Skip to content

Essential E-commerce Funnel Analysis Methods You Need to Know

  • November 10, 2023


🖐🏻What is a Funnel?

A “funnel chart” refers to a chart that breaks down the process from when a consumer visits a website to the final step. In e-commerce, the funnel is typically formed by the stages of visit > product browsing> purchase attempt> purchase> repurchase.


The Importance of Funnel Analysis in E-commerce

What metrics are essential for increasing sales sitewide? There are various metrics include website visitors, average order value, and more. However, “the purchase conversion rate,” representing the ratio of customers visiting the website to those converting into purchases, is crucial.


Funnel analysis is necessary to increase the purchase conversion rate. You can identify the stages with high drop-off rates by analyzing the funnel metrics from visit to product view, purchase attempt, and purchase completion, Once you identify these states, you can explore improvement methods. With repeated reasonable improvement attempts, you can increase revenue even with lower number of visits.


Three key metrics to check in funnel analysis

1. Check the purchase conversion rate compared to visits. 

The purchase conversion rate compared to visits is an appropriate funnel analysis metric to diagnose the current state of an online store. Use trend of conversion rates and its market comparison charts at each stage of the funnel to assess the store's status. If you're a Datarize user, you can utilize the ranking improvement feature to take action for low-performing stages.


2. Check daily time series metrics. 

If the conversion rate has decreased compared to the previous day, check if it's a continuous downward trend or a temporary phenomenon due to factors such as the day of the week or the end of an event. Also, investigate website redesigns or policy changes. Based on the cause, you can review campaigns or strategize to attract customers.


3.  Check the conversion rate compared to the previous week.

Visit-to-purchase conversion rates tend to fluctuate less than the conversion rate of each stage. Analyze the funnel compared to the previous week, examine any variations in both final purchase conversion rate and conversion rate of each stage. This will help you plan actions to improve your funner more precisely.



Methods to increase the purchase conversion rate through funnel analysis 

Once you have examined those three metrics in the funnel chart, let me share how to improve the conversion rate at each stage. Before diving into the details, identify the location with the lowest conversion rate in your online store's funnel chart. Apply solutions directly to address the root causes and improve the conversion rate.


1️⃣ When the product view conversion rate is low

(1) Product display issue

  • Potential cause: Customers may not have found attractive products when they visit the site, resulting in a low product view rate.
  • Solution:

① Check the click-through rate compared to product impression to examine product display.

② Improve the conversion rate using personalized product recommendations.

(2) Content issue

  • Potential cause: Inconsistent messaging between ad creatives and landing pages, leading to immediate bounce.
  • Solution:

① Use the engaged session ratio to confirm content-related issues.

② Set the ad landing page to the product detail page.


2️⃣ When the purchase attempt conversion rate is low:

(1) Issues with the product detail page

  • Potential cause: Customers may need help finding the desired information on the product detail page, leading to churning without purchasing.
  • Solution:

① Add product descriptions or enhance visibility through design changes within the product detail page.

(2) Price issue:

  • Potential Issue: The product is priced too high
  • Solution:

① Execute campaigns to promote available coupons or loyalty points. 

(3) Review issue:

  • Potential issue:  Not enough or negative reviews on the products leading to churning
  • Solution:

① Implement campaigns that promote writing reviews.


3️⃣ When the purchase completion conversion rate is low: 

(1) Membership registration process issue:

  • Potential cause: customers must register for a membership, resulting in cart abandonment.
  • Solution:

① Introduce social login for a simplified registration processes.

② Display banners that highlight the benefits of membership registration.

(2) Order form page issue:

  • Potential cause: Limited payment methods and complicated order forms leading to failed purchase attempts and higher churn rates.
  • Solution:

① Provide various payment methods or simplify the payment process.

(3) Benefits issue:

  • Potential cause: Customers abandon carts as they believe the amount to reach the free shipping needs to be lowered.
  • Solution:

①Set a reasonable amount threshold considering the customer's average spending.

② Run on-site banner campaigns to promote available benefits.

③ Send product recommendation messages via email, sms, or other means to users who abandoned the order process.


In conclusion, funnel analysis is the first step towards developing strategies to increase the purchase conversion rate. By using the funnel, you can accurately identify where customers encounter difficulties. Utilize quantitative data from the funnel to understand customer concerns and address underlying issues.

Experience a conversionsurge for a month free!