How do you measure success for your eCommerce store? Through eCommerce KPIs! While success might mean many different things for you and your business, it’s crucial to rely on e-commerce metrics to get a good understanding of where your store’s at and how it’s performing.
Your store’s KPIs, also known as Key Performance Indicators, are metrics that help you understand how your eCommerce store is doing. In some ways, they act as milestones that you can use to grow and improve your store.
If you don’t understand what eCommerce KPIs to watch out for or why they’re important, your online store could suffer as a result.
What are eCommerce KPIs? Key Performance Indicators for eCommerce
Key Performance Indicators are metrics used to measure success while achieving goals and objectives relevant to your business. Pulling data from quantifiable metrics, these performance indicators track your store’s and business’s performance with accurate, tangible data. In other words, e-Commerce KPIs are not based on subjective opinion.
Even if your cash flow is positive and you feel your store is doing well, it’s impossible to know until you start tracking your KPIs.
For eCommerce or otherwise, KPIs are split up into four primary categories by the measurement they track. These categories include:
If you’re not using any eCommerce KPIs, it becomes almost impossible to gauge your work’s impact on your business’s success. You might feel good about your business, but data doesn’t lie!
How to Measure Success in eCommerce?
When choosing how to use eCommerce KPIs, there are a few essential factors that you should keep in mind.
- You need to analyze the trends and patterns in your data, not just the data itself.
- Data needs to be tracked over time, not check on intermittently
- KPIs don’t solve your problems or help you succeed, but they can point you in the right direction
Your store won’t be an overnight success just because you start using eCommerce KPIs. For an eCommerce KPI to be effective, the data needs to be tracked, analyzed and acted upon. The only thing eCommerce KPIs measure is how well your business or store is performing in a particular area over a certain period of time.
Regardless of which KPIs you decide to use for your store, it’s important to remember that:
- An eCommerce KPI needs to align with a business goal or outcome
- An eCommerce KPI needs to measure performance over time
- An eCommerce KPI needs to measure reasonable metrics that you can attain
- An eCommerce KPI data set needs to be applied to your goals
In other words, if you’re just tracking KPIs to track KPIs, then you’re not going to be able to enact any meaningful changes to your business. There are hundreds of different KPIs, ranging from extremely broad to very focused. It’s up to you and your business acumen to decide which performance indicators make the most sense to measure, track and leverage.
Types of Key Performance Indicators for eCommerce
Although there may be hundreds of different KPIs, they more or less fall into one of these five categories.
- Customer Service
- Project Management
KPIs for any of these categories can be:
- Qualitative; measuring something’s quality instead of its quantity (e.g. user reviews
- Quantitative; measuring something’s quantity instead of its quality (e.g. quarterly sales)
- Predictive; forecasting a result, change or movement (e.g. products sold after a sale)
- Historic; measuring important events in the past (e.g. products sold during holidays)
Best eCommerce KPIs
With the preliminary information out of the way, it’s time to dive into the best eCommerce KPIs for your business. The total number of actionable KPIs most likely numbers in the hundreds, and this is by no means an exhaustive list. However, if you’re just getting started with your online store, these shop metrics are a good start!
Today, many CRM and e-commerce platforms offer data filtration and segmentation of sales data. You can measure your total number of sales across months, weeks, days, or even by the hour.
Average Market Basket
Also known as the ‘average order size’ or ‘average order value,’ this indicator lets you know how much a customer will spend on a single order.
Sales Conversion Rate
Your sales conversion rate is a percentage that indicates how many visitors to your store or page end up making a purchase. The higher the conversion rate, the more likely visitors will make a purchase.
Customer Lifetime Value
The customer lifetime value is a metric used to measure a customer’s lifetime worth to your store. It shows you the total amount they spend at your store.
You can use the following formula to calculate CLV:
(Customer revenue/year) x (number of years as a customer) – (Customer Acquisition Cost + Cost to Serve) = CLV
Also known as ‘average profit margin,’ this measures your profit margin over a certain period of time.
Shopping Cart Abandonment Rate
This metric tells you how many visitors are shopping at your store but not checking out. Many factors can influence your cart abandonment. Slow delivery times and high-cost of shipping are two of the most prominent ones. Research shows that high shipping costs and long slow delivery are the top reasons for cart abandonment.
If you’re losing customers at the checkout page, consider offering them the affordable convenience of same-day delivery with Cantec Couriers!
Cost Per Acquisition
Depending on where you do your marketing, getting new customers can be expensive. This indicator measures how much it costs to acquire one new customer.
Like overall sales, you can segment overall eCommerce website traffic into extremely granular levels: the more site traffic, the more visitors to your store. By leveraging this KPI, you can optimize your marketing campaigns and site to target specific platforms, users, or demographics.
Your bounce rate reflects the number of users that leave after visiting one page. If this metric is high, you might want to look into upgrading your website to make it more engaging.
Percentage of Returning Customers
How many customers are returning ones as opposed to new ones? Alone, this metric might not mean much, but this data could help measure how well a particular marketing campaign is performing when combined with your conversion rate.
Time on Site
How long do your customers spend on your website before leaving? To keep your customers engaged, you want to funnel more traffic towards your product pages, blogs, and landers. If they’re not spending enough time browsing your site, you might want to see why this may be the case. Improving your product description copy might just fix the issue!
Drive Success with eCommerce KPIs
Whether you’re an up-and-coming eCommerce store or an established one, eCommerce performance indicators are precious for continuing your successes. Your conversion rate, average order value and cart abandonment rate are critical indicators of success and can help you increase your store’s total number of sales.
If your store is getting a lot of traffic, increasing its total number of new visitors and lowering its bounce rate but still losing the customer at the check-out page, the reason could be due to no fault on your own, but delivery costs.
The online commerce space is competitive. Competing against large retailers who can offer two-day or even same-day shipping is complex. If it costs a customer excessive time and money to get what they want, they might turn elsewhere to get it faster and cheaper.
The best way to capture every customer and increase your total number of sales is by offering the same thing big-box retailers are offering – affordably priced, same-day delivery.
With Cantec Couriers, it has never been easier to let your customers enjoy their products the same day they order them.
With one simple plugin, you can let your customers decide when, where and how fast they’d like to receive their order on the checkout page. In addition to speedy delivery, they’ll also be able to track their delivery with real-time status updates until it’s in their hands.
Don’t miss out on any more sales – experience the Cantec Couriers difference today!