Keeping an eye on the performance of your business is crucial when running an eCommerce store. eCommerce metrics play a huge role in ensuring the smooth operation of the business.
eCommerce metrics help in understanding things like how many people are visiting your site, how often they are purchasing your items, how many people order at one time, how much it costs to acquire a new customer, etc.
There are various eCommerce KPIs or key performance indicators that provide you with a bird’s-eye view of your business and its performance. In this guide, we are going to cover everything related to metrics, how often you should check them, the benefits of tracking them, and the types of metrics.
What is a Metric?
Let us first cover our basics.
A metric is a quantifiable, defined measurement of a website’s performance that is consistently observed.
As mentioned, there are various eCommerce metrics because running an eCommerce business requires an overview of multiple channels it utilizes for its smooth operations.
Your online store, social media accounts, Google Analytics, etc. are rich data sources that present this quantifiable data that you can analyze and use to switch up your workflow.
What is a KPI?
Key performance indicator or KPIs is important to track. Although all metrics are valuable, tracking a KPI is essential because it is directly related to the growth of the company.
Essentially, they are critical numbers that help you evaluate yourself.
For instance, along with site visits, the number of orders becomes a KPI.
What’s the Difference Between a Metric and an Ecommerce KPI?
It is a simple difference- metrics measure processes and KPIs measure the performance of those processes.
KPIs are also subjective, measuring specific targets/goals you want your business to accomplish.
For example, the average order value is a metric but an AOV of $60 is a KPI.
Download the ebook!
In a hurry? Don’t worry, we got you covered. Download the ebook version of this page and read it anytime!
How to Measure Ecommerce Success
In this case, it is helpful to draft an index that summarizes your performance across your preferred eCommerce marketing channels.
For instance, you can select four metrics that you align with your goals and set your KPIs for each of those metrics. So, if two of your metrics are performing at 90% of your KPI goal and the other two are performing at 100%, then your index would be .95.
Managing the specifics of the activities for your metrics can depend on your team size. And this index is helpful in measuring your performance.
How Often Should I Check My Ecommerce Metrics?
Before we get into our list of metrics that are recommended to track, let us look at how often should you check your eCommerce metrics.
If you ask us, we’d say that it depends. There are some metrics that need to be checked weekly, some bi-weekly, others monthly, and a few quarterly.
You should check some metrics on a weekly basis to ensure that your business is good well. This could include checking social media impressions and engagement, website traffic, etc.
Bi-weekly metrics check is for those that are for larger sample sizes and are less influenced by the variations that can occur within a week’s time.
These metrics include average order value, cart abandonment, cost per acquisition, etc.
Metrics that require a longer data window that is impacted by traffic patterns or marketing patterns should be tracked monthly.
This includes metrics like multichannel engagement, email open rate, reach, and other micro-conversions.
Quarterly metrics are strategic ones that will reflect upon the performance of the long-tail activities implemented for the growth and success of your eCommerce business.
This is different from weekly and bi-weekly metrics that highlight if the business is doing well.
Quarterly metrics that are checked include email click-through, subscription rate, customer lifetime value, etc.
Types of Ecommerce Analytics
As we mentioned, there are different types of eCommerce analytics that you can use to draft your marketing strategy and stay ahead of the curve. Some of the most popular ones, however, are:
When it comes to data analytics, the place to begin is the audience.
Data analytics pertaining to your audience will provide you insights into the demography of your audience like their age, gender, location, occupation, language preferences, etc.
Moreover, audience data also provides you with information regarding their interactive behavior like how they access your store, which device they use, do they use android or iOS, etc.
All of this can give you an idea of how to target your efforts effectively.
Audience data allows business owners to change and alter how they approach shipping options and marketing based on the location. This also helps in covering how your marketing content is presented.
Thus, this data helps regarding your audience can prove to be essential.
Data related to the acquisition of customers is another type of eCommerce analytics that can drive your business forward.
This is valuable because it will help you learn how your visitors found you online and how they ended up visiting your website.
Using this acquisition date, you can discover more online marketing channels that can bring more visitors to your site and understand which channels are generating the most sales and have good conversion rates.
This can also present you with data that can help you determine which online marketing channels are successful and which ones aren’t working quite as you hoped.
Acquisition data can prove to be helpful to unfold which marketing channels are the most profitable and consecutively, how to focus your resources.
An essential type of data you should track is information regarding the behavior of your consumers.
Now that people are on your website, how do they behave- do they end up buying your products, how many of the visitors bounce out, what is the first page they click on, how long they spend on your website on average- all this data is crucial.
