10 Metrics E-commerce Business Should Track for Growth | Diffshop

10 Metrics Every E-commerce Business Owner Should Track for Growth

The average e-commerce conversion rate hovers around 3%. This number might seem low, but it represents just one metric in the complex landscape of online business performance. Cart abandonment rates can reach 80%, which shows why tracking these numbers is vital to succeed.

Our research reveals that thriving e-commerce businesses track at least 20 different metrics regularly. These measurements, from customer lifetime value to acquisition costs, give an explanation about your business's health. The reality of $165 million in returns per billion in sales and the need to boost Net Promoter Scores make these metrics even more significant. We'll help you understand the most valuable measurements to grow your online store.

This detailed piece will show you the basic metrics that help you make evidence-based decisions. You'll discover clear opportunities to improve your e-commerce business.

Why Track E-commerce Metrics

Ecommerce metrics are the foundations of successful online retail operations. Data shows that businesses using real-time metrics perform 22% better in operational efficiency and 20% better in state-of-the-art solutions. These measurements tell you about your store's health and growth potential.

Impact on business decisions

Good business decisions need reliable data. Businesses that trust real-time data create better customer experiences and show more business agility. The core team can spot threats or opportunities and change direction without extra approvals when they have access to real-time metrics.

Tracking ecommerce metrics does more than help daily operations. Studies show that Gen Z (67%) and millennials (68%) think brand consciousness about emissions is highly important, compared to Gen X (58%) and baby boomers (57%). Companies that track sustainability metrics can line up their operations with customer values and optimize operations.

Role in sustainable growth

E-commerce growth depends on complete metric tracking. Research shows companies that focus on sustainability metrics see stronger growth in their eco-friendly product lines and get higher market multiples. Companies that put proper tracking systems in place can boost revenue between 6% to 12%.

Tracking ecommerce metrics helps sustainable growth in these ways:

• Spots resource conservation opportunities
• Makes operations more efficient
• Sets clear standards for accountability
• Shows progress toward environmental goals

Ecommerce performance metrics help businesses understand customer behavior better. Companies can shape their offerings by analyzing buying patterns, price elasticity, and what drives loyalty. These metrics help find ways to improve circularity and reduce carbon across product categories.

Data tracking protects customer information effectively. Strong consent management systems and clear data collection practices build customer trust. This approach follows regulations and respects consumer choices, which helps build lasting business growth.

Getting Started with Basic Sales Metrics

Simple sales metrics are the life-blood of successful e-commerce operations. Let's explore three key measurements that shape business decisions and propel development.

Total revenue tracking

Total revenue represents the sum of all completed sales within a specific period. We used it to gage overall business health. This metric helps identify growth patterns and seasonal trends. The calculation involves adding up all sales values while excluding returns and canceled orders.

Google Analytics 4 helps businesses identify their most valuable marketing channels, landing pages, and keywords through revenue tracking. This knowledge helps optimize marketing budgets and improve return on investment.

Number of orders

The number of orders metric reflects all confirmed purchases within a defined timeframe. This measurement helps determine cost formulas, inventory requirements, and economic order quantity (EOQ).

Order count shows:

• Customer demand patterns
• Sales trends
• Operational effectiveness
• Market position

Average order value

Average order value (AOV) shows how much customers typically spend in a single purchase. The calculation involves dividing total revenue by the number of orders. To cite an instance, see a store that generates $50,000 in revenue from 250 orders - the AOV would be $200.

AOV matters especially when you have direct impact on profitability without additional customer acquisition costs. Most online retailers in the United States average about $78 per order. Desktop users show 20% higher AOV than mobile or tablet users.

Your AOV helps set realistic revenue goals. A store with an AOV of $45 would need approximately 222 customers to achieve $10,000 in monthly sales.

This metric also shows:

• Product pricing effectiveness
• Customer buying patterns
• Marketing strategy success

Businesses can boost their AOV through:

• Creating product bundles
• Offering free shipping thresholds
• Implementing loyalty programs

Live chat integration shows promising results. Businesses report 10-15% higher cart values with this feature. Evidence-based decisions that come from tracking these simple sales metrics encourage green growth.

Understanding Customer Behavior Metrics

Customer behavior metrics show us what makes e-commerce tick. Let's look at two simple measurements that help us learn about how shoppers act and what their priorities are.

