How Online Retailers Can Close Their Massive Conversion Gap

Key Takeaways:

  • Ecommerce has grown, but it hardly ever converts at the rate of brick and mortar stores.
  • Offering expert sales assistance online is one way retailers can close this conversion gap.
  • By deploying Virtual Product Advisors, online retailers can both improve performance and generate troves of first-party data that they’re uniquely positioned to benefit from.

The Full Story:

Ecommerce has come a long way. Trapped for more than a decade as a single-digit contributor to retail sales, ecommerce finally surpassed 11% US retail sales contribution in Q3 2019. With ecommerce now touching every type of consumer and industry, all kinds of businesses can look to it as a source of growth.

For established online retailers, however, this doesn’t mean that you should simply gird yourself to rake in cash. Growth industries breed competition, entrepreneurship and insurgency. Online retail is even more challenging when you consider that Amazon and Wal-Mart account for more than 40% of the sector in the US, and 66% of consumers typically start their retail searches on Amazon before going anywhere else. 

Growth verticals aren’t immune to this either. For instance, skincare retailers have all experienced growth, and yet Amazon has seen the most incremental benefit of anybody else. How can any retailer that doesn’t do “from A to Z” – at the lowest possible price – stand out? It comes down to a few basic things: making more of the traffic you get today, knowing how to personalize your way to more sales, and build data that offers unique benefits to your retail efforts while offering an experience that’s second to none.

Even large specialty retailers lose out on growth because of Amazon. Online retailers need to better differentiate themselves to counter the trend. Source: GartnerL2

Online Retailers Are Primed to Mine the “Rest of the Iceberg”

90% of an iceberg is typically below the surface. While you could say that the ecommerce sales we see today are just the proverbial “tip of the iceberg”, there’s another iceberg within ecommerce that gets far less attention: the gap between site visits, add-to-carts and conversions that every online retailer experiences.

The average add-to-cart rate is just under 11%. Retailers also average conversion rates under 3% – something that’s relatively high in the ecommerce landscape. While they spend endless dollars, time, resources and ideas to generate traffic and engagement on their sites, 89% of users don’t take any step beyond evaluating products, and almost 80% of those that do don’t bother actually making a purchase. 

Cart abandonment may be a fact of life, but it’s hardly a reason to not take bold steps to improve. The average retail store converts anywhere between 20 and 40% of its visitors. So only 70% of consumers leave a store without buying anything – far less than the 98% of online shoppers that do so. If ecommerce players could close even a sliver of that gap, you’d imagine ecommerce would make up a majority of retail sales overnight.

Online retailers devote an inordinate amount of resources to generating traffic, and while the most expensive sources can generate higher conversion rates, these hardly compare to traditional retail expectations. Source: SmartInsights.

Why does this gap exist? When we consider the difference between brick-and-mortar and ecommerce stores, there are certainly a few advantages (and underlying costs) that enable a higher conversion rate. Consumers may be more prone to buy when they can try things on, compare bags with their friends or explore new offerings. However, your ecommerce store can close the conversion gap by incorporating one experience we so easily tend to forget: helping consumers make better choices. 

Personalizing Your Experience with A Virtual Product Advisor

Personalization, whether it’s of products, content or marketing messages, is often seen as one of the best ways to optimize consumer choices. However, today’s forms of personalization are based primarily on inference and don’t speak directly to consumer needs. In order to personalize experiences in a more accurate, satisfying way, you need to start asking consumers the right questions – ones that speak to their real wants and needs, while also automatically including the ability to fulfill those desires. 

This is why Virtual Product Advisors – powered by conversational AI – are one solution that’s uniquely equipped to personalize online retail experiences in a more effective way. These advisors enable consumers to get guidance, advice and recommendations directly from your ecommerce website. They actively talk to consumers, discover their needs and can make recommendations from among hundreds of the SKUs you might offer through your ecommerce store.

Virtual Product Advisors enable users to share their needs and concerns, get recommendations and find the very best products for them. This kind of help while shopping consistently leaves consumers more satisfied and encourages them to purchase more.

This is an active sales process, similar to the kind of service you’d get in any retail store. This process enables consumers to have an easier time choosing and having confidence in the purchases available to them, and most consumers report the experience as quick, easy, fun, friendly and informative as a result. 

As it happens, this fully automated process also drives 35% higher average revenue per user compared to a traditional website experience. Online retailers finally have the opportunity to close the conversion gap they have with physical stores – all while gaining access to fully compliant first-party consumer data that gives retailers an advantage few would pass up.

Virtual Product Advisors don’t stop their work when a chat is done. As your users continue to browse your site, they can better identify products that are right for them in a personalized and transparent way.

Why First-Party Data Benefits Retailers Most of All

While transactional data is sometimes considered the holy grail for many ecommerce marketing and personalization efforts, it can’t be your only source of insight. If less than 3% of consumers convert, you’re leaving a treasure trove of pre-transactional data on the table.

Many retailers are already addressing this by the study of click paths, site engagement, product searches and more to divine what products individual consumers may be most likely to buy. However, without knowing what consumers actually need, these amount to little more than stabs in the dark.

Current forms of personalization can be effective, but they’re also difficult to execute – primarily because they don’t actually get to know the consumers they target. Source: eMarketer.

This is where Virtual Product Advisors give you an advantage, particularly over brands and other retailers who aren’t getting firsthand knowledge of their consumer needs. When you consider all the many brands, products and solutions you offer – along with all the many new offerings you may promote in a given year – you have an endless number of opportunities to make new recommendations, target follow up messages and leverage more personal, relevant insights on your consumers. 

You could be an electronics retailer with a consumer who is constantly looking for ways to upgrade their home entertainment center. Maybe you’re a health & beauty retailer and your consumer struggles with acne and dry skin, or a jewelry retailer whose consumer is always looking for items that complement their collection or style profile. 

In all of these circumstance, having people disclose the nature of these needs to you gives you a direct path to promote to them year-round – not just during sales seasons or when enthusiasm is high. For retailers in verticals like these, Virtual Product Advisors can provide a winning edge that other solutions simply can’t match.


You may be considering how to better personalize your online retail presence in ways consumers will love. You may also simply be looking to drive higher conversion both now and in the long term. Virtual Product Advisors can enable you to do just those things, but also something deliver something that consumers have been longing for from retailers: a reliable, thoughtful experience – without so much of the spying, creeping and guessing that they’ve grown so used to online.

Contact Automat to learn more about how you can incorporate Virtual Product Advisors to drive growth and simplify customer purchase decisions