This can help you understand how your website is used at the moment, you can trace a typical journey of a consumer as they interact with your online store.
It could help in understanding the performance of your website like its loading time, crashed or error pages, the layout of a page, etc.
All these can make or break the reputation of your eCommerce business and help you discover parts of your website that you can alter to boost engagement and conversions.
Conversions are very important for an eCommerce business. And its data analytics can help propel your business toward success.
There are generally two questions that pop into your mind when it comes to conversion analytics- when do visitors convert into actual customers and how do they convert into customers?
And these are the questions that you cannot ignore when drafting your marketing strategy.
And once your dwell deeper, you’ll have more questions regarding conversions, like:
- How long does it take for a visitor to convert into a customer?
- Does customer tend to purchase items after visiting your site or do they repeatedly visit before purchasing?
- Do they convert once a year or multiple times?
- Do they repeat purchases?
- How many abandon their carts instead of converting?
Knowing the data to these questions can help you determine an effective marketing strategy, and it can also help plot discounts and deals that will appeal most to your customers.
Paid Marketing Activities
Another key area to consider is paid marketing activities that will help you understand the return on investments you have made for various paid marketing efforts.
It can help you determine how much revenue you have generated from these adverts, whether has there been a profit with these activities, how much revenue has been generated due to pay-per-click ads, your email marketing efforts, etc.
If you do not trace and analyze this properly, you could potentially end up spending more money on efforts that will not be helpful.
Why Do Analytics Matter for Your Ecommerce Store?
After understanding what eCommerce analytics are, you should understand why they are important and why they matter.
Analytics are imperative because they help you make more well-informed and calculated decisions that can generate the best possible results for your eCommerce business.
For an in-depth insight into this point, we are going to look at some of the main benefits of eCommerce analytics.
Benefits of Analytics for eCommerce
Measure the effectiveness of your marketing and sales campaigns
Data analytics enable eCommerce companies to measure how their marketing campaigns are performing, their successes, and areas of improvement- helping in the drafting of an informed, holistic marketing campaign.
Evaluate the trends or patterns in data so you can forecast accurately
They give you the power to understand the performance of your business and help predicts its future performance.
This forecasting can help in figuring out your sales goals, hiring goals, and even business goals to ensure the overall growth and success of your eCommerce business.
Optimize pricing, up-sell, and inventory performance
eCommerce analytics is beneficial as it can provide a microscopic view into what drives the pricing for each consumer segment.
This insight can be used to discover the best price point at the product level to help you earn optimal revenue.
Use customer data to personalize individual experiences
It is imperative to understand how customers interact with your business and what type of content, channels, and format appeal and resonate with them.
eCommerce data analytics can help in optimally presenting your product and improve the quality of the purchase journey your customers are on.
Inform your strategy with data-driven insights
Another main benefit is that eCommerce can help you create a data-driven strategy.
Since data analytics provides you with great insight into everything related to the performance of your business and even the industry as a whole, it can help you understand and determine the current market trends that you can leverage and risks that you can avoid.
Thus, it can help you establish a stronger strategy for your business based on data insights.
Understanding Customer Stages
These are the most important metrics for you to ensure that your eCommerce store is operating smoothly and is successful:
- Email click-through-rate
- Cost per acquisition (CPA)
- Organic acquisition traffic
- Social media engagement
- Micro to macro conversion rates
- Average order value (AOV)
- Sales conversion rates
- Customer Retention rate
- Customer lifetime value (CLV)
- Repeat customer rate
- Refund and return rate
- Ecommerce churn rate
- Net promoter score (NPS)
- Subscription rate
- Program participation rate
Product discovery metrics
These are the elementary metrics that will help you measure the activities you have set in place to create awareness for your brand and its discovery:
Impressions are the number of times your content or ad is shown to someone. Impressions can occur through paid ads on third-party sites, social media platforms, search results, etc.
You need to remember that an impression is not a click.
Impression metrics are available on any platform you share your content on like Google paid ads, Instagram, Facebook, Pinterest, and also third-party platforms.
Impressions are a controllable metric since they are based on the budget you’ve allocated for the activities.
Reach is the total number of followers and subscribers you have- essentially the sum of everyone who will see your content.
This could be those who are your email subscribers, loyalty program members, Instagram followers, etc.
Reach can be improved through proper, consistent campaigns that will encourage subscribers, followers, etc. You need to define your brand and your voice for the campaigns to be effective and improve your reach.