Conversion rate basics

A conversion happens when someone takes a desired action on your website. Many actions can count as conversions, but the order conversion rate matters most in e-commerce. Yes, it is the percentage of website visits that end in completed purchases.

You can find your conversion rate by dividing orders by total website visits and multiplying by 100. E-commerce websites typically see conversion rates of 1% to 4%.

All the same, these numbers change by a lot based on several factors:

• Desktop users convert at 3%
• Tablet users show a 3% conversion rate
• Mobile users convert at 2%

Food and beverage businesses, along with health and beauty companies, had the best conversion rates in 2022. Therefore, knowing your industry's standards helps you set achievable goals.

Cart abandonment patterns

Shopping cart abandonment is one of e-commerce's biggest problems, with nearly 70% of shoppers leaving items in their carts without buying. The numbers look even more striking by device:

• Desktop shows 73.07% abandonment
• Tablets experience 80.74% abandonment
• Mobile guides with 85.65% abandonment

Customer concerns drive most cart abandonments. Extra costs make 48% of shoppers abandon their carts, while 24% leave because they must create an account. Like this, 22% of potential customers give up when delivery takes too long.

Cart abandonment affects industries differently. Home furnishing tops the list at 90.50%, with automotive following at 85.97%. APAC region leads global cart abandonment at 82%.

Age makes a difference too. Shoppers between 25-34 years have the highest abandonment rate at 21%, with the 35-44 age group close behind at 20%. Cart abandonments drop during each month's final days.

These patterns show businesses where to focus their solutions. To cite an instance, guest checkout options and upfront cost transparency can reduce abandonment rates by a lot. On top of that, multiple payment choices and a secure website help build customer trust.

Measuring Customer Value

The value each customer brings to your business gives you a clear picture of what drives sustainable growth. Two metrics tell this story best: customer lifetime value and repeat purchase rate.

Customer lifetime value

Customer lifetime value (CLV) shows how much revenue a business can expect from a customer throughout their relationship. We focused on long-term value instead of single transactions. This helps businesses make smart decisions about getting and keeping customers.

Your CLV calculation needs these elements:

• Average purchase value
• Purchase frequency
• Customer lifespan
• Gross margin

To name just one example, let's look at customers who spend $50 per purchase and buy 5 times yearly over 3 years. Their CLV would be $750. The gross margin gives us a better picture of how profitable these customers are. A 60% gross margin means the actual CLV would be $600 in this case.

CLV helps businesses spot their best customers and create better marketing plans. This knowledge lets you spend your resources wisely to get new customers. You can also build targeted strategies to keep existing ones and predict future revenue.

Repeat purchase rate

Repeat purchase rate (RPR) shows how many customers buy from your store more than once. This number changes a lot between industries, which gives us good standards to measure against.

CBD products top the list with a 36.2% RPR. High-performance sports and athletic products follow close behind at 33%. Products like meal deliveries and supplements maintain about 29% RPR, while tea products show 20.9%.

RPR has a direct effect on your revenue. Picture this: if you have 10,000 customers spending $100 on average, a 20% RPR means 2,000 customers buy again. This creates $200,000 in extra revenue.

Products that people use regularly show higher repeat rates than one-time purchases. That's why brands selling directly to consumers who focus on customer connections and tailored messages often keep more customers.

The link between CLV and RPR becomes clear in subscription businesses. A customer's value grows as they stay with a brand. Companies that keep their customers happy through loyalty programs and great service see both these numbers improve.

Traffic and Acquisition Metrics

Every online store owner needs to know their visitor sources and acquisition costs. These ecommerce metrics shape business growth and success.

Website traffic sources

Direct traffic makes up 27% of all ecommerce visits. This shows strong brand recognition and customer loyalty. These visitors type your URL directly or use bookmarks to reach your store.

Organic search brings in 22% of total traffic. Visitors find your store through unpaid search results, which shows how well your SEO works. New customers often find brands this way, making it a vital channel for growth.

Paid search drives 19% of ecommerce traffic. This channel lets you target specific keywords and audiences to reach people looking for products like yours.

Email marketing brings 5% of overall traffic, and paid social media accounts for 4%. Organic social media adds 1%. The other 22% comes from sources of all types including affiliate marketing and referrals.

