February 23, 2023

17 Crucial Ecommerce Metrics to Track The Success of Your Online Store

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Goal setting is essential for your ecommerce business, as it helps define your direction and purpose. It aligns employee and stakeholder efforts and provides a benchmark that measures success. Tracking progress, meanwhile, helps identify areas where you excel and areas that require improvement so you can see whether you’re on track or need strategic adjustments. […]

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Rachel Go

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Goal setting is essential for your ecommerce business, as it helps define your direction and purpose. It aligns employee and stakeholder efforts and provides a benchmark that measures success.

Tracking progress, meanwhile, helps identify areas where you excel and areas that require improvement so you can see whether you’re on track or need strategic adjustments.

To track performance properly, however, you need the right metrics.

With so many potential variables to watch, deciding which ones are most prudent for your business can feel overwhelming.

Luckily, we’ll remove the guesswork for you with our list of 17 metrics to measure your success with ease.

Read on to learn about:

#cta-visual-pb#Build a website that checks all your boxes and moreUse Shogun to create a website that boosts your metrics across the board.Start building for free

 

What are KPIs and OKRs?

When discussing business metrics, the most commonly used are key performance indicators (KPIs) and objectives and key results (OKRs).

KPIs let you track specific business aspects—like sales and profit—and gauge your overall performance.

OKRs, on the other hand, involve clearly defined objectives and keeping tabs on your progress toward those desired outcomes. Imagine you want to earn X revenue this year, so you aim for Y monthly to quarterly sales.

You then compare the two figures to see whether your efforts bear fruit.

How ecommerce metrics differ from other industries

Ecommerce has specific KPIs and OKRs that are unlike those of other industries.

Instead of tracking metrics that fit a business model, ecommerce brands focus on ones that quantify online performance. They receive greater emphasis due to:

  • The heavy reliance on digital marketing
  • Access to international markets
  • Success being tied to a brand’s ability to optimize their website and user experience

Due to these and other factors, online stores typically measure click-through rate (CTR), customer engagement, and sales by country, among other metrics.

17 Foundational ecommerce metrics for measuring online success

With that distinction clarified, here are the most typical ecommerce performance metrics—all of which help gauge your online brand’s success.

1. Website traffic

Image: Unsplash

This first metric measures your total number of visitors over a specific time frame.

It reveals website performance, the efficacy of your marketing, and your brand’s overall popularity. There are more specific types as well:

  • Unique visitors: The number of distinct individuals who visit your website over a certain period
  • Page views: The number of pages looked at on a website over a specific time frame
  • Bounce rate: The percentage of visitors who leave your site after viewing only one page

#cta-paragraph-pb#Bounce rate formula: (# of single-page sessions ÷ Total # of sessions) x 100

2. Average time spent on site

Also known as average session duration, this shows how much time visitors spend on your website over a certain period of time.

It quantifies how engaged people are and gauges the quality of your content and user experience.

#cta-paragraph-pb#Time spent on site formula: Average session duration = Total time spent on site ÷ # of sessions

Say your website had 1,000 sessions, and people spent a total of 10,000 seconds on it—your average time spent on the site would be 10 seconds (10,000 ÷ 1,000 = 10).

Tracking this over time helps you spot valuable trends as well.

3. Clickthrough rate

Image: Unsplash

CTR is the ratio between the number of clicks a link or call-to-action (CTA) receives and its amount of views (impressions).

#cta-paragraph-pb# CTR formula: (# of clicks ÷ # of impressions) x 100

This metric provides insight into how well your advertising and CTAs perform. Comparing it to statistics such as conversion rate (which we’ll discuss later) can provide more context.

4. Customer engagement

Engagement measures interactions with your marketing or advertising and varies based on the channel you track:

  • Email open rate: The percentage of people who actually open your emails or newsletters

#cta-paragraph-pb#Customer engagement formula: (# of unique email opens ÷ # of sent emails) x 100

  • Social media engagement: Measured through likes, comments, views, impressions, and social shares, among others

5. Leads generated

Leads are people who express interest in your product or service by providing their contact information or subscribing to your newsletter.

