It’s critical to monitor your performance when running an online store to see how your business is going because they are quantitative measurements. eCommerce metrics are a key component to help you figure out how much individuals usually order at once, how often your website visitors make purchases, and even how much it costs to gain a new customer.
There are a variety of eCommerce key performance indicators (KPIs) that can help you gain a bird’s-eye view of your business’s success. We’ll go through the top 15 eCommerce metrics your store should monitor and where you can find them.
What are eCommerce metrics and key performance indicators (KPIs)?
Ecommerce metrics and KPIs are vital data and analytics that may be used to determine a company’s overall success. What is your current customer count? How frequently do customers return? Are customers abandoning their online shopping carts? Keep an eye on fundamental eCommerce KPIs to find out all of this and more.
While each company may have different priorities when it comes to KPIs. There are a total of 15 that every eCommerce business should be aware of.
What ate the 15 key eCommerce metrics?
You probably have a comprehensive dashboard with each of these crucial indicators after witnessing the benefits of having a complete understanding of your eCommerce data.
The conversion rate of sales
The number of persons that made a purchase out of the total number of people who visited your website is your conversion rate (CVR). The formula is as follows:
CVR = (Number of Purchases / Number of Sessions) x 100
However, you can monitor your online store conversion rate directly inside your Shopify analytics dashboard, which makes things much easier.
Users may also see their whole conversion funnel on Shopify because consumers occasionally start shopping and forget or decide not to complete the transaction. The percentage of people who add a product to their cart is higher than the number of people who actually click Checkout. Knowing the complete scope of your sales funnel might assist you in determining whether or not your checkout procedure is producing problems. Your conversion rate should stay the same or improve over time. If you see significant losses, it may be time to examine to ensure your website is still operational.
Average Order value
Your average order value (AOV) is the average amount clients spend on your online store at one time. Follow this formula to calculate:
AOV = Total Revenue / Number of Orders
Your AOV is an important indicator to track and estimate the revenue and set realistic new customer goals.
Customer lifetime value
Customer lifetime value (CLV or CLTV) is the total revenue generated by a single customer over the course of their lifetime. This differs depending on the industry and product. Use the following formula to compute CLV:
CLV = Average Purchase Value x Number of Times Customer Will Buy Each Year x Average Customer Relationship Length (in Years).
Knowing how much a customer is worth to your company helps you to figure out how much you can spend on customer acquisition while still making a profit. It can also assist you in determining which goods are most important to your bottom line and how to change your marketing plan to encourage more people to buy them.
Customer acquisition costs
Your customer acquisition costs (CAC) are the average costs of acquiring a new client which are calculated with:
CAC = Marketing Spend / Number of New Customers
Make sure you monitor this measure on a frequent basis to guarantee it doesn’t surpass your CLV or go any closer than you’d like.
Shopping cart abandonment rate
There will always be some customers who do not complete their transaction, no matter how good your conversion rate is. This process is referred to as Shopping cart abandonment. You should keep a watch on your entire shopping cart abandonment rate because it can indicate future checkout issues. Use the following formula to calculate your shopping cart abandonment rate:
Shopping Cart Abandonment Rate = (# of Completed Purchases / # of Shopping Carts Created) x 100
If your shopping cart abandonment rate is high, it’s time to start looking into possible problems. Because this indicates that there may be issues in the checkout process preventing customers from completing their transactions.
Returning customer rate
The amount of customers who have made multiple purchases from your store is known as your returning customer rate. Return customers are likely to be between 20% and 30% of the time on average.
Return Customer Rate = (# of Return Customers / Total Customers) x 100
Repeat purchases indicate that you are doing an excellent job. So, if you’re having trouble increasing your return customer rate, look at your total client experience to see if there’s anything you can improve.
The amount of people who visited your website and then left without taking any action is known as your bounce rate. In Google Analytics, under Audience > Overview, you can find your bounce rate. Make sure you have an easy-to-navigate website with an appealing design to lower the bounce rate.
