20 Ecommerce KPIs To Know and Track

Running an eCommerce business, whether a small online store or a large eCommerce website, can be equally rewarding and challenging. 

You must make the right decisions at every stage to stand out among online businesses. The best way to do this is to track and monitor the most important eCommerce key performance indicators (KPIs) and metrics.

The following sections provide valuable insights on 20 eCommerce KPIs necessary for any eCommerce site. By utilising them, you can improve your online store’s performance, understand more about your customer relationships, and ultimately enhance customer satisfaction and boost sales.

Sales Conversion Rate

The sales conversion rate is the first eCommerce metric that reveals how well your online business is performing.

It represents the total number of online sales (or orders) customers have made or placed with your eCommerce business divided by the total number of sessions (or mobile site traffic) your eCommerce store has received. 

Sales conversion rate is one of the most important eCommerce metrics. It demonstrates how much traffic is needed to achieve sales goals. 

To best understand your sales conversion rate, it is highly recommended that you analyse conversions based on different channels, like SEO, email marketing, AdWords, and more. In addition, divide your conversions according to the category of products, as it may be natural for some to have higher conversions than others. 

Another best practice is to split conversion rates based on the type of marketing campaigns you run, like paid advertising or influencer marketing.

Additionally, optimising your online checkout system – by offering multiple payment options, ensuring security, and providing a mobile-friendly experience – can directly influence the success of these campaigns by improving the overall user experience and encouraging more customers to complete their purchases.

Average Order Value (AOV)

One important eCommerce performance indicator is the average order value (AOV). This metric reflects how much a customer spends per purchase. You can calculate it by dividing your total revenue by the number of orders.

Tracking your AOV is vital for measuring your store’s performance over time. Regular analysis of monthly, quarterly, and annual AOV trends helps you identify shifts and make data-driven decisions to boost sales.

Perhaps there are specific shifts based on seasonality or promotional periods. Considering this can allow you to make adjustments to increase your AOV.

In most cases, eCommerce businesses monitor average order value automatically via their eCommerce platforms. However, you can also rely on Google Analytics for your needed data.

Suppose you feel that your AOV is low and needs improvement. You can test different strategies, like creating loyalty programs, add-ons, and more.

Customer Lifetime Value (CLV)

Unlike AOV, which shows the average spend per purchase, the customer lifetime value (CLV) demonstrates the average amount a shopper is forecasted to spend with your business throughout the entire relationship. 

Having a high customer lifetime value ultimately means that you have attracted high paying customers, positively influencing your brand’s financial stability in the long term. 

Naturally, customer lifetime value directly reflects customer loyalty, customer experience, and overall – how successfully your brand meets customer expectations. It can also show whether you’ve managed to form relationships with the right purchasers, who are willing to spend more with your business regularly.

An important rule of thumb is that seeing a CLV close to your AOV means that your repeat business is lower. This can be a clear sign that you need to improve customer service quality, prices, marketing, and other vital areas.

Cart Abandonment Rate

Another essential key performance indicator for online retailers is the shopping cart abandonment rate.

Attracting customers online is challenging in the dynamic and highly aggressive digital landscape. Seeing your almost-clients leave you just when they’re about to complete their purchase is one of the most undesired scenarios.

In summary, the cart abandonment rate reveals the percentage of buyers who abandon their carts without making a purchase. 

On average,the online shopping cart abandonment rate worldwide is 70.19%. However, it will be different for each brand and can also be influenced by the devices your shoppers use, their location, the industry you’re in, the type of products you sell, and more. 

Overall, the cart abandonment rate shows customer engagement, but perhaps another part of your strategy is missing or weak. Maybe a paying customer is frustrated with a slow website or hasn’t received enough encouragement or information to make the purchase.

You can significantly improve your business performance by analysing the core reasons for cart abandonment and take some steps to reduce the cart abandonment rate.

Customer Acquisition Cost (CAC)

Customer acquisition costs (CAC) represents the amount spent to gain a new customer.

CAC depends on ad and marketing spend. You can calculate it by dividing the total campaign cost by the number of new customers acquired. A lower CAC indicates better efficiency.

Standard customer acquisition methods include social media marketing, influencer campaigns, paid ads like Google Ads, and offline options such as billboards and print ads. The best strategy depends on your business type, target audience, and other factors.

You can expect CAC to decrease gradually as your brand grows and gains visibility.

Return on Investment (ROI)

Another important KPI of online retailers that can directly measure eCommerce success is the return on investment or ROI.

ROI shows eCommerce businesses what they’re getting out of their investments in marketing and advertising. Put otherwise, it demonstrates how effective your paid strategies are and what returns your business is getting out of them. 

