20+ eCommerce Metrics Every Store Must Track Frequently
20+ eCommerce Metrics Every Store Must Track Frequently
When operating an online store, tracking different important eCommerce metrics can provide you a bird's-eye view of your business’s effectiveness and your customer profitability.
Yet, there are various metrics with unique roles in helping you understand and monitor your business. So, which one should you track?
Don’t worry! In this blog, we will go over the 20+ top eCommerce metrics that your store needs to monitor, along with tips on how to improve each of them. Keep scrolling!
20+ eCommerce Metrics to Track
Ecommerce metrics are quantitative data that is used to find insights into your business’s operation and efficiency or your customers behaviors.
Although each business may have different priorities on which eCommerce metrics to track, let’s take a look at the list of more than 20 top eCommerce metrics that any eCommerce brand has to monitor.
Conversion Metrics
The conversion metrics look at how well you do at turning visitors to your website into actual paying customers. They are a key performance indicator (KPI) that assesses if your online marketing plan has the expected conversion effect.
The actual conversion rate will change depending on the kind of business you run.
#1. Sales conversion rate
The sales conversion rate gauges how well your sales staff is doing at turning leads into new customers. A good sales conversion rate is from 2% to 5%.
The sales conversion rate enables you to determine the proportion of leads or visitors who complete a purchase in comparison to the overall lead or visitor count over a given period of time.
Your conversion rate should be consistent over time or go up eventually.
If you see abnormal dips, this could be attributed to 2 reasons. First, your customers find it hard or confusing to find the information they need. So even when you have tons of traffic, none of them converts into sales. Second, your offer is too pricey or of insufficient value to your target market. Another key reason is that customers don’t trust you enough.
Tips to Improve Sales Conversion Rate:
- Changing your offer to be more irresistible can persuade more website visitors to make purchases
- Experimenting with different call-to-action buttons
- Making your website mobile-friendly and responsive
- Offering live chat support
- Adding product reviews to your store to build trust
#2. Average order value
The average order value (AOV) of your online store is how much a customer spends there. It must be monitored throughout time to see how it changes. According to Littledata, if your average order value is more than $274, you will be in the top 20% of all the stores they benchmark, and if it is more than $534, you will be in the top 10%.
Knowing this measurement is crucial when discussing how to gauge the success of marketing campaigns. It can aid in income estimation and goal-setting for prospective customers.
There are some major variables that lower your AOV: No discount deals available, the total weight of the shopping cart, minimum use of selling add-ons, and no social proof that reduces customer trust.
Tips to improve Average Order Value:
- Running upselling or cross-selling campaigns
- Bundling products or creating packages
- Setting a minimum purchase amount for "free shipping" and other bonuses like free gifts, discounts, etc.
- Implementing loyalty programs
- Adding add-ons like gift-wrapping for an extra $1 or name-carving for $3
#3. Shopping cart abandonment rate
The percentage of online buyers who add products to a virtual shopping cart but then remove them before making a purchase is known as the shopping cart abandonment rate.
In other words, it expresses the percentage of interested potential customers who leave empty-handed in relation to the overall number of carts created.
This metric is necessary for determining if there are issues in the site or cart process before proceeding to the checkout stage.
The average rate of shopping cart abandonment, based on numerous eCommerce surveys, is 68.81%, with the most recent study revealing a rate of 74.52%.
There are numerous potential causes for the rising cart abandonment rate, with the following being the most frequent ones: Unexpected charges or expensive shipping fees, unclear return and refund policy, long or confusing checkout process, absence of appealing payment options, security issues with payments, etc.
Tips to Improve Shopping Cart Abandonment Rate:
- Being open and honest about all expenses
- Providing guest checkout options
- Offering diverse payment methods
- Enhancing page load speeds
#4. Checkout cart abandonment rate
The checkout cart abandonment rate is an important metric that determines the number of visitors who exit your website without placing an order, but only after they start the checkout process.
Although this metric is comparable to shopping cart abandonment, it's crucial to measure them independently to see whether the checkout procedure is the primary reason for abandonments or whether there is a different issue altogether.
Tips to improve Checkout Cart Abandonment Rate:
- Offering expeditious checkout
- Leveraging user-friendly cart management, such as persistent pages, urgent messaging, cart savings, etc.
Profit Metrics
Profit metrics are important eCommerce metrics to track that you need to assess your company's capacity to earn income (profit) in relation to sales, assets on the balance sheet, operating expenses, and shareholders' equity during a given time period.
#5. Net profit
Net profit is the amount that is left over after all other costs have been deducted. This includes one-time charges (legal settlements), taxes, and interest expenses. These expenses can vary greatly from year to year.
An average net profit margin for eCommerce businesses is 10%, so anything above this is a good thing for you.