Engagement correlates with your impressions and your reach. It is essentially the intersection of how many of your followers and subscribers (your reach) engage and interact with your content (your impressions).
It is also a combination of acquisition-related and non-acquisition-related activities like click-through rate, likes, shares, comments, etc.
Engagement will improve through continuous activities that promote your product and your brand.
Consideration (or acquisition) metrics
You will only have customers if they visit your site. Once they are aware of your brand, the metrics that measure getting them to your site are important. And there is a myriad of metrics under this category, so we’ll go through a few:
Email click-through rate is essentially how many of your email subscribers have received and opened your mail, click through, and to your site.
You can improve this by designing attractive emails with a good mobile-friendly adaptation, strong copies, and a call to action.
Cost per acquisition (CPA)
It is crucial to understand how much you are paying for acquiring new customers and the way you can do this is by analyzing the numbers under this metric. It could help you realize if your campaigns are giving good results or if the price is too much with very little reward.
As is you’ll need to invest in email campaigns, paid search campaigns, paid ads, and other marketing campaigns to generate and drive traffic. And along with this, you’ll be spending on sales. But if your campaigns cost more and give your less revenue in return, then you are wasting your money and efforts.
Your cost per acquisition can be positively impacted by dividing your campaigns to better target those customers who will respond to the call-to-action.
Organic acquisition traffic
Your goal, in the long run, should be to attract people to your store without having to pay for them.
It is imperative to measure how many of your site visitors land there organically- and this metric is commonly available on analytics platforms.
A great way to improve your organic traffic is by working on your technical SEO to its best potential like good response time, proper tagging, etc. And it should reflect on your off-page SEO as well.
Social media engagement
Social media metrics can help provide a lot of value. And you should track them regularly to ensure your social media engagement KPIs are on track:
- Likes per post:
It is essentially the number of people who have liked your post.
- Shares per post:
It is the number of times your posts have been shared over a given amount of time.
- Comments per post:
Comments are the number of times your customer has commented on your posts.
- Clicks per post:
It measures link click-throughs from your social media posts over a given period of time.
You need to next measure your performance of converting a visitor to a paying customer who adds products to their cart and checks out.
Shopping cart abandonment rate
Shopping cart abandonment measures how many visitors add some items to their cart but leave the store without making a purchase.
It is an important measure as it will help you realize the hitches in the store or the cart process that hinders the purchase during the checkout process.
A different metric, checkout abandonment is a metric that shows how many people leave your site without making a purchase but after they’ve already started the checkout process.
It is important to measure separately from cart abandonment because it can help you identify the issues in the checkout process and rectify them immediately. Or help you understand that abandonments are not because of your checkout process.
Micro-to-macro conversion rates
This is to identify activities of particular importance that warrant measurements. Micro conversions are small activities and macro conversions lead to larger activities.
Similar to abandonment rates, it gives you the opportunity to measure activities that you consider essential for your funnel, like a visitor who clicks on a product detail page or the number of visitors who signs up as your email subscriber.
Average order value (AOV)
The average price your customer pays for the items in their cart when they check out is your average order value.
It should be measured over time to determine its evolution as it relates to the measurement of the effectiveness of marketing efforts.
You can improve your AOV through loyalty programs, by selling add-ons, etc.
Sales conversion rates
Sales conversion rates are the total number of orders/sales divided by the total number of sessions on your site.
It is a critical metric as it helps in understanding how much traffic is required to generate your target sales. You need to understand your conversion rates in a more dissected, microscopic manner. You can analyze them through these key points:
- Conversion rate by channel
- Conversion rate by category of products
- Conversion rate by campaign
You can optimize your sales conversion rate by improving your campaigns- fixing underperforming activities will help boost the rates and generate revenue.
It is a common fact that acquiring a new customer requires a lot more effort and money than retaining existing ones.
Here, retention metrics will help you understand how to improve aspects of your business that can retain customers, like good customer service, repeat purchase campaigns, loyalty programs, and investing in customer satisfaction.
Customer retention rate
It is defined as the percentage of the customers you maintain as customers over a period of time. A higher percentage here means you’re doing a great job at servicing your customers.
When you are calculating this, it is important to remember to remove your new customers from the customer count. Although the new customers are important, this metric just focuses on the ones you are retaining.
Customer lifetime value (CLV)
Customer lifetime value is the total revenue an eCommerce business earns from a single customer over a period of time and taking each of their orders into account.
It is an excellent metric to measure your average customer satisfaction, loyalty, and your brand’s viability.
A high CLV means a good product-market fit, brand loyalty, and recurring revenue from your loyal customers.
