I've seen a marketing report from Marketing Sherpa that showed the stats in the same range of 1-3%. And this was for the sites that were focused on a particular product and the traffic was very targeted as well (most coming from AdWords etc).

Most people just browse and never reach for their pocketbook.

Of course, the web is almost, but not entirely different from a physical storefront.

If someone enters a Starbucks, it is almost absolutely done with the expressed intent of making a purchase (or chatting with a friend who is making a purchase). Not very many people enter a physical storefront (especially not one that sells coffee) if they don't intend on purchasing something.

With the web, it's really easy to just stumble on something or check something out without having any intentions on purchasing something.

Maybe after a while it will just level itself out - right now the web is like a whole bunch of new niche stores opened up in your neighborhood and you have no idea what any of them are selling.

I wonder what percentage of people enter a department store, or a video games shop, and leave empty handed..

I'm sure it's higher than 1-3%

I think it would depend on where it was, although I really have no clue.

For example, I would expect a video game store in the mall to have a much higher percentage of people not buying anything than an isolated / strip mall store due to the amount of foot traffic that would be entering out of sheer boredom or out of curiosity.

Storefronts in a mall come quite a bit closer to being good as a comparison for stores on the web.

Conversion rate (browsers / buyers) is a function of the level of interest from the browsers.

In markets that I deal with, we can prime a mailing list ahead of a purchase and scale the conversion rate 5%, 10%, 15%.

A useful bit to think about: going from 1% to 2% conversion rate on your site is the same as double your traffic. To many people focus on traffic and not on improving their site.

Please elaborate on the second paragraph.