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E-Commerce conversion funnel: How to analyze and optimize the right way
Funnel Analysis

E-Commerce conversion funnel: How to analyze and optimize the right way

Vimlesh Gautam
 min read
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Recently I watched a movie. The cast was amazing but the plot was off the track.I couldn’t help but felt awful. You don’t want your users to feel the same way right?

You want to give your users a proper direction inside the app for them to make the right decision.

Conversion funnels are the direction you are designing for your app visitor to take the desired action at the end. 

If you want to skip around different sections, here are the topics we will be discussing in this article.

What is a Conversion funnel?

Conversion funnels are the series of steps you want your users to follow through inside the app from becoming aware of your product to taking the desired action at the end.

The action can be anything from signup to Adding to cart and making a purchase. Each step in the funnel is taking your users closer and closer to take that desired action. This is why we call it “the funnels”.

Why do we need a Conversion funnel?

You know the destination and have no idea about how’s and when’s. Don’t you feel lost?

Likewise, you don’t want your users to feel confused on what to do next on the app. You need to guide your users throughout their journey, think about every option they want just to make sure they take that end action without any fuss.

Also, it is not possible to optimize your conversion rates if you have no idea about your conversion funnels.

What is an E-Commerce Conversion funnel?

A business can have any number of conversion funnels depending on the target audience, user journey, the size of the business etc., However a typical E-commerce app funnel has the following stages. (It is important to optimize each stage of the funnel to grow your conversion rates.)

Stages of E-Commerce Conversion funnel

Stages in E-Commerce conversion funnel
Source: E-Commerce conversion funnel stages


This is the stage where you go out and talk about your product everywhere possible to pull in the visitors to your app. You do SEO, write a lot of content to make your audience trust that you are solving the problem. You have to have really good junk of people coming to your app at this stage of the funnel to be able to push them to the further stages. ( That doesn’t mean irrelevant audience).


As the name suggests, people have landed on your app and all you need to do now is to interest them with your products.Make sure you keep your audience engaged at this point of the funnel. Create engaging content, do social media to keep them interested in your products.


This is where the user decides whether to make a purchase or not. He/she should feel that this product solves their problem. Good product images, reviews and optimized CTA elements will do.


This is the final stage you have been working on to reach for. This is where the user takes that desired end action. Most cases, the user makes a purchase. Make sure the checkout flow is smooth, you provide enough payment options for them to have a hassle free experience.

As we have seen what a typical ecommerce funnel looks like, let’s look into some of the interesting ecommerce funnel examples.

Examples of E-Commerce Conversion funnels

Search ad funnels

Search ad funnel in E-commerce
Search ad funnel

The search ad sales funnel looks similar to the paid social media funnels except the fact the traffic is driven through search ads such as google ads leading to the landing page, add to cart and eventually the checkout. In both the cases the Click-through-rate plays an important role in taking the users to the interest stage of the funnel.

Add to cart funnels

Add to cart funnel in E-Commerce
Add to cart funnel

In this example, the end goal is the user adding the products to the cart. However, the previous steps leading to this varies depending on the media from where the leads are being generated.

Paid Social media funnels

Paid social media funnels in E-commerce
Source: Metrilo – Social paid traffic funnel

You will be spending a lot of time and money on social media without even knowing the conversion rate from the campaign. Tracking of this funnel gives a clear picture of how users navigate the funnel from social media to making a purchase.

Here the FB ads falls under the awareness stage of the funnel leading to a landing page which might interest the user. Then the user will add the products to the cart and complete the purchase. We can strategize retargeting on Facebook if the user abandons the cart.

Important KPIs for Conversion funnel optimization

You cannot achieve something when you don’t measure. So, it’s important to set realistic goals and keep a track of them.

Here are few important key metrics to keep in mind throughout the funnel optimization process.

Conversion rate

Say you are introducing an offer for Christmas and again the same for New Year. Without even knowing whether your users are interested or not, you keep pushing it further. Probably you don’t see any difference in the sales. That’s why you should keep track of conversion rates. You get a clear idea of what is working and what isn’t.