When calculating the return on investment, it’s important to factor in all of your costs and earnings to get a realistic picture of your performance. 

Naturally, a higher ROI means that you’re earning more from every pound spent.

Gross Margin

Next, we have gross margin – a metric that reveals how much revenue your company has left after subtracting all costs (cost of goods sold or COGS).

A higher gross margin means that your online business is keeping a higher revenue even after subtracting all the costs related to your efforts. This revenue can be reinvested in the industry, shared across the team, or used to pay off debt.

Net Promoter Score (NPS)

The net promoter score, or NPS, is an equally important metric for online businesses. This eCommerce KPI is related to customer experience and demonstrates how likely your existing customers are to spread the word about your products or services and recommend your business to friends and family.

Based on your company’s net promoter score, you can gain insights into three main groups of shoppers:

• Promoters – 9 or 10 score;
• Passives – 7 or 8 score;
• Detractors – 0 to 6 score.

The higher the score, the more likely your clients will recommend you. Each industry has its scares regarding a good and bad net promoter score. Make sure to adequately research your niche or market and compare it against your competitors. 

If your NPS turns out to be lower than expected, you could implement measures to improve your offering, invest in more training for your customer service team to ensure they provide an outstanding experience, and more.

Website Traffic

When it comes to running an eCommerce shop, one of the most important things to consider is the amount of traffic you receive on your website.

Why? 

Because the higher your traffic, the higher the chances of converting users to customers. 

The website traffic KPI simply demonstrates how many visitors your online shop has had in a specific period of time. 

What’s important to understand about this KPI is that it’s a result of a wide array of marketing strategies and campaigns, including paid ads, SEO, blogging, social media marketing, email marketing, and more. It also features users, new customers, and returning customers all in one.

This means that having a lot of website traffic won’t necessarily mean making a lot of sales for the given period. It only shows that you’ve successfully attracted users to your online store.

Bounce Rate

Another essential eCommerce KPI is the bounce rate or BR.

This metric reveals the number of visitors who leave your online store immediately after arriving without taking any action. It’s calculated by dividing the number of visitors who leave instantly by the total number of visitors, then multiplying by 100.

Minimising bounce rates is a top priority for online retailers. A low bounce rate indicates that users engage with your site by browsing products, reading articles, or taking other meaningful actions.

This activity shows interest and increases the likelihood of the user completing a purchase. 

Keep in mind that bounce rate directly impacts your conversion rate. For example, having a low bounce rate naturally increases your conversion rate and vice versa. 

On the other hand, a high bounce rate can negatively influence your Google page rankings and conversion rates.

Email Open Rate

Email open rate or EOR, on the other hand, represents the percentage of subscribers or shoppers who open a certain email. It’s calculated by dividing the total number of unique opens by the number of total emails sent multiplied by 100. 

The average email open rates vary based on the industry you’re in. However, it’s considered that in most cases, EOR ranges from 15% to 25%, with the average being 21.33%. 

If you discover that your email open rates are much lower than this, the reasons could be several. For instance, it may be that your subject lines are not appealing enough or perhaps you haven’t prepared your email lists correctly. 

Analyse your email marketing strategy and identify ways to make improvements leading to a higher email open rate. Use personalisation techniques where possible and make sure you send your emails to the right people at the right time. 

Click-Through Rate (CTR)

When discussing eCommerce KPIs, we can’t ignore click-through rate or CTR – one of the most key metrics on the list.

It reveals how many clicks a paid ad or search result has received compared to the total number of impressions (the number of times it has been displayed in front of users). For example, every time a user sees your online store ranking on search engine results pages, it counts as an impression. 

A high CTR indicates that your online business is performing well in attracting interest. It shows that people respond well to your messaging and are intrigued by what you offer. 

Through click-through rate, you can understand more about how your ads perform, how much visibility your business gets from search engines, and whether the links provided in your content (newsletters, emails, and others) are working correctly.

Social Media Engagement Rate

Today, social media marketing is at the core of digital strategy for any eCommerce brand, no matter its size or level of experience. 

The social media engagement rate measures how actively your followers or audiences engage with your content. It reflects the percentage of followers interacting with posts via likes, shares, comments, reposts, clicks, or saves. 

A high social media engagement rate signals that you have established outstanding customer trust and follower satisfaction levels. It demonstrates that you’re familiar with what type of content your audience expects to see, and you’ve successfully managed to relate to their interests and pain points.

Like other eCommerce KPIs, the average social media engagement rates will vary from industry to industry.

Customer Retention Rate

Customer retention is crucial for any eCommerce business looking for long-term success and profitability.

This metric represents the number of repeat customers you’ve retained over time in percentage form. In other words, these shoppers continue buying from you in a specific time frame, like a quarter, half a year, or a year.

To find your customer retention rate, you can subtract the number of new customers acquired from the total number of customers at the end of a specific period. Divide the result by the number of customers you recorded at the start of the given period and multiply everything by 100.

This eCommerce metric is the easiest way to determine whether your customers are returning to your brand or if you need to improve in some areas.

Remember that the customer retention rate is different from the repeat purchase rate, which shows how many shoppers will purchase from you more than once.

Refund and Return Rate

No matter how successful you are at attracting visitors and converting them to customers, some of your shoppers will undoubtedly return products and ask for refunds. 

The refund rate or return rate identifies the percentage of sales that have been returned by subtracting the original value (or sales) from the current value (refunds). This difference is then divided by the original value and multiplied by 100 to get its percentage form. 

By understanding and tracking your refund or return rate, eCommerce stores can establish the rate shoppers ask for refunds.

The higher the rate, the lower the product quality, customer satisfaction, and loyalty.

Time on Site

When you attract visitors to your eCommerce shop, you want them to stay longer on the site, exploring products and finding information about your brand. This increases the likelihood of the user making a purchase decision and buying from you.

Time on site represents the average time a user spends on your site before leaving. This time doesn’t necessarily have to be linked to shopping activity. 

You can find this data from your Google Analytics, where the KPI is automatically displayed. 

If your time on site is high, this means that your eCommerce store is attractive, appealing, and interesting for visitors.

Page Load Time

Page load time is a fundamental metric for user experience and SEO or Search Engine Optimisation. 

It demonstrates your page’s time to load and display its content, including images, videos, written text, and others. 

There are plenty of ways to find out your page load time, but one of the most popular ones is to use Google PageSpeed Insights, a free tool that offers insights into your site’s performance.

Given that we live in a highly quick-paced world, you must offer speed and convenience to your shoppers and potential customers. Making users wait over three seconds to browse a page is a bad practice and requires SEO improvements. 

Product Reviews and Ratings

Covering the topic of eCommerce KPIs also calls for a look into product reviews and ratings – the purest and most valuable social proof a brand can receive. 

Product reviews and ratings are not only essential for encouraging shoppers to purchase from you. They’re also a ranking factor and a necessary part of SEO. Not to mention that they can give you a realistic picture of what your customers honestly think and feel about your brand, products, and services. 

Make sure you regularly track the number of product reviews and ratings you have and analyse them closely to spot any gaps in your strategy.

Stock Turnover Rate

The stock turnover rate or inventory turnover ratio measures how frequently inventory or stock is sold and replaced during a specific period. It’s usually tracked annually and is essential for discovering how effectively you manage and move stock through the sales cycle.

You can calculate this eCommerce KPI by dividing the Cost of Goods Sold (COGS) (the total cost to produce or purchase the goods sold during a specific period) by the average inventory value (the average value of the inventory held during the same period).

Cost per Click (CPC)

Cost per click or pay per click reveals how much your eCommerce business spends per click on a paid ad. 

In other words, it uncovers the cost of getting a user to click on your ad on Google, Facebook, Instagram, or other marketing channels. 

Naturally, a lower cost per click means you’ve done a great job setting up your campaign. You’ve targeted the right users, created attractive content, and inspired people to learn more about your brand or product. 

To calculate the cost per click, simply divide the advertising costs by the number of clicks received due to the campaign. 

Conclusion

By tracking these fundamental key performance indicators (KPIs), eCommerce businesses can clearly understand their current achievements and, most importantly, compare them to previous periods.

This enables strategic analysis and informed decision-making for future campaigns, practices, product developments, and more.

Frequently Asked Questions

Is customer service email count another important KPI to track?

The customer service email count is the total number of emails your customer support team receives. Tracking this KPI helps businesses understand the volume of customer inquiries and complaints, ensuring that customer service teams are adequately staffed and that responses are timely. Although it’s not considered a must-have metric, it can offer valuable information.

How can tracking cart abandonment rate improve sales performance?

This KPI measures the percentage of users who add products to their cart but leave without completing a purchase. By tracking and addressing this metric, businesses can recover lost sales.

How can eCommerce businesses track all of these KPIs?

To be able to access the necessary data to track the eCommerce KPIs we shared above, it’s necessary to put in place reliable tracking tools and systems like Google Analytics, tracking features of eCommerce platforms, and others.