Customer acquisition cost

Customer acquisition cost (CAC) shows how much you spend to get a new customer. This metric includes all marketing and sales expenses:

• Marketing software and tools
• Staff salaries
• Advertising fees
• Content creation costs

Small ecommerce businesses with fewer than four employees spend about $58.64 to acquire each customer. This number usually goes up as companies grow. A balanced ratio becomes vital in these cases.

The sweet spot for customer lifetime value (CLV) to CAC ratio lies between 3:1 and 5:1. A ratio above this range means you might be missing growth opportunities. A lower ratio shows you're spending too much to get customers.

Businesses can optimize their CAC by:

1. Making their website SEO better
2. Finding their best marketing channels
3. Focusing on valuable customer segments

Studies show companies that excel at getting customers are 60% more likely to beat their competition. Understanding these metrics helps make informed decisions that propel sustainable growth and profitable customer relationships.

Product Performance Metrics

E-commerce businesses need product performance metrics to make smart inventory decisions and keep customers happy. These measurements show which products make money and which ones need improvement.

Best-selling items

Top-performing products can only be identified by looking at multiple data points at once. Smart retailers look beyond basic unit sales to think about revenue contribution and profit margins. Data analytics helps them understand their customers' priorities and make better decisions about product selection and pricing.

Note that profitable products do well because they either solve a problem, serve a passion, or make life easier for customers. Many businesses think their best sellers are just the ones that sell the most units.

A better, all-encompassing approach looks at:

• Product margins and overall profitability
• Customer feedback and satisfaction rates
• Seasonal performance patterns
• Market trends

Many stores judge their top products only by how many units they sell. This approach falls short when it comes to long-term growth and profits. When combined with inventory optimization and retail KPIs, businesses can figure out which products deserve the best placement and marketing attention.

Product return rates

Return rates tell you a lot about how well products perform and how satisfied customers are. E-commerce return rates average between 20-30%, which is by a lot higher than physical stores at 8.89%.

The industry data shows some interesting differences in return rates:

• Clothing and apparel tops the list at 26%
• Bags and accessories come in at 19%
• Shoes sit at 18% returns

Return patterns help spot issues throughout the customer's buying experience. The costs add up fast - handling and restocking a $50 return can cost about 59% of the selling price. For every $1 billion in sales, retailers lose around $165 million to merchandise returns.

Most returns happen for three main reasons:

1. Product defects
2. Customer dissatisfaction
3. Shipping errors

Return rate analysis by product category helps businesses make smart decisions about inventory and product offerings. Studies show that retailers who track return rates can spot patterns and fix problems. To name just one example, better product descriptions and detailed sizing charts help reduce clothing returns.

Smart retailers use return data to improve their products and customer experience. Looking at return patterns helps them fine-tune their product lineup, adjust promotions, and improve sales strategies. Customer feedback from returns also gives valuable information to make products better.

Setting Up Your Tracking System

A resilient tracking system is the foundation of successful e-commerce analytics. We started by picking the right tools and created a well-laid-out measurement plan to track key ecommerce metrics.

Choose your analytics tools

The right analytics tools should match your business needs and data analysis requirements. Google Analytics stands out with approximately 38 million websites using it. Its extensive features and integration options make it so popular.

Your tool selection depends on several factors:

• Business size and complexity
• Data analysis requirements
• Integration needs with existing systems
• Budget considerations

Analytics platforms come with different capabilities. Hotjar serves over 1 million websites in 180+ countries and provides heatmaps and session recordings. Shopify Analytics helps 4.5 million stores with built-in tracking. WooCommerce Analytics supports more than 7 million WordPress websites.

The best analytics tool is one that your team uses regularly. Look for tools that give you both quantitative data like traffic numbers and sales totals, along with qualitative data from customer feedback.

Create a measurement plan

A measurement plan turns business objectives into measurable metrics and gives your team a framework for analytics setup. This document becomes your team's single source of truth.

Your measurement plan needs these key components:

1. Define Business Objectives: Start with your top-line business goals.
2. Establish Key Performance Indicators: List specific KPIs that line up with each objective.
3. Consider Segmentation Requirements: Split performance targets by:

• Mobile and desktop users
• Geographic regions
• Product categories

1. Implementation Planning: Find tracking gaps and build a detailed strategy. Tag management solutions like Google Tag Manager help make future changes easier.