Net profit is significant because it reveals the company's overall financial health, establishes shareholder value, points out areas in which the business may cut costs or boost revenue, along with attracting investors if you have a strong net profit.
Tips to Improve Net Profit:
- Optimizing your ad spends
- Focusing more on high-margin products and profitable customers
- Reducing utilities
- Reducing labor costs
- Lowering operating costs
#6. Gross profit
Gross profit is the amount of money your business has after eliminating all of the costs incurred in producing and offering the goods or services.
Although there is no official evidence to support this, it is generally accepted that manufacturers, retailers, and producers would be satisfied with a gross profit margin of 50% to 70%.
This metric aids in measuring your business' capacity to strike a long-term balance between operational effectiveness and revenue growth.
Tips to Improve Gross Profit:
- Streamlining your offer by promoting the most profitable products or best-seller items and removing less profitable or less popular items from your product line
- Renegotiating with your suppliers for better deals
- Upselling to existing customers
- Increasing efficiency and productivity by applying high technology and automation to your business operation
#7. Operating profit
Operating profit is calculated by subtracting expenses from gross profit. Operating expenses include things like rent, wages, insurance, and other necessary operational costs.
An operating profit margin of around 20% is typically seen as good, and one of less than 5% as low.
As operating profit eliminates all additional elements from the computation, it is a very reliable predictor of your company's health. Analyzing your operating profit will allow you to discover how much money your core business activities are generating.
Tips to Improve Operating profit:
- Reducing the cost of goods and services you sell
- Enhancing inventory management by lowering the amount of inventory on hand and increasing turnover
- Cross-selling and upselling extra products to your customers
- Bundling items together at a fairly discounted price
#8. Break-even point
The break-even point is reached when your revenue and costs are equal, leaving no room for profit or loss. Your revenues should cover both your fixed and variable costs if your company has achieved the break-even point.
As a result, it will adjust to reflect any changes in your variable costs. You can figure out the break-even point for a certain product as well.
A break-even analysis might be useful for a variety of reasons. First off, it can assist in revealing costs that you otherwise might not have anticipated.
Additionally, a break-even analysis provides you with concrete data, which is a better starting point for making business decisions. Finally, a break-even analysis will demonstrate the appropriate pricing of your goods from a business perspective.
Be mindful that even when the break-even point is reached, you may still experience the loss. It is due to the fact that your efforts don’t work out as expected.
In fact, your business's financial stability and profitability prospects are better if your break-even point is lower. By lowering your break-even point, you can accelerate the time it takes for your business to become profitable.
Tips to reduce Break-Even Point:
- Working to reduce your fixed expenses (e.g., getting a better storage unit rental rate or cutting your fixed payroll costs)
- Cutting down on your variable running costs, including product and warehouse storage, product return, shipping, and supply costs
Customer Retention Metrics
Customer retention metrics track customer satisfaction throughout the full customer lifecycle and how well your business maintains customers. There are 4 key retention metrics you need to track.
#9. Customer lifetime value
Customer lifetime value (CLV) is the total amount of money your business makes from a single customer over the course of a given time, taking into account all of his/her orders.
A picture of the company's long-term financial viability can be obtained from the CLV metric. High CLV suggests brand loyalty, product-market fit, and recurring income from repeat buyers. If your business wants to see sustainable growth, it is advised that they analyze and maximize CLV.
Tips to Improve Customer Lifetime Value:
- Providing outstanding customer service to bring in a positive customer experience
- Offering loyalty programs to incentivize customers to make repeat purchases and increase their lifetime value
- Encouraging customers to purchase extra products or services through upselling and cross-selling
- Rewarding customers for referrals
#10. Customer acquisition costs
The cost of acquiring new customers is known as the customer acquisition cost (CAC). In other words, it is the total expenses (including all property, equipment, and sales and marketing expenses) of getting a customer to purchase a good or service.
Lowering your CAC is in your company's best interests, especially when it comes to the LTV:CAC ratio. Your business is not working effectively when CAC is high, yet customer lifetime value is low.
Ideally, an LTV to CAC ratio of at least 3:1 is considered to be good. Hence, your business can dramatically boost its revenue by lowering the CAC.
Tips to Reduce Customer Acquisition Cost:
- Allocating your marketing strategies and resources to the right audiences
- Offering an outstanding customer experience to keep them back
- Implementing affiliate programs where your affiliate partners could influence potential customers to engage with your brand
- Utilizing customer relationship management (CRM) solutions with marketing automation to lower the costs for marketing staff
#11. Returning customer rate
The returning customer rate is the proportion of current customers that made two or more purchases in a specific time period. This includes first-time buyers who make their initial purchase before returning to your business shortly thereafter to make another one.
According to Alex Schultz, VP of Growth at Facebook, the majority of eCommerce businesses have 25–30% returning customer rates. However, standards differ from business to business.
