The determinants of conversion rates in SME e-commerce websites.

Abstract

© 2017 Web retailers invest significant resources to improve the proportion of website visitors that make a purchase, also known as the conversion rate. Improving this rate is particularly important to SMEs that have traditionally lagged behind larger firms as they have found it difficult to justify the significant investment involved in website development against the historical low returns associated with an online sales channel. Identifying methods that increase conversion rates reduces these perceived barriers and increases effective SME participation in the growing e-commerce sector. This paper uses 1184 observations from 6 SME websites to identify and analyse the factors, or combination of factors, that improve conversion rates. This is achieved through a process of exploratory regression analysis to select the most relevant determinants and Qualitative Comparative Analysis (QCA) to offer more ‘fine-grained’ detail on the conditions where conversion rates improve. Our findings suggest that a key factor that improves the conversion rate is a strategy that focuses upon either quality or promotion and avoids mixing such attributes within the web site offer.