Net promoter score (NPS)
Your net promoter score (NPS) is a metric that gauges total customer happiness and loyalty. This indicator is calculated by polling your customers at the checkout with a single question: “How likely are you to suggest us to a friend or family member on a scale of 1–10?”.
- Customers who gave a 9–10 rating are known as promoters.
- Customers who gave a rating of 7–8 are considered passive.
- Customers who give a rating of 6 or less are considered detractors.
Then, to get your net promoter score, apply the formula below:
NPS = Net Promoter Score – Net Detractor Score
Your click-through rate (CTR) is the percentage of people who visit your website after clicking on an email campaign, ad, or social media post. Use the following formula to compute the click-through rate:
CTR = (Number of Clicks / Number of Views/Impressions) x 100
Store sessions by traffic source
The number of visitors to your website and how they got there are displayed in your online store sessions by traffic source report. The following are the most common traffic sources:
- Visitors: The users that came to your site after clicking on a link in a search result.
- Direct: Visitors who came to your website by putting it into their browser’s address bar.
- Social Media Visitors: Visitors who arrived at your website after clicking through from a social media platform.
- Email: Visitors who arrived at your website after opening an email newsletter.
These statistics will help you determine which marketing channels are the most popular for your company and which may require some attention.
Store sessions by device type.
Shopify statistics reveal your store visitors based on the device they’re using to access your website, similar to the above stat. Mobile, desktop, and tablet are the most common device types. You’ll want to pay attention to how well your mobile responsiveness performs if you have a lot of users viewing your website via mobile. Having a mobile-friendly website can significantly boost your mobile sales.
Store sessions by location
This displays your consumers’ most popular areas, allowing you to tailor your marketing and product offerings to their preferences.
Top products by units sold
Your Shopify analytics dashboard also shows the top products by units sold. This indicator informs you which of your items are the most popular, allowing you to plan ahead and arrange inventory or create new ones.
Inventory snapshot at month’s conclusion
The month-end inventory snapshot displays the quantity of each product variant in stock at the end of the month. This will give you the overall value of your Shopify inventory.
Average daily inventory sold
The average inventory sold per day is a unique eCommerce metric in your Shopify dashboard that displays the number of products sold each day per product variant.
The significance of eCommerce metrics for your company
There are three important reasons why you should review your business analytics at least once a month. They are: assist you in tracking growth and performance, estimating future inventory needs, and determining customer engagement.
- Recognize performance
First and foremost, analyzing your eCommerce sales is critical to determine overall growth and performance. And it requires more than just counting how many sales you make each day to do this.
- Shopify dashboard
You can tell if your business is growing by looking at indicators like sales over time, total sales, store visits, and more. If it doesn’t do what you want, you may need to change your eCommerce marketing plan, make sure your checkout procedure is user-friendly, or redesign your eCommerce site to improve the customer experience.
Tracking the performance of your online store is essential for determining whether something in your marketing or sales strategy allows you to adjust and adapt in the future. Tracking performance gives you a lot of power because it allows you to immediately detect and fix problems, saving you time and money.
- Enhance forecasting
You may easily enhance your total sales forecasting by paying attention to your analytics on the products customers are buying. Examine popular products to determine what you need to create/order more and to obtain a sense of purchasing trends. You’ll be able to determine which months or seasons are busier than others, giving you more time to plan sales promotions and campaigns for those months.
- Recognize website engagement
Your eCommerce analytics can help you learn more about how visitors engage with your website. How frequently do customers convert? What are the most popular product pages? How much website traffic do you get on a regular basis?
Paying attention to your Shopify and Google Analytics accounts can also assist you in determining how visitors explore your site. This might help you figure out if your website’s navigation makes sense, or if you need to make some changes to the process.
You can take more detailed steps as you become more comfortable understanding your business via the lens of these indicators. Please contact our Shopify Experts if you require any Shopify Development or Marketing assistance.