It is highly recommended to monitor this metric to help optimize your CLV for steady growth and success.
Repeat customer rate
Repeat customer rate is a critical metric that shows what percentage of your customers have made multiple purchases.
It reflects on how well you have been servicing your customers- what other reason is there for them to come back?
Refund and return rate
Refunds and return rates are a bane to eCommerce businesses. Even a well-performing online store will get canned due to high refunds and returns.
But returns can also be powerful to drive and entice potential customers to click on the “buy now” button. If your visitor knows your business offers free returns or exchanges, it will help alleviate their worries. Therefore, this rate is to your advantage.
Tracking this metric is important as it will help you identify a specific section of your store that is experiencing a high return/refund rate and you can improve its aspects.
Ecommerce churn rate
Churn rate is a metric that tracks the turnover of your customers and measures the number of users lost over a given period of time.
Whatever your churn rate is, it is important to measure and work on countering efforts to provide your customers with satisfaction.
Often overlooked, it is a part of the sales funnel which is also important. These metrics will help you measure the efforts you take to show how you care for your customer.
Net promoter score (NPS)
A net promoter score is how likely your customers would refer you to others. On numeric efforts, the customers will fall into one of three categories:
The more promoters you have, the better your score will be. Your NPS score will benefit from the combination of everything involving your business- from customer quality to product quality to employment experience. Thus, becoming a very valuable tool and metric.
Knowing what percentage of your visitors have opted-in for your email lists is important as it determines what the customers want to hear from you.
By providing a good email communication experience, an easy subscription process, and an attractive call-to-action, you can improve your subscription rate exponentially.
On the other side, check your unsubscribe rate as well. Measuring this can help you understand the problem areas and rectify them.
Program participation rate
eCommerce businesses now offer loyalty programs that the customers sign up for. This metric will help measure the percentage of your total customers who’ve entered loyalty programs.
The higher this percentage is, the more opportunities to treat them with care by making them feel special and positively impacting other metrics like CLV and repeat customer rate.
Ecommerce Analytics Best Practices
Now that you’ve understood the benefits and importance of eCommerce analytics, you will want to implement this properly to ensure success, and here are the ways to do it:
Gather all of your marketing data that is scattered across all platforms and channels
Since your data will be spread and scattered across different platforms and channels, it can be messy so you need to organize all your data together.
It can be overwhelming but you can make a list including these categories:
- Your eCommerce store analytics system
- Email providers
- Google Analytics
- Customer relationship management platforms.
- Social media analytics systems
Using this, you can consolidate your data quickly and easily. You can transfer this data to an Excel sheet, so you don’t have to manually handle them.
Join the dots between your customers and the numbers
Gather all your data, but with purpose. An overview of the number will not help, you need to correlate them with your customers.
Marketing tools will provide an excessive amount of data but without helping you with cross-channel reporting. And looking at data in isolation will lead to you making errors and take wrong decisions.
Your marketing stack will only get bigger, therefore you need to have your data in one place to give you a bigger picture of the behavior of your customers and improve your operations.
Adjust data for seasonality and other trends
It is imperative to adjust your data according to the industry events, trends, seasons, and other changes within the industry.
It is the key to changing and improving your SEO and this can help you look at the bigger picture in a better way.
Keep a close watch over your site’s shopping behavior flow
You can track various key areas for this like transaction sessions, check-out sessions, and add-to-cart sessions.
If you notice a sudden reduction in the flow, it highlights how there is a problem in a process and you need to look into it.
Therefore, track, measure, and analyze this flow properly and carefully.
Track your product categories and individual products over time
It is important to check your marketing and sales tracking efforts. Tracking your product category and individual product performance will help you identify your biggest revenue generators.
Here, you can see which products are performing well and which ones are performing poorly then you expected.
When you look at the sales performance of your products, it helps you dive deeper into understanding which products are your best-performing items and help you determine which products the customers are really interested in and which products need to be improved.
eCommerce analytics functions on the fact- if you don’t measure it, you can’t improve it. Operating a successful eCommerce business store requires you to pay a lot of attention and put in a lot of effort in all aspects of its workflow.
And getting familiar with the eCommerce metrics and eCommerce analytics will help you perform at your full potential and fine-tune your strategies and campaigns to improve your store’s performance and ensure its success.
We hope that this guide has helped you understand everything you need to know about eCommerce metrics and analytics, and how beneficial it is for your business.
Using this data, you can make more informed and intelligent decisions that can drive sales, boost revenue and propel your company towards success.