When running any online store, it’s important to keep track of your performance to see how the business is doing, and what’s working and what isn’t. Ecommerce metrics are measurements that help you to find out information such as how many products people are ordering, how many visitors you have, how long they’re staying on your site and how much it is costing to acquire new customers. All of these things come hand in hand with website traffic and therefore conversions, ensuring that you know what your website needs and what your consumers are engaging well with.
Whether you’re a furniture wholesaler or an online clothing boutique, here are some of the key metrics you should be keeping an eye on when it comes to tracking and improving an e-commerce site.
What are e-commerce metrics and KPIs?
Before investing in software and tracking systems, you’ll need to know exactly what metrics and KPIs are when it comes to e-commerce. These measurements are a type of data and analytics that helps to gauge overall business success and strategy planning. You can find out details such as the number of customers visiting your site, cart abandonment figures, bounce rates and customer retention. Through these findings, you can then apply improvements to specific areas of a website or products, improve marketing or SEO efforts and save efforts on those things that may not be working.
How to determine which metrics matter to your business
Many businesses will go full throttle when it comes to measuring e-commerce metrics, however, not all of these measurements will be right for your site and could end up offering very little benefit.
When deciding on the metric you want to focus on, it’s always a good idea to identify the key performance indicators that consistently have the greatest impact on business objectives and outcomes. But what is the difference between a KPI and a metric? Whilst a metric will track the progress of any business process, a KPI is a lot more personal and will show how effective your strategies are at achieving certain goals and targets.
Here are some key questions to ask yourself when choosing e-commerce metrics:
- If this metric changed, how much would it impact the business?
- By focusing on this metric, will goals and targets be achieved?
- Will this metric help to improve other metrics?
Ecommerce metrics you need to track
Although every business benefits from different findings, here are the key e-commerce metrics that all companies should know about!
Conversion Rate
The conversion rate is crafted by dividing the number of conversions by the total number of visitors who were given the opportunity to take action. Conversion rates can vary drastically depending on your industry and the nature of your products and should always be looked at with a more targeted approach.
For example, a luxury jewellery store will naturally have a lower conversion rate compared to a fast-fashion outlet due to the amount of products and visitors.
Read more on conversion rate optimisation.
Average order value
AOV is a measure of how much your customers typically spend on a single order. This is calculated by dividing the total revenue for a period by the total number of orders completed during that same time. By tracking this, you can find new and improved ways to drive more value from the traffic you are receiving, focusing on areas such as cross-selling, upselling and bundling.
Customer lifetime value
The higher the CLV, the less you need to spend on acquiring new customers as this means you have successfully developed long-lasting relationships with existing ones. Acquiring new customers costs money, and it also means that your previous ones may not have been completely satisfied with the service or goods.
Customer retention rate
If your business is losing customers as quickly as acquiring them, there is something going wrong. Although at first you might be excited by the fact you have new customers, losing past ones has a reflection on your services, products and customer relationship strategy. Repeat customers are crucial for a constant flow of business, positive feedback, recommendations and loyalty and they also reduce the costs needed for new marketing materials and strategies.
Cart abandonment rate
Potential buyers can abandon their order for a variety of reasons, some of which can inspire new features on your website. Some of the reasons for cart abandonment include unexpected fees, high shipping costs, no guest check-out option, payment security, poor user experience and slow loading. If your customers are ditching their carts, this gives a clear indication of where improvements are needed, whether this be to lower shopping costs, offer bundles at checkout or keep the process to one page.
Read more on ways to reduce car abandonment.
ROAS ( return on ad spend )
By regularly tracking your ROAS, you can evaluate the usefulness of your advertising and indicate how much revenue will be generated in the future. ROAS will help to check that you’re not spending more than you’re making when it comes to advertising and marketing, helping your business to budget and change things when needed.
Conclusion
Finding the right metrics to focus on will lead to a collection of ideas, inspiration and business growth. As you grow more confident with your business and goals, you can take steps into more detailed, precise numbers when needed, adventuring into more in-depth metrics when necessary.
If you have questions about your business that your core metrics can’t answer, our team of e-commerce experts are just a call away. Whether you need some help with your conversions or just have some general questions, get in touch with the Imaginaire team and we’ll be more than happy to help.
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