The eCommerce metrics precisely indicate how your business is performing. Selling your products on various eCommerce platforms without keeping track of your performance is like driving a vehicle with closed eyes. The eCommerce marketing automatically stops working after some time if you don’t measure and upgrade it. Whether it is eCommerce or any other business, none can survive if you do not take the follow-up of your overall performance and compare the progress with your previous business growth.
Being a brand or a seller, it is not that easy to decide which online eCommerce business metrics you need to monitor. It is hard to make the right decision when beginning your entrepreneurial journey. The eCommerce metrics are defined measurements that can be evaluated and observed consistently. These metrics vary from abandonment rates to conversion rates and the balanced order value. Sales and revenue will probably be if we talk about which eCommerce metrics you should track. However, these two metrics don’t say much about how well your business is doing at different stages, especially finances. Every online brand should measure and track the following KPIs (Key performance indicators) to ensure that everything is running smoothly beneath the surface. In this process, you can also take the help of some of the seller analytics tools such as etraKY BS.
Do Track These 10 Significant eCommerce Metrics
The essential key eCommerce metrics mentioned below will provide you the overall clarity about your online business performance. Depending on your order quantity, countering them daily or weekly should be enough to identify the potential issues.
It is one of the essential eCommerce metrics; most brands and sellers calculate the conversion rate by the formula: total number of existing customers/total number of unique customers. One of the most common issues eCommerce beginners or entrepreneurs can experience is getting humongous traffic but no sales at all. It demonstrates why the average conversion rate for the eCommerce industry tends to be so slow, only around 2.25%. You need to understand that only driving the customers to your product is not everything, they need a lot of assurance before buying a product. The product’s price, payment, return options, delivery date, etc. Customers check all these aspects before placing the order, so you always need to set up a standard of all these aspects as a brand. The conversion is essentially how successfully you convert the new customers into your regular ones. The entire process of improving this metric is known as conversion rate optimization. You need to keep track of your regular sales channel, the behavior of the customers towards your product, and order quantity to analyze where the issue occurs. To increase the conversion rates, you can use the seller analytics tool, which can help you improve your product’s listing quality. It should be top-notch as it attracts more customers and convinces them to buy your product.
Customer Lifetime Value
This eCommerce metric indicates how much a habituated customer is worth to your online business. This metric shows the overall value of your regular customers and provides you with a better understanding of which customers are expected to become loyal customers. Some customers with high CLTV are likely to be addicted to your product immensely, which means you can concentrate on your customer retention strategies for them. You should be aware that it may cost you five times more to achieve a new customer than to retain a regular customer. This is why it is important to keep an eye on the performance of your eCommerce business using either predictive or historical customer lifetime value. Historical customer lifetime value is the value of a customer based on their previous purchases. On the other hand, predictive CLTV is forecasting the future lifetime value of a customer on the basis of their past purchases approach.
Average Order Value
This metric indicates the average amount a customer spends on each brand’s product. It is considered one of the vital eCommerce metrics. You can acquire the average order value by dividing the total value or profit made from all the sales by the number of orders made. You can also track the average order value by separating your customers according to the source of traffic and location of the customers or by diversified eCommerce platforms you are selling your products on. It can help you identify various acquisition platforms, generate the highest average order value, and enable you to run compatible marketing campaigns and enhance your return on investment. You can efficiently upgrade your total revenue by increasing the average order value. You can revamp your average order value as a brand by giving the customers free shipping and checking which eCommerce channels bring your highest average order value.
Average Profit Margin
This significant eCommerce metric shows what you earn from each product after minimizing what you have spent on supplying it. It is calculated as a percentage of the retail price and shows what fragment of it is your profit. It will help if you keep an eye on whether you are making profits from selling several products or not. If you want a sustainable eCommerce business, you need to keep it higher than the average acquisition cost. It is excellent to have the highest performing products that earn you a compelling margin and others that barely make any profit. However, to improve the rate of your average profit margin, you need to highlight your most profitable products on various eCommerce platforms to sell most of them. At the time of listing your product on various marketplaces, you should go for the high-margin ones. While listing your products on eCommerce platforms, you can take the help of listing quality analysis tools.
Cart Abandonment Rate
The cart abandonment rate is one of the leading issues that affect eCommerce channels. Based on a recent assessment, it has been found that approximately 40%-55% of online customers abandon their carts due to various reasons. This metric demonstrates the percentage of customers who add products to their cart but run away without placing an order. The positive news about it is that it is possible to measure and lower the cart abandonment rate as much as possible. You can measure the cart abandonment rate by keeping track of the number of orders placed and many shopping carts created. Customers can abandon your cart if they find any glitch in the eCommerce website, high delivery charges, and even if the checkout process is complicated or there are not enough payment options available. To avoid cart abandonment, you should enhance all these factors and make it easy for your customers to place an order.
The above eCommerce metrics enable online sellers and brands to inspect and measure the performance of their products for decision-making purposes. You can use the metrics with KPIs to attain a more equitable and specific way to measure the performance of each product you are selling on various platforms. Always remember to keep your metrics significant to your business goals. However, to improve the rate of these metrics, you can use powerful brand analytics tools such as etraKY BS.