The plan should show how business objectives translate into measurable performance metrics. This approach helps you make evidence-based decisions.

Regular upkeep ensures long-term success. Your technical needs, business goals, and the digital world will change. Review and adjust reports periodically to keep them accurate and relevant.

A well-laid-out measurement plan helps filter data noise from different platforms. Automated dashboards with important metrics let businesses monitor performance and make smart decisions about their ecommerce tracking.

Taking Action on Metric Insights

Raw data alone can't help businesses grow. We turned key ecommerce metrics into practical strategies that boost expansion and improvement.

Identify growth opportunities

Looking at collected data helps businesses understand market dynamics beyond their decision-makers' viewpoints. Companies that use data to make business decisions become more agile and spot new opportunities for success.

Looking at multiple data sources at once helps identify growth opportunities.

Companies that analyze customer behavior and purchasing patterns can spot trends that show:

1. Product pricing optimization points
2. Customer segment opportunities
3. Marketing channel effectiveness
4. Operational efficiency improvements
5. Customer experience enhancement areas

Research shows that companies keeping close track of their ecommerce performance metrics are 60% more likely to outperform their competitors. Their advantage comes from knowing how to spot and act on patterns in their data sets.

Companies that learn the nuances of e-commerce metrics gain a strategic advantage. To cite an instance, analyzing bounce rates, average order value, and customer acquisition costs reveals important details about customers' buying experiences.

Make data-driven decisions

Data-driven decision-making focuses on collecting and using quality data to guide strategic business choices. The successful implementation needs a well-laid-out approach to turn insights into action.

Companies can improve their decision-making through business intelligence (BI) software, which offers several advantages:

• Real-time KPI monitoring
• Trend and pattern identification
• Automated report generation
• Enhanced team collaboration

Quality and accurate data form the foundation of effective data-driven decisions. So, businesses must gather representative and reliable data while thinking about all variables to avoid bias.

Studies show that companies focusing on data-driven strategies see revenue growth between 6% to 12%. On top of that, these companies deliver better customer experiences and show greater business agility.

Companies should focus on these aspects while making data-driven decisions:

• Clear objectives that line up with company goals
• Measuring factors that affect outcomes
• Analyzing relevant data sets for patterns
• Getting practical insights from findings

This approach ended up improving operational efficiency naturally - teams that analyze concrete facts avoid decisions that could harm the business.

Better customer experience comes from this approach too. By analyzing data from reviews, customer complaints, and surveys, businesses learn what helps and hurts their customer experience and retention. One retailer found through data analysis that their customers rarely bought shoes priced above $100, which led to strategic pricing changes.

Companies should take these steps to get the most from data-driven decisions:

• Monitor key performance indicators in real-time
• Generate automated reports for stakeholders
• Boost collaboration through shared insights
• Use predictive modeling for forecasting

Research shows 65% of B2B businesses will make data-driven decisions by 2026. Companies using data-driven strategies have seen five to eight times more ROI than those who don't.

Complete analytics tools make this process more effective. These solutions help measure marketing campaign success, improve decision-making, gain omnichannel traction, and guide comprehensive marketing efforts.

Conclusion

Tracking the right e-commerce metrics creates a clear picture of your online store's health and growth potential. Each metric - from simple sales figures to complex customer behavior patterns - serves as a vital piece of the puzzle that helps understand your business performance.

Companies that actively track these metrics experience 6-12% higher revenue growth and make better strategic decisions. These numbers represent actual opportunities to improve and grow your e-commerce business.

Metrics like cart abandonment rates, customer lifetime value, and acquisition costs reveal exactly where your store needs attention. You should start small and focus on a few key metrics that arrange with your current business goals. Your tracking can expand to include more sophisticated measurements as you become comfortable with data analysis.

The success in e-commerce depends on making informed decisions based on reliable data. These metrics reveal your customers' needs, priorities, and behaviors. They are not just numbers. You can use them wisely to build a stronger, more customer-focused online store.

FAQs

Q1. What are the most crucial metrics for e-commerce success? The most important metrics for e-commerce success include conversion rate, customer lifetime value, average order value, cart abandonment rate, and customer acquisition cost. These metrics provide insights into sales performance, customer behavior, and overall business health.

Q2. How can I improve my e-commerce conversion rate? To improve your e-commerce conversion rate, focus on optimