advertising their way to enough new traffic to get those sales.
Let’s hunker down to talk about how product data can make more conversions happen. Your ads can be flashy and your blogs positively fabulous, but ultimately, it’s the product data on each listing that convinces someone to buy.
The End Game
Ask yourself, what are you in this race for? Are you out for product visibility and a name for your brand? Or are you more interested in sales and dollars in your pocket?
Either way, you need to work on your conversion rates to get there.
In the United States, overall e-commerce conversion rate averages are around 2.6%. Going back to that extra million a brand might like to gross on Amazon, that translates to between 1,458,400 and 3,499,860 visitors to product pages based on the average product price.
For a less daunting example, let’s imagine an Amazon storefront getting an average of 7,500 visitors this month. If there were 75 conversions (sales) in that time, that means the storefront’s conversion rate is 1%. Increasing conversions by just 1% would double the brand’s revenue.
Let’s take another example to see why conversion rate optimizations are essential.
Imagine a sizeable online direct-to-consumer (D2C) brand that had 660,000 visitors a month. Not bad, right? However, their conversion rates are on the floor. Their website hasn’t been optimized for mobile, and with today’s consumer expectations, that oversight has become a conversion kiss of death.
This same website also has a 1% conversion rate, translating to 6,600 monthly sales. That second part sounds nice, but with their average cart balance of just $40, they’re only grossing $264,000 a month. With 10 employees on staff, the brand is going to be in the red if they didn’t change something fast.
Now let’s say that brand has to find another $52,800 a month to stay afloat (in other words, 20% more than they’re making).
What options do they have? We count two:
- Buy more ads
- Hire more people
These options, however, are not easy to control. They also both require investing more, which increases what they need to bring in.
Both options take more of what the brand simply doesn’t have.
Now let’s say the brand chose to optimize their conversion rates using their product data instead. This works on an asset that’s already there. It’s also a strategy that acts faster and doesn’t require steep investments.
After the brand optimized conversion rates using product data, they came out with improved operational capacity, too, since their product data was radically improved. They also diminished their customer service calls and saw more repeat customers as the impact of their optimizations took effect.
To see how these benefits can snowball for your business, let’s get into how to use product data to secure more sales.
How to Use Product Data to Secure More Sales?
It’s easy to see how conversion rates are the easiest way to build more profit. Now, here are three specific ways your product data can improve conversion rates across all channels you sell on.
1. A/B testing
In A/B testing, group A sees something different than group B. This could be an ad you’re running on Facebook, or it could be two versions of your homepage.
It could even be two versions of your new product listing layout.
Whatever you’re testing, if you sell products online, product data will have something to do with it.
The ad copy you use will have product information and the ad headlines and images will be part of the data you store on the product you’re advertising.
It’s important to note that A/B testing must test only one variable in each test. If you’re running an A/B ad test to compare two product ad headlines, that’s all that A/B test can measure.
Every other part of the two ads must be the same. Otherwise, how would you know what the impact of that variable is?
Because A/B testing relies so heavily on product data, this endless sequence of A/B tests with a single factor change creates a hot mess of product information versions.
You have one version of your product file with the first ad, then another with the second, then another three versions of the file for the other three tests you’re running.
This quickly turns into a headache, however, A/B testing is so powerful when learning how to optimize your conversion rates, that it’s worth getting organized. Brands do this with product information management software (PIM), specifically designed to aggregate, organize, optimize and version all your product data, even for A/B tests.
With this tool in your arsenal, you can A/B test until you’re blue in the face.
The more variables you test, the faster you’ll optimize your conversion rates as you learn what works best for each channel, product, and audience.
2. Zoom in, zoom out
Now that you’ve A/B tested and gotten actionable data on what works and what doesn’t, you’re ready to get out the microscope. Look at the data you have on each click, each segment, and each audience.
Then ask, how can you apply that better-performing data to every SKU you have?
Take notes on potential style rules you could apply to your whole catalog.
Do consumers respond better to titles with a certain format? Do they like bullet points better on one channel than another?
Next, zoom out and look at the big picture. Ask yourself one critical question: if you performed A/B tests on different parts of your funnel (such as a social ad, then your homepage, and then a product listing), is there a point in your funnel where conversions drop off drastically?
If you convert at 5% at the top of the funnel but 0.5% at the bottom, that tells you where to focus next.
When making this kind of analysis, continue to look at your decisions through the lens of product data.
You’re optimizing your data, so it can lead to more sales. If consumers respond well to a specific product title structure, you’re learning something that can be applied universally.
3. Create and use more media
Consumer expectations have changed. Not only are more people buying products online, but their belief of what a brand should provide them through the experience has also shifted fundamentally.
The new consumer expectations are here to stay, and they’re continuing to evolve. If there’s anything successful businesses have excelled at the last two years, it’s adapting.
One of the biggest changes has been the need for more audio-visually rich media.
That includes more product photos, videos, AR-powered experiences, and virtual reality. Product data has come to include all of these, not to mention the huge trend in downloadable PDF product guides, comparison charts, product infographics, and more.
Creating these resources expands your product data library by hours of work, but it’s what consumers are looking for.
It can also be repurposed and used across every channel you sell and market on, making it a more secure investment. Creating more product data is essentially what this final strategy is about.
To be successful, this data has to respond to the needs and interests you know your potential buyers have.
Start small with more product photos. According to recent research, product images have become the most influential feature for consumer purchases on smartphones and tablets. The new era of product data is clearly multimedia.
Optimizing your conversion rates will start to feel like spinning plates once you factor in multiple channels.
From Amazon and other eMarketplaces to your own e-commerce website, each channel will mean another iteration of product data optimized for max sales.
All the same, getting it wrong can mean a complete stagnation of your business. You’ll be stuck looking at the options that require “more” instead: more money, more time, more personnel, more uncertainty.
Instead of going down that path, start by organizing your product data and using it like the resource it is to optimize your conversions.
Use a PIM software to make the aggregation and versioning of that data easier.
Next up, check out this article about optimizing conversions on your blog.
Amber Engine is a software company passionate about e-commerce. The company’s fast and simple PIM software gets sellers, distributors, and brands to Amazon and other online marketplaces in weeks instead of months and frees up time and resources to allow e-commerce and marketing professionals to create content that inspires modern discovery shoppers.