eCommerce Metrics You Need to Start Tracking Right Away
eCommerce performance measurements reflect how well your company is performing. Selling online without tracking your eCommerce stats is akin to traveling with your closed eyes. No company can exist if you don't follow your success and compare it over time.
As an online shop, it's easy to get caught up in eCommerce numbers. The sheer amount of potential indicators to track and monitor can be intimidating. However, not all measurements are as relevant as others, and defining the key performance indicators (KPIs) you need to measure will help you improve the success of your online store.
Consistent development in online sales results from tracking performance in various areas of your organization over time. Keeping track of the correct indicators will allow you to enhance conversion rates over time. Any quantitative, regularly specified measurement of website performance is referred to as a metric. Important eCommerce metrics include conversion rate, average order value, cart abandonment rate, and traffic sources.
For valid reasons, the number of eCommerce analytics is lengthy. Google Analytics, social networks, your online store, category pages, webpages, checkout, and shopping carts are all significant data sources that record statistical data, ready for your analysis and trend analysis over time.
Key eCommerce Metrics To Track
As an eCommerce business, tracking key metrics can provide invaluable insights into the health and growth of your online store. By monitoring certain numbers, you can make data-driven decisions to boost conversions, increase average order value, and maximize return on investment.
Here are the most important eCommerce metrics to track consistently:
Conversion Rate
The percentage of website visitors that complete a purchase is referred to as the conversion rate. Monitoring changes in conversion rate helps identify issues turning visitors into paying customers.
Gross Profit Margin
Gross profit margin measures profitability after accounting for product and operating costs. Tracking this shows the actual profitability of item sales.
Average Order Value
The average order value (AOV) metric calculates the typical value of an order on your online store. Coupled with conversion rate, it indicates how much revenue your store generates per visitor.
Cost Per Acquisition
Determining the average cost to acquire a new customer enables you to judge the effectiveness of marketing campaigns and channels.
Checkout Abandonment Rate
The percentage of customers entering the checkout process but failing to complete the transaction is your checkout abandonment rate. Identifying why customers abandon at this late stage is key.
Customer Lifetime Value
Customer lifetime value (CLV) represents the average revenue generated from a customer over their entire relationship with your business. It helps distinguish high-value repeat customers from one-time shoppers.
Return On Advertising Spend
By comparing advertising costs to revenue generated, you can calculate the return on investment. This helps optimize marketing budgets across campaigns and platforms.
Mobile vs. Desktop Metrics
Analyzing key eCommerce metrics by device type provides insights into the optimal customer experience for mobile, desktop, and tablet. Performance indicators can vary across devices.
Using Metrics to Boost Growth
Consistently tracking these key metrics provides data to inform better decisions for your online business. Ensure you have the tools to segment each metric across dimensions like marketing channels, traffic sources, and product categories.
Supplement quantitative metrics with behavioral analytics of how and why customers interact with your eCommerce store. Together, these offer a powerful perspective on optimizing the customer journey for increased conversions and revenue.
Next article: 5 Simple Techniques to Grow Your Online Business and Achieve Success
FAQs
What are the most important eCommerce metrics?
The key eCommerce metrics to track are: conversion rate, gross margin, average order value, cost per acquisition, checkout abandonment, customer lifetime value, return on ad spend, and performance by device type (mobile vs. desktop).
Why track conversion rate?
Monitoring conversion rate helps you identify issues in the customer journey that are preventing visitors from becoming buyers. Improvements can increase revenue.
What does gross margin indicate?
Gross margin shows the profitability of item sales after accounting for product and operating costs. It enables making decisions to improve profitability.
How can average order value be used?
Average order value calculates the typical revenue generated per order. Combined with conversion rate, it shows how much revenue each website visitor produces through purchases.
Why is cost per acquisition important?
Knowing the average cost to acquire a new customer allows you to gauge return on investment from marketing campaigns and channels. Lower acquisition costs can mean higher lifetime value.
When should checkout abandonment rate be reviewed?
A high checkout abandonment rate means many customers are dropping off at the last step before completing a purchase. Identifying why is key to removing obstacles and recovering lost sales.
What does customer lifetime value indicate?
Customer lifetime value represents the average revenue earned from a customer over the entire relationship. It distinguishes high-value repeat customers from one-time shoppers.
How to use return on ad spend?
Comparing advertising costs to sales revenue generated allows optimizing marketing budget allocation to the most efficient platforms and campaigns.
