Conversion Rates Demystified: The Shopify Store Owner’s Guide

James Kirkby
June 29, 2023

Hey Shopify store owners, let’s get real for a second. You’ve got products, you’ve got a website, and you’ve got dreams bigger than Jeff Bezos’s rocket ship. But there’s this pesky little thing called a conversion rate that’s keeping you up at night. Don’t worry, we’re here to break it down for you, no-nonsense style.

What’s a Conversion Rate Anyway?

Alright, let’s dive into the nitty-gritty of what a conversion rate really is. Picture this: you’re throwing a house party, and you’ve invited the whole neighborhood. People are walking in, checking out your snack table, bobbing their heads to the music, but only a handful are actually hitting the dance floor and getting their groove on. In this scenario, the folks tearing it up on the dance floor are your “conversions.” They’re the ones who went beyond just showing up – they engaged!

Now, let’s bring it back to your Shopify store. Your conversion rate is basically the percentage of visitors who come to your online store and take a specific action that you care about. Most of the time, that action is making a purchase, but it could also be signing up for your newsletter, downloading an eBook, or any other action that’s valuable to your business.

The Math Behind It

Don’t worry, we’re not going back to high school algebra. The math here is simple. Your conversion rate is the number of conversions divided by the total number of visitors, multiplied by 100. So, if 200 people visited your store today and 4 of them made a purchase, your conversion rate would be (4/200) * 100 = 2%. Easy peasy.

Different Flavors of Conversion

Now, not all conversions are created equal. You’ve got what the cool kids call “macro-conversions” and “micro-conversions.”

  • Macro-conversions are the big kahunas. We’re talking purchases, subscriptions, and other actions that directly impact your bottom line.
  • Micro-conversions, on the other hand, are the smaller steps that lead to the big ones. Think of them as the warm-up act. This could be stuff like adding a product to the cart, signing up for a newsletter, or spending a certain amount of time on your site.

Understanding both types of conversions helps you see the bigger picture. It’s like knowing both the lyrics and the beat to your favorite song. They’re both important in their own way.

Why Should Shopify Store Owners Care?

Here’s the deal: your conversion rate is like the pulse of your Shopify store. It tells you how healthy your business is. A low conversion rate might mean that visitors aren’t finding what they’re looking for, your prices aren’t competitive, or your site is harder to navigate than a corn maze.

On the flip side, a high conversion rate means you’re doing something right. Maybe your product photos are as crisp as fresh lettuce, or your product descriptions are more persuasive than a lawyer on TV.

Either way, knowing your conversion rate helps you make informed decisions. It’s like having a compass in the wild world of e-commerce. And in the bustling market of Shopify, where competition is as fierce as a season finale of a reality show, having that compass can make all the difference.

So, Shopify store owners, keep your eyes on the prize and pay attention to your conversion rates. It’s not just a number – it’s the heartbeat of your business.

Conversion Rates and Traffic Sources: The Dynamic Duo

Let’s get into the nitty-gritty of how you can be the Sherlock Holmes of your Shopify store by dissecting conversion rates through different traffic sources. And for this, we’re going to use the magnifying glass of the digital world - Google Analytics.

Traffic Sources: The Unsung Heroes

First, let’s talk about traffic sources. Imagine your Shopify store is an epic house party (yeah, we love parties). Now, people can hear about your party from their friends, see a flyer, or maybe get a text invite. These are all different ways, or “sources,” that bring people to your shindig.

In the e-commerce realm, traffic sources are the paths people take to land on your Shopify store. These could be:

  • Organic Search: When someone finds you through a search engine without you paying for an ad. It’s like they just stumbled upon your party.
  • Paid Search: This is when you pay to show up in search results. Think of it as putting up billboards for your party.
  • Social Media: Traffic coming from social media platforms. It’s like your party pics going viral.
  • Referrals: When another website links to your store. It’s like your neighbor telling everyone how awesome your party is.
  • Direct Traffic: When someone types in your URL directly. These are the VIPs who knew where the party was at without needing directions.

Conversion Rates: The Plot Twist

Now, here’s the kicker. Not all traffic sources are going to have the same conversion rates. It’s like how some people come to your party just for the snacks, while others are there to dance till dawn.

For example, maybe the traffic from your social media is just browsing, but the folks who find you through organic search are ready to whip out their credit cards. Knowing this, you might decide to invest more in SEO to boost that organic traffic.

The Power Couple

When you start looking at your conversion rates alongside your traffic sources, that’s when the magic happens. It’s like suddenly seeing in 3D. You can pinpoint exactly which channels are bringing in the big bucks and which ones might need a little TLC.

For Shopify store owners, this is gold. Shopify has a treasure trove of data, and understanding how your traffic sources affect your conversion rates can help you navigate that data like a pro.

The Paths to Your Treasure

We’ve already established that traffic sources are the routes people take to get to your store. But how do you actually see this in action? Enter Google Analytics. It’s like the map that shows you all the paths people are taking to find your treasure (your Shopify store, obviously).

Google Analytics: Your Trusty Sidekick

Google Analytics is the sidekick you didn’t know you needed. It’s got all the gadgets and tools to help you figure out where your traffic is coming from and what it’s doing once it gets to your site.

Setting Up the Stage

First things first, you need to have Google Analytics set up for your Shopify store. If you haven’t done this yet, get on it! It’s like trying to solve a mystery without a magnifying glass.
You can read about setting up Google Analytics 4 for your Shopify store here.

The Traffic Acquisition Report

Google Analytics has this nifty feature called the Traffic Acquisition Report. This report is designed to help you understand where your website visitors are coming from. It shows where new and returning users originate, and it’s different from the User Acquisition Report, which only shows where new users come from.

To view this report, follow these steps:

  1. Sign in to Google Analytics.
  2. From the left menu, select Reports.
  3. On the left, select Acquisition > Traffic acquisition.

Traffic Source Dimensions

The Traffic Acquisition Report provides cross-channel traffic source dimensions. These dimensions give you information across organic and paid traffic sources, Google-paid sources, third-party paid sources, buying platforms (like Google Ads), and publisher or inventory sources (like Google Search).

Diving Deeper: Conversion Rates by Traffic Source

Now, here’s where it gets juicy. You can actually see data for a specific traffic source. Want to know how your organic Google Search traffic is doing? Just search for “google / organic” in the search bar above the table and press Enter.

Why This Matters

Knowing your conversion rates by traffic source is like knowing which guests at your party are likely to bring the best housewarming gifts. It helps you focus your energy and resources on the channels that are actually driving conversions.

For example, if you see that your traffic from Facebook is high but the conversion rate is low, maybe it’s time to rethink your strategy. On the other hand, if your referral traffic is bringing in the big bucks, you might want to invest more in partnerships and collaborations.

The Takeaway

Conversion rates and traffic sources are the dynamic duo that can help you solve the mystery of your Shopify store’s performance. With Google Analytics as your trusty sidekick, you can uncover the paths your visitors are taking and optimize your store to make sure they don’t leave empty-handed.

Remember, knowledge is power. The more you know about your traffic and conversion rates, the better equipped you are to make data-driven decisions that can take your Shopify store to the next level.

Wrapping it Up

Alright, we’ve scratched the surface of conversion rates. It’s not rocket science, but it’s not a walk in the park either. It’s about knowing who’s into your store and who’s not, and then doing something about it.

Stay tuned, because we’re just getting started. In the next posts, we’ll dive into how to analyze your conversion rate, optimize your Shopify store, and make your e-commerce dreams come true.

And hey, if you’re thinking “I need some help with this,” don’t hesitate to reach out to our CRO experts. We eat conversion rates for breakfast.

Why you should optimise your Shopify store with us

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  • Over 100 e-commerce clients in the UK, Germany and the US
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