Leads generated, meanwhile, can measure the effectiveness of landing pages, CTAs, and other marketing strategies.

This is highly useful if you have a custom offering or sell high-ticket items where you may need to engage and follow up with a customer before they make a purchase.

6. Conversion rate

Almost 40% of online marketers cite conversion rate as the most important ecommerce metric to track.

It measures the percentage of website visitors who make a purchase or take a desired action (conversion) like signing up for your newsletter or filling out your contact form.

Most ecommerce brands will track multiple conversion metrics simultaneously. Some of these conversions will be directly tied to revenue (like purchases), while others will support top-of- and middle-of-funnel metrics (like email subscriptions).

#cta-paragraph-pb#Conversion rate formula: (# of conversions ÷ # of visitors) x 100.

So, if your online store had 5,000 visitors and 700 conversions, your conversion rate would be 14%.

7. Cart abandonment rate

A sad shopping cart left in the middle of a parking lot
Image: Unsplash

Your shopping cart abandonment rate is the percentage of visitors who add items to their shopping carts but leave your store without completing their purchases.

A high number can indicate issues with your checkout process, pricing, or user experience. One way to lower abandonment rates is really great abandoned cart emails to bring them back.

#cta-paragraph-pb#Cart abandonment rate formula: (# of abandoned carts ÷ # of visitors) x 100

For example, if your website had 2,500 visitors and 200 abandoned their carts, your rate would be 8%.

8. Return rate

This is a straightforward metric measuring the percentage of products or orders customers return.

#cta-paragraph-pb#Return rate formula: (# of returned orders or products ÷ Total # of orders or products sold) x 100

A low return rate, for instance, can indicate excellent quality assurance, fulfillment and delivery, policy communications, and other logistical operations.

9. Net promoter score (NPS)

NPS gives you a concrete measurement of customer loyalty and satisfaction.

It involves asking customers to rate their likelihood of referring your company to others on a scale of 1 to 10. Responses are then broken down into:

  • Detractors: Customers who score you 6 or lower
  • Passives: Those who give a 7 or 8
  • Promoters: Those who rate you a 9 or 10

To compute for NPS, tally the responses, then subtract the percentage of detractors from the percentage of promoters.

#cta-paragraph-pb#NPS formula: % of promoters – % of detractors

Let’s say 50% are promoters, 15% are detractors, and 35% are passives; your resulting NPS would be 50 – 15 = 35.

According to Bain & Company, the creator of NPS, scoring higher than your competitors is a reliable indicator of upcoming growth relative to your market.

10. Customer acquisition cost (CAC)

As the name implies, CAC shows you how much it costs to acquire a new customer, indicating the feasibility of targeting specific segments with your campaigns.

#cta-paragraph-pb# CAC formula: Total cost of sales and marketing efforts ÷ # of new customers acquired during the campaign

This metric is vital for monitoring whether your cost to acquire customers is unsustainable.

If your CAC is more expensive than your total customer lifetime value (covered below), it means you are spending too much to acquire customers who won’t provide enough ROI to justify it.

11. Average order value (AOV)

Image: Unsplash

[alt] A woman carrying plenty of shopping bags, Image: Unsplash

AOV tells you how much customers normally spend on a single order.

#cta-paragraph-pb#AOV formula: Total revenue ÷ Total # of orders

So, if you earned $15,000 from 200 orders in January, your AOV for that month is $75. Brands often use cross-selling, upselling, free shipping thresholds, and other strategies to boost their AOV.

#cta-paragraph-pb#Use Shopify related products suggestions to increase AOV. Learn more.

12. Customer lifetime value (CLV)

CLV represents the total value a customer may bring to your business throughout the course of your relationship.

It can help determine how much you’re willing to spend on customer acquisition and customer retention, or whether you should prioritize specific segments.

There are different ways to calculate it, but the most common approach is below.

#cta-paragraph-pb#CLV formula: Average purchase value x # of purchases per year x Average customer lifetime in years

So, if your average customer lifetime is five years and a customer buys from you once a month, with a typical purchase amounting to $50, their CLV would be: $50 x 12 x 5 = $3,000.

13. Repeat customer rate

This shows the portion of your total customers who make repeat purchases.

Repeat customer rate helps identify issues like customer satisfaction since a low number indicates something is preventing people from returning.

#cta-paragraph-pb#Repeat customer rate formula: (Total # of repeat customers ÷ Total # of customers) x 100

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14. Customer retention rate

Relatedly, your retention rate measures the percentage of customers who continue to make purchases over a specific time frame.

It indicates how well you maintain a loyal customer base, and high numbers indicate success.

#cta-paragraph-pb#Customer retention rate formula: [(# of customers at the end of the period – # of new customers during the period) ÷ # of customers at the start of the period)] x 100

Let’s say your business had 100 customers at the beginning of February, then acquired 20 throughout the month, and ended it with 90 still active.

Your customer retention rate would be: [(90 – 20) ÷ 100] x 100 = 70%.

15. Revenue or sales by channel

Use this to find which portion of your total revenue or ecommerce sales is generated through a specific marketing or sales channel, such as your website, social media, email marketing, or search engine ads.

#cta-paragraph-pb#Revenue by channel formula: (Revenue generated by a specific channel ÷ Total revenue) x 100

Let’s say, out of your $30,000 for March, social media earned you $12,000—that means it netted 40% that month’s revenue.

16. Gross margin

This simply measures how much money you make per product sold.

First, you’ll need to find your net sales: Gross sales – Returns, allowances, and discounts. Then, plug that number into the formula below.

#cta-paragraph-pb#Gross margin formula: [(Net sales – Cost of goods sold) ÷ Net sales] x 100.

Imagine you had $3,000 in sales but gave away $300 in discounts while goods cost you $1,200.

Your gross margin would be: [($2,700 – $1,200) ÷ $2,700] x 100 = 55.56%.

By implementing smart retail pricing strategies, you can maintain a healthy profit margin while keeping your customers happy.

17. Return on investment (ROI)

ROI is the ratio between the amount of money earned and spent.

It has many applications, like measuring your gains from marketing, advertising, specific products, and the like.

In the most basic form, your ROI calculation is below.

#cta-paragraph-pb#ROI formula: (Profit ÷ Investment) x 100

So if you invest $1000 in a blog that brings in $2000 of sales, your ROI would be (2000 ÷ 1000) x 100 = 200%. In other words, you’ve doubled your investment.

How to determine the best ecommerce metrics for your store

Knowing what the above calculations do is only the start.

You also have to decide what ecommerce metrics to track, but it differs based on your goals and the customer journey stage you are measuring.

Image: Shogun

Stage 1: Awareness

At this entry point, the customer initially learns of your products or services through channels like search engines, social media, or advertising.

You can track their performance with:

  • Customer engagement
  • Leads generated
  • CTR

Stage 2: Interest and desire

After you capture a customer’s interest, they’ll typically research your offering more by visiting your ecommerce store, reading your content, looking at reviews, or comparing prices.

They may have also developed a desire to purchase from you while gauging your product’s value and whether it meets their needs.

They could also subscribe to your newsletter or leave their contact information. Here, you use:

  • Website traffic
  • Average time on site
  • Conversion rate

This is a crucial part of the customer journey for your brand, testing the effectiveness of your store pages to compel visitors to take action instead of bounce.

Stage 3: Action

Here, your customer takes action, such as adding items to their shopping cart, entering their shipping and payment information, then completing the transaction.

At this stage, you should measure:

  • Conversion rate
  • Cart abandonment rate

Stage 4: Delivery

Image: Unsplash

Next, your customer will expect to receive their order promptly and efficiently.

