10 Most Important Ecommerce Metrics You Must Track In 2023
Updated on November 14, 2022 in Ecommerce by Nishant Shrimali
Ecommerce Metrics and KPIs are the windows through which we can understand our customers better. Not only does it help us improve their experience, but also helps us identify the areas for improvement.
And to be fair, we can’t regularly monitor each eCommerce metric. There are over 100 of them and going through each one itself will drain a lot of time away.
That is why you must prioritize your eCommerce metrics and KPIs to productively track the growth of your eCommerce.
To assist you in that, I am sharing 10 MOST IMPORTANT Ecommerce Metrics & KPIs to start tracking in 2023.
So without taking any more time, let us go through the list and understand why each one of them is so important for your eCommerce.
10 Ecommerce Metrics & KPIs That You Must Track
Average Order Value (AOV)
Average Order Value = Revenue/Number Of Orders
Average Order Value is an eCommerce metric that tells you about the average amount spent by your every customer every time they place an order.
To increase the average order value of your eCommerce, you’ll have to make your customer buy high-priced products more often or more products in one order.
Some common marketing technique that you can use here is to offer, Buy 2 get 1 free. It is a very important eCommerce metric as it showcases higher trust from your customer towards your eCommerce.
Conversion Rate
Conversion Rate = (Number Of Conversion/Total Number Of Visitors)x100
The conversion rate is an eCommerce metric that shows what percentage of visitors made a purchase and became your customers.
Conversion rate can depend on a lot of factors like site speed, user experience, product presentation, call to action, and more.
Hence to increase your conversion rate, you will have to run a lot of tests from offers, pricing, UI, etc to know what works best for your audience.
One of the proven ways to improve your eCommerce conversion rate using a professional product photo editing service to improve your product presentation.
When making a purchase online, customers are highly dependent on your product images to know about the product.
Professional services like PixelPhant can ensure that your products look their best with a clean background, zero distractions, and professional product retouching.
Bounce Rate
Bounce Rate = (Total visitors who left without interaction/Total number of visitors)x100
Bouse Rate is an eCommerce metric that shows how many of your visitors returned, after visiting just one page on your site.
Here the goal is to engage customers to increase engagement and reduce the bounce rate. The more time they spend on the site, the better it is for eCommerce.
Also, when search engines like Google see people spending more time, they improve the ranking of the page.
To reduce the bounce rate of your eCommerce, ensure that the site loads quickly, all your product images look clean and interactive, and it is easy to navigate to other pages.
Also, ensure that your eCommerce is optimized for all mobile, tablet, and desktop users.
Cart Abandonment Rate
Cart Abandonment Rate = (Completed Purchases/Shopping Cart Created)x100
Cart Abandonment Rate is an eCommerce metric that showcases the percentage of orders that were created but not completed.
In simpler words, it means the customer added the product to their cart to make a purchase but dropped it off without placing the order.
It is one of the most important eCommerce metrics that one should monitor as it might be among the top few reasons why your conversion rate is low.
During checkout, if there were any additional charges (Like previously undisclosed tax, shipping charges, etc.) it affects the customer’s experience negatively.
This could even be due to other factors like page not loading, no guest checkout option, asking too many questions, poor UI, less credibility, and more.
If you see higher cart abandonment, there is an important opportunity for you to work on, find the reason and immediately see a change in conversion rate which was affected by the Cart Abandonment rate.
Cost Per Acquisition
Cost Per Acquisition = (Total Cost/Total Conversion)
Cost per acquisition is an eCommerce metric that tells us about the average cost eCommerce spends to acquire one paying customer.
It tells us how much capital has been invested in making people purchase from your eCommerce.
It also helps during budgeting. It shares how much minimum capital will be required to achieve the set goal of acquiring new visitors who make a purchase.
The goal of cost per acquisition is to reduce overtime and start attracting more customers with minimum capital spending. This is mainly done by building a brand and focusing on creating brand advocates.
That is making people love the experience so much that they recommend it to their friends and family as well.
Customer Lifetime Value
Customer Lifetime Value = Average Purchase Value x Average Purchase Frequency Rate
Customer Lifetime Value is an eCommerce metric that shows the average revenue generated from the customer from the time they made their first order till now.
This is among the most important eCommerce KPIs as it indicates the returning customers, the trust, and the engagement with the brand.
You must also remember that returning customers have lower Customer Acquisition Costs and higher Average Order Value. That means returning customers are the most profitable customer segment.
The goal is to increase the eCommerce customer lifetime value as it reflects trust, engagement, and also higher profitability over time.
Traffic Source
Traffic Source is a quick insight to learn about how the visitors are learning about the eCommerce and visiting the site.
Learning about different traffic source (especially the one that brings the most traffic and one with the highest conversion) help in better focus our resources.
For example, if you observe that most of the traffic is coming through organic searches but the traffic that generates the highest conversion for your eCommerce is Facebook, you can start focusing more on Facebook marketing.
While it is advised to focus on one channel if you are starting, it is also important to diversify your traffic source as you grow. This reduces that dependency and the risk of losing all traffic if something goes wrong.
New Vs Returning Customer
Keeping track of new and returning customers is important for eCommerce as it showcases what you are doing right or wrong to acquire customers.
For example, if you see that you have more new customers and fewer returning customers, that means people who bought from you may have not liked to experience post-purchase.
(The returning customer matrics can also depend on the product life cycle. That is how frequently people buy that product. Cars have a longer life cycle than candles. Hence returning customers for cars will be low compared to an eCommerce selling candles)
Also, if you see that you have returning customers but fewer new customers, that means people are liking the whole experience, but not many people are aware of your brand/product or aren’t able to reach your eCommerce.
The idol situation is to have a balance of both the new and the returning costumes.
Site Speed
Site speed is an eCommerce metric that shows how fast your site loads when visitors click on your link. It is also one of the most important SEO factors that determine the ranking of your site in the search results.
The faster your site loads on various devices (preferably mobile) the better experience it provides to your customers.
In addition to that, you shall also ensure that the site is loading fast on all browsers, Operating software, and your target countries.
Most of the time eCommerce load is slow and has a high bounce rate, high cart abandonment rate, and lower traffic. Hence make sure your site speed is low.
Customer Satisfaction Survey/Feedback
It there is one of the most important metrics that you must look at is Customer Satisfaction Feedback. This metric is directly requested from the customers and gives you a direct understanding of what customers’ experience was and what are they looking for.
You can set up the survey in whatever manner you wish. For example, you can go ahead with 2 surveys. One right after placing the order, next when the customer has received the order.
One will show the customer experience with the eCommerce and the other will do it for the products. This will give you a much better understanding of what customers are facing and areas that you can improve.
Give the option to rate the experience and product out of five. It is a great way to get quick feedback without forcing customers to write down their whole experience in words.
Bonus Read
All 10 eCommerce metrics are insights that showcase customer experience in one way or another. And that’s what running and scaling an eCommerce is mostly about. It is about understanding what customers need and finding out the solution to improve it.
I hope you use these eCommerce metrics in the best way and use them to scale your eCommerce.
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