In the past few
decades with the rapid changes in technologies, electronic commerce has taken a
significant place in the business sectors. Having an online store or at least
an informative landing page has become essential for companies in order to keep
up with the progress.
Since 1995, Internet
users have witnessed a surge of rapid expansion of B2C e-commerce activities.
Purchasing via the Internet is one of the most rapidly growing forms of
shopping with sales growth rates that outpace buying through traditional
retailing. Accordingly, attracting new customers and retaining existing
customers through a website is vital to the success of B2C (Kuan et al.,
In order for companies
to retain customers and expands its profit they need to know everything about
their visitors. Web analytics tools – software that analyzes the behavior of
site visitors – offer the details about what, when, from where, and why
visitors come to your site. The goal of monitoring companies’ web analytics is
to make improvements to both your promotional initiatives and your Web site
Web analytics tools
have many terms to describe the visitor behavior on a web site. These terms
are: After-click tracking (ACT), Click through rate (CTR), Conversion, Entry
page, Exit page, navigation, number of sessions and visit duration. (Sostre and LeClaire, 2007)
services are getting popular due to their convenience, affordability and time
and place independence. While all efforts of e-commerce have concentrated on
increasing the traffic and attracting more and more new visitors, the
conversion rate figure has stayed in the shadow. Relatively recently e-business
realized the actual importance of the conversion rate (Miikkulainen et al., 2017).
Conversion rate may be
defined as the percentage of your site’s traffic that places an order, sends an
inquiry, subscribes to your newsletter, calls you or comes by to visit your
business. It may also be referred to as the percentage of website visitors that
transform into lead sales by providing their contact details by filling out a
web form (Treesinthuros, 2012).
1.1 Problem statement
While businesses have
turned to adopt the e-commerce as an essential move towards gaining competitive
advantage, there is a need of measuring the outcome of e-commerce.
It is through the
website tracking that the website owner can determine which page content seems to
be more relevant to the users. One of the important tracking strategies of
e-commerce websites was on the targeted to be monitored and maintained, which
is the conversion rate (Treesinthuros, 2012).
Conversion rate, defined as the percentage of visits
that result in purchases, are a primary focus of attention for many online
retailers. With typical conversion rates rarely exceeding 5%, e-commerce
managers are struggling to understand conversion behavior at their sites (Moe and
Fader, 2004). *Should be supported by recent studies”
Check (An empirical study of tracking strategies of
In order for those
businesses to maintain the conversion rate, they need to put their hands on the
factors that have effect on the conversion in order to be monitored, managed
and changed; if needed; to get the expected conversion rate.
* Rephrase *
The objectives of this
understand the impact of the factors on the conversion rate in e-commerce.
build a model to assess the relationship between those factors and conversion
* Here we are not going to build
a model, we are just going to test or validate the relationship*
To assess the relationship
between those factors and conversion rate.
1.3 Research questions
Q1: What are the factors
that have effect on conversion rate in e-commerce?
Q3: What is the
relationship between those factors and conversion rate?
*Should mention design factors motivation*
(Gudigantala et al., 2016) Mentioned that while the increase in the
number of average monthly visitors to the top 200 US e-commerce websites is
impressive, the conversion rate – the percentage of visits to an e-commerce
website that include a purchase transaction – has been stable around 4 per cent
over this period for the top 200 US e-commerce websites. To increase sales, the
e-commerce should not only increase traffic, but should also increase
(Gudigantala et al., 2016) also mentioned that fixed conversion rate
represent a problem for e-commerce. Therefore, the researchers emphasize on the
importance of studying the factors that positively or negatively influence
conversion rate for e-commerce growth.
Moreover, (Treesinthuros, 2012) mentioned that conversion rate should be
constantly improved by developing a more user friendly site and content, deeply
analyzing the website’s traffic sources and reducing the average bounce rates. As
a result, it’s worthwhile to study the factors that may have effect on
conversion rate and to highlight the relationship between these factors and the
This research focuses
on the conversion rate of the online retail websites. It is important to note
that conversion rates exist for other types of websites in the e-commerce area.
For instance, conversion rates for lead generation websites represent the
proportion of visitors that opt-in and give the website the right to contact
them again. Similarly, conversion rate for a support or service website
represents a percentage of total visitors who successfully locate information
such as downloadable FAQs, contact information for correct support personnel,
etc. (Gudigantala et al., 2016).
There are many factors
that could have effects on the conversion rate for e-commerce websites. Legal constraints
and economic constraints are examples of these factors. This research focuses
on the factors that could have effects on conversion rate for online retail
1.6 Significance of the study
This study provides useful
recommendations; on the light of the analysis for the constructed model; for
business managers to focus on the *Design* factors that need to be managed to maintain higher conversion
rate. On the other hand, customers will get services with high quality as
business managers are trying to improve the services they provide to maintain
1.7 Thesis outline
In the first chapter,
the research gives an introduction about the research as overall, describes the
problem, objectives, the research questions, the scope as well as the
significance of the study.
In the second chapter,
an overview of the literature is presented where related work is reviewed and
factors, conceptual model and hypothesis are formulated.
Chapter three presents
the research methodology, operational framework, building survey and collecting
data. Chapter four introduces the data collected, data analysis and the result
of the analysis. Chapter five introduces the discussion.