This is the time to follow up and ensure they’re satisfied with their purchase. It’s your opportunity to gauge metrics such as:

  • NPS
  • CAC
  • Return rate

Stage 5: Post-purchase and retention

The customer’s journey doesn’t end yet, though.

After they’ve completed a purchase, you can encourage them to come back by providing superb post-purchase experiences and customer service.

A repeat customer is a clear indicator of success, so you should quantify:

  • Repeat customer rate
  • Customer retention rate
  • AOV
  • CLV

Ecommerce metrics FAQs

We’ve discussed the ins and outs of ecommerce metrics.

However, in case you’re still uncertain about them, here are the answers to some frequently asked questions.

What are the key KPIs for ecommerce?

Key ecommerce KPIs vary based on your company’s specific goals and objectives. However, commonly used ones include:

  • Conversion rate
  • Customer lifetime value
  • Return on investment

How do I measure ecommerce success?

Ecommerce success encompasses more than profitability alone and should be measured at various customer journey stages so you gauge the overall experience.

For example, high bounce rates can indicate problems with your website or content.

Low cart abandonment rates, meanwhile, suggest a seamless checkout process and user experience.

How can I track customer interactions on my online store?

You can track customer interactions using in-depth reporting and analytics tools.

Many options integrate with your online store and other platforms, as well as provide real-time performance information.

Which metrics should I use to measure the effectiveness of marketing campaigns?

The following metrics are especially helpful in measuring the efficacy of your marketing campaigns:

  • Customer engagement
  • CTR
  • Website traffic
  • Conversion rate

They cover various stages of the buyer’s journey and show how well you guide customers further along.

How do I use analytics to identify areas for improvement?

  1. Define your business goals and objectives.
  2. Identify the right KPIs. For instance, looking at engagement, CTR, and traffic can help you optimize your marketing for conversions.
  3. Spot trends and behaviors. Low numbers could mean your audience is rejecting your marketing; high ones mean you’re doing well.
  4. Modify your strategy. Once you find problems and correct them, capitalize on what works.

5 Recommended tools to track your metrics

Having thrown all that information at you, here are some tools for hassle-free monitoring of your ecommerce metrics.

Shopify Analytics

Shopify’s dashboard has a built-in analytics feature that reveals detailed data and insights about your store’s performance.

It tracks your website traffic, conversion rate, and revenue, as well as provides comprehensive information about customer behavior and marketing effectiveness.

BigCommerce Ecommerce Analytics

Ecommerce Analytics is another built in-feature, this time for BigCommerce’s dashboard.

Its reports cover a multitude of metrics, break down sales by channel and product, and identify your most effective campaigns.

Google Analytics

This web analytics service from Google provides insights about website traffic, audience demographics, and acquisition sources.

It also tracks user behavior, your most popular pages, and which ones have the highest conversion rates. It’s a must-have addition to your Shopify, BigCommerce, or Adobe Commerce store.

Google Analytics even includes customizable data visualization tools.

Adobe Analytics

Adobe’s web analytics and marketing measurement software boasts customizable and flexible reporting options that cover a wide range of ecommerce metrics.

It lets you track your performance across devices and platforms while providing a real-time view of customer behavior.

Matomo

An open-source web analytics software, Matomo offers customizable reports, the ability to create custom segments, and advanced data visualization capabilities.

Besides the essentials for tracking ecommerce metrics, it has powerful data privacy controls and security as well.

Monitor key ecommerce metrics to gauge your success

Tracking the right metrics can steer your company toward growth and avoid business pitfalls.

The right ones will pinpoint facets that need improvement as well for smooth operations. They help you stay on course, providing an in-depth look at areas such as:

  • The performance of specific online channels
  • How well audiences respond to your marketing and advertising
  • The value customers bring to your business

Before you start monitoring them, though, be sure to set concrete goals, use metrics appropriate for each customer journey stage, and maximize available analytics tools.

Then, tweak your approach based on your findings, and you’ll begin to see positive changes in your ecommerce business.

 

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