The e-commerce sites at the top of their game are successful because they understand and obsess over metrics! Data drives every marketing decision, every promotion and site adjustment. Without studying your e-commerce metrics you won’t know what’s working and what’s not, nor will you know how to improve it.
There are numerous metrics you can track on your e-commerce store, including Return On Investment (ROI), which we have left out of this list as it is deserving of its own article.
However, we have identified some of the other key metrics to pay attention to. These metrics will give you the valuable insights you need to boost your store’s performance.
- Conversion Rate
- Website Traffic
- Customer Lifetime Value (CLV)
- Average Order Value (AOV)
- Percentage of Returning Customers
- Email opt-in Rate
- Return On Ad Spend (ROAS)
- Revenue by Traffic Source
- Shopping Cart Abandonment Rate
9 Key Metrics for your E-commerce Store
1. Conversion Rate
The Conversion Rate is the most fundamental of all the e-commerce metrics. It tells you how many of those who visit your site actually decide to buy. Obviously, we want to make sure this number is as high as possible. On average, the conversation rate of an e-commerce store in the US is between 2% and 3%. These are quite general rates with some stores focusing on one product versus a store with many. You may also be a digital business focusing more on content than product. What is your experience with conversion rates?
If you want to know your conversion rate, divide your number of sales by the number of visitors and multiply that figure by 100.
To boost your conversion rate, you can try:
- Improving your page speed
- Optimizing product listing
- Using high quality images
- Utilizing trust signals
- Following our conversion rate optimization articles
2. Website Traffic
Once you have your site optimized for conversion, you can focus on growing the amount of people coming to your website.
To boost your website traffic, you can try:
- Optimize your site for search engines
- Share your products on social media
- Grow your email list
- Run paid CPC ads
3. Customer Lifetime Value (CLV)
The CLV metric is one which tells you how much you can earn from a typical customer over the course of their lifetime. Knowing this figure will help you make decisions about how much to spend on acquiring a typical customer and how much to put into retaining them. You can calculate your CLV figure here.
To increase your Customer Lifetime Value, you can do a few things, but ultimately, the most effective thing you can do is increase your Average Order Value.
4. Average Order Value (AOV)
Tracking this metric on your e-commerce store will tell you the average value of each purchase which has taken place on your website.
To calculate yours, just divide the sum of your revenue by the number of carts.
To drive this metric up, you can try:
- Bundling items together and offering a slight discount
- Recommending items often bought together
- Offering shipping discounts on higher total purchases
5. Percentage of Returning Customers
This metric is incredibly important because returning customers have a 60-70% conversion rate versus what already mentioned experts put at 2 – 3% as an average. Returning customers already know and trust your brand and therefore more likely to buy again and at higher values for each purchase. A returning customer is also more likely to recommend your store to a friend.
To calculate your Percentage of Returning Customers divide the number of return customers by the total number of customers and multiply by 100.
6. Email Opt-in Rate
According to SmartInsights, email marketing pulls in higher conversions than social media, direct traffic and search. This is why we have the Email Opt-in Rate listed as one of the key metrics for your e-commerce store! For every $1 dollar you spend on email marketing, you stand to generate $32 in ROI.
One way to add a visitor to your email list would be to offer them something of value in return for their contact details. This could be a discount code or exclusive deal for first-time visitors.
7. Return On Ad Spend (ROAS)
The Return On Ad Spend metric will tell you how much you have earned on a particular marketing channel.
To calculate the ROAS, you simply divide your Revenue from a marketing channel by the Total Spend on that channel.
This metric will tell you at the most fundamental level whether a certain marketing channel is performing at a level which will generate profit.
8. Revenue by Traffic Source
It would benefit your site to pay attention to which traffic source has the highest conversion rates. With this information, you will know which channel to increase spend on and boost conversion overall.
Even though a particular channel may perform better for you, avoid putting all of your marketing budget into one channel. Best practice is to still have multiple campaigns with multiple channels, so that you can keep track of any changes in their performance and adjust your strategy accordingly.
In addition, it is worth noting that external influence may also impact the performance of a particular channel. Therefore, diversification is essential for a sustainable business.
9. Shopping Cart Abandonment Rate
This e-commerce metric will tell you how many of your visitors are the equivalent of real-life window shoppers. According to Brilliance, in 2019, the global average cart abandonment rate was 77.73%. This rate could vary in different markets and on different devices.
It is also important to remember that the reasons behind cart abandonment are worth investigating. They might not necessarily be a bad thing. A user who takes action and engages with our website is more valuable to us than a lurker.
As your store grows, the greater data points you will have. With this you will be able to get more significant insights and know what decisions to make to ultimately benefit your business. If you are a smaller company, it would be a good idea to focus on non-rate metrics, such as Average Order Value (AOV) and Customer Lifetime Value (CLV).
We would love to hear from you. Which of these metrics do you think you should focus more on? Let us know in the comments below.