Bounce Rate

Bounce rate indicates the number of people leaving your app visiting only one page. This data helps in understanding which stage of the funnel needs to be optimized. Reduce the bounce rate by providing CTA and  page elements that will lead them to the next page.

Shopping Cart abandonment rate

If you see a high drop off after adding products to the cart, then there’s some issue with the check out process. Improve the checkout flow and attract them back with offers and discounts.

Mobile site traffic

Understand how your users are getting to know about your business. Make use of social media, SEO to nail the first stage of the funnel, awareness. If you see high traffic from social media, put in more effort on social media.

How to optimize your E-commerce conversion funnel

As we have now understood how an Ecommerce conversion funnel works, it’s time we dig deep into optimizing the funnels to increase conversions.

You have already created different conversion funnels for your app.

You have no idea where your users are dropping off and what made them do so.

 With Funnel analysis, you can easily find out where your users are dropping. Along with session replays, you get a detailed picture of your user’s action right before they dropped off. This helps in understanding the  reasons behind the drop-off points and optimize the funnels accordingly.

Ideas to optimize your E-Commerce Conversion funnel

  • At whatever stage of the conversion funnel, your user is at, User Experience is the key. How much ever you optimize your SEO to bring in more traffic to the homepage, if your user has an unpleasant experience, there are high chances they drop off. In most cases, they are unlikely to return to the app. Never ignore the UX game.

  • A lot of times, the customer fails to make the purchase, when they don’t find the preferred payment option. Provide them with as many payment options as possible like we saw in the previous example.

  • Never make the steps complicated by asking too many questions or making them fill lengthy forms. This will frustrate the users making them leave the app. Keep it simple.

  • Test, Test, Test. As you already have the data from funnel analysis, change elements, styles that are not working. Test different pages. Guessing never works.

  • Pay attention to every step of the conversion funnel. Track your user’s every interaction around drop off points and create personalized content for them. For instance, if you see a huge number abandoning the cart, send messages with offers and discount codes.

  • Nothing can impact your conversion rates as CTA does. Make sure the CTA is drawing the user’s response and leading them to take the desired action. A/B test your CTA elements using different colors, placing them in different places on the page, and see which works the best.

  • Provide the users with appropriate content at each stage of the funnel.Be it push notifications, E-mail or social media content, make sure it is relatable at the same time not overwhelming for the users.

How to reduce massive drop-outs?

The major dropout in the eCommerce funnel happens just after adding the products to the cart. More than 65% of users abandon the cart and it requires a lot of effort to retarget them with possible marketing strategies.

Here are a few things you can do to reduce cart abandonment to a certain extent.

1.Funnel analysis

This helps in understanding why your users are dropping out and what had exactly happened in the app before they just drop-off. This gives a clear indication of what is working in the app and what not and optimize it for a better user experience.

2. Exit intent popups

Using Exit-Intent popups, you can give offers or discounts on the screen as popup notifications if the user intends to leave the app after adding the products to the cart.

3. Security and Fraud protection

When users try to make a purchase, you don’t want them to feel insecure to complete the checkout process and just drop-off.So,it  is important to make them feel trusted and secured throughout the process. 

Current trends on E-Commerce conversion rates

E-Commerce conversion rates
Source: Current E-Commerce conversion rates

This is the current conversion rate among E-commerce businesses showing about 44% reaching the product page, around 15% adding products to the cart and only 3% actually completing the transaction.

From this data, it is evident that there are a lot of chances to increase the conversion rate by optimizing the funnel stages after add-to-cart especially by improving the checkout process, adding preferred payment methods, and ensuring secure checkout options.

As we have discussed throughout the article, it is not a good practice to jump right into implementing some hacks that might have worked for someone else. Dig deep into the data with funnel analysis, understand your user behavior, and figure out what suits your business. It is not a one-time process. With practice, you will be able to build a conversion funnel for your E-Commerce business that converts like crazy

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