This metric demonstrates customer loyalty and the proportion of one-time buyers who become regular customers because they value the services provided by your business or brand due to its customer experience, incentives, new items, and pricing.
Tips to Improve Returning Customer Rate:
- Keeping your communications going by updating your clientele on new exciting deals and product releases.
- Creating customer loyalty programs to incentivize people to keep shopping at your online store
- Rewarding your existing customers to promote your products and bring in new customers from their own network
#12. Churn rate
Churn rate is a measure to monitor the turnover of your customers by counting the number of them who leave over a certain time frame. For annual turnover, a suitable benchmark ranges from 5% to 7%, and for monthly churn, it's around 1%.
Although churn rate is a scary number, it is still one of the important eCommerce metrics to track. You can't make improvement strategies to lower turnover rates if you don't know how many customers are leaving your brand and how that's affecting your revenue.
After finding out the result, you need to make an effort to develop plans that help satisfy your customers and lower your churn rate, no matter what it is.
Tips to Reduce Churn Rate:
- Using churn instances to examine the performance of your customer service and pinpoint problems with the customer experience to make necessary adjustments
- Updating your onboarding strategy for new customers with personalized 1:1 and online customer onboarding and welcome emails
- Publishing instructional material on your blog, social media pages, and video channels to instruct customers how to get the most out of your goods or service
- Requesting customer feedback at critical points during the customer journey and swiftly responding
Product Discovery Metrics
You can assess your plan’s efficiency in promoting awareness and discovery by tracking and analyzing product discovery metrics.
#13. Click-through rate
Click-through rate (CTR) is a ratio that demonstrates how frequently visitors who notice your advertisement or free product listing click it. You can utilize CTR to determine how well your free listings, advertising, and keywords are performing.
The average click-through rate for search is roughly 1.91%, while for display, it is around 0.35%.
A high CTR is a reliable sign that users find your listings and adverts relevant and helpful. The projected CTR for your keyword, which is a factor in Ad Rank, is likewise influenced by CTR. Keep in mind that a decent CTR depends on what you're promoting and which networks you're using.
Tips to improve Click-through rate:
- Using one or two focus keywords in the headline of your PPC ads that speak to the needs and emotions of your audience
- Including a direct and compelling call to action on PPC ads
- Try using trending or popular hashtags in your industry that are relevant to your campaigns
#14. Traffic
The volume of users who visit a website is referred to as website traffic. Visits, also known as "sessions," are a metric to gauge how successfully an online business is able to draw customers.
Generally speaking, website traffic is vital. Your website will have more prospective customers when there are more individuals that visit it. The number of visitors to your website shows how many chances your business has to make a good first impression, provide quality leads, share your brand, and develop partnerships.
Tips to Improve Traffic:
- Being active on social media and interacting with followers through high-quality materials to entice them to visit your website
- Improving your SEO strategy to raise site ranking and draw more visitors
- Using automated email marketing software to encourage contacts to visit your website by sending them deals and discounts
#15. Bounce rate
The percentage of visitors that arrive on a page but leave without taking any action is known as the bounce rate. For eCommerce and retail websites, the average bounce rate is from 20% to 45%.
This metric is necessary for evaluating user engagement. You want people to visit your page and take action once there. If they don't, it means that your page's content, design, copywriting, or user experience are flawed.
It is always a good idea to have a lower bounce rate, which means your website visitors are not leaving after going through one page and they may click on internal links and read more.
Tips to reduce Bounce rate:
- Optimizing your web pages with more interesting, higher quality, and more relevant content
- Putting the important information on top of your pages first
- Using some imagery, bullet points, subheadings, and bolded words together to enhance the readability of your pages
- Avoiding using excessive pop-ups
#16. Time on-site
Time on-site, also referred to as session duration, is the total amount of time that a user spends on your website. 52 seconds is a decent average time on-site benchmark across several industries.
Instead of only concentrating on one page, time on-site is the ideal indicator for assessing how beneficial visitors find your complete website. It reveals important insights into your customer behaviors, including how long they shop around before making a purchase, if they read many articles in your blog section, etc.
Tips to improve Time on-site:
- Including high-quality content
- Using relevant keywords
- Limiting the usage of complex graphics, fonts, or formatting and moving images, embedded videos, or automatically playing music to optimize the page loading time
- Using internal linking to keep your audience engaged for longer
- Adding interactive elements to your websites, like virtual product testing, color swatches, hover effect, animations, and more
Product Metrics
Product metrics are the quantifiable measurements that you collect and assess to understand the success of your products.
#17. Top products by units sold
On your Shopify analytics dashboard, you can view the top products by units sold, which is one of the most vital Shopify metrics. You can prepare for inventory or the production of more products by using this metric to determine which of your products is the most popular.
It is essential that you should consistently focus on your best-selling products with promotional, branding, and manufacturing objectives from a marketing and production standpoint.
Tips to make the best out of Top products by units sold:
- Finding a cheaper supplier or negotiating better prices on your best-sellers
- Bundling a complement to your most profitable products
- Highlighting the popularity of your top products to boost the word-of-mouth
#18. Month-end inventory snapshot
The number of each product variant you had in stock at the end of each month is displayed in the month-end inventory snapshot. This will show you the entire cost of your inventory.
Besides, this helps you better understand your inventory levels, sales patterns, and any inventory inconsistencies.
Tips to improve Month-end inventory snapshot:
- Choosing the suitable inventory management tool that can produce accurate reports and integrate with your eCommerce platform
- Educating your employees about appropriate practices for inventory management
#19. Average inventory sold per day
The number of goods sold daily by product variant is represented by the average inventory sold per day.
To have a comprehensive understanding of your sales operations, calculating this metric is crucial. This might aid your business in forecasting future sales and budgeting expenses.
Additionally, this figure will assist you identify any problems that might be preventing your operations from being effective as well as give you insight into how well daily operations are doing.
Tips to improve Average inventory sold per day:
- Promoting the sale of old stock
- Assessing your pricing strategy and making tactical changes
- Establishing a culture of pre-ordering your products, whether they are newly launched or soon restocked.
Customer Advocacy Metrics
Customer advocacy is the practice of prioritizing the requirements of your customers and attempting to provide them with support that is solution-based through your goods and services.
These metrics will help you understand how satisfied your customers are with your product or service.
#20. Net promoter score
How likely it is that your customers will recommend you to others is what determines your net promoter score (NPS). Customers fit into one of three categories depending on their numeric response.
- Detractors (0 - 6)
- Passives (7 or 8)
- Promoters (9 or 10)
NPS scores vary widely by industry. However, the average NPS score for eCommerce businesses is 6.2, according to Statista.
You can assess your customer service quality using the net promoter score, especially in comparison to their rivals. In addition, it helps your business in measuring and assessing customer loyalty.
Tips to improve Net Promoter score:
- Enhancing communication with potential customers and making them excited about your business
- Asking promoters for their feedback and detractors for how you could improve
- Promoting customer advocacy with personalized interactions and appealing incentives
#21. Subscription rate
In an email marketing campaign, the higher the email subscription rate, the greater the likelihood of conversion to purchase behavior and the greater the effectiveness of the campaign.
Conversely, an email marketing campaign will fail when the amount of unsubscription rate increases and requires you to make adjustments to retain subscribers with their emails.
Knowing the percentage of your visitors who have opted into your email lists is crucial because email marketing is still of high value. This shows that your customers are interested in hearing from you, which is a positive indicator.
Tips to improve Subscription rate:
- Being consistent in messaging
- Avoiding spamming with endless or unnecessary messages
- Offering a streamlined subscription experience
- Including strong calls-to-action
#22. Program participation rate
Program participation rate is a measurement of the number of people who engage with your loyalty programs.
The higher that percentage, the more you can do to treat them with admiration, make them feel unique, and raise many of the other metrics, including CLV and returning customer rate.
Tips to Improve Program participation rate:
- Promoting your loyalty programs to raise customer awareness of the programs
- Providing a detailed overview and explanation of the program to your customers to promote participation
- Rewarding subscriptions and participation
- Setting tangible goals with meaningful benefits to further increase their engagement
Frequently Asked Questions
- What are eCommerce metrics?
Ecommerce metrics are quantitative measurements that can be used to determine things like how much is typically ordered at a time, how frequently people are making purchases from your website, or even how much it costs to acquire a new customer.
- What are some key metrics to track in an eCommerce model?
There are many key metrics that your online business needs to track, as we have discussed above. Yet, Sales conversion rate, Net Profit, AOV, CLV, CAC are those you should pay close attention to.
- How do you measure success in eCommerce?
You can track the 20+ top eCommerce metrics above and break them down to gauge how successful your eCommerce business is.
- What is the most important eCommerce analytics?
Sales conversion analysis is of utmost importance as it is deemed to be the most crucial eCommerce metric, according to over 40% of eCommerce marketers surveyed by Databox.
Conclusion
Building your store, establishing your brand, developing your product, and providing excellent customer service are just a few of the many aspects of running a successful eCommerce business.
Tracking and analyzing the important eCommerce metrics listed above will help you evaluate how successful your business is doing those tasks and point out any areas in which you can fine-tune your strategies to increase the efficiency and profitability of your store.
Discover what proper profit-tracking looks like at trueprofit.io
Irene Leander
Irene Leander is the Content Manager at TrueProfit. With over 5 years of experience in content creation and editorial writing for the eCommerce industry, she aspires to bring stellar value to eCommerce merchants with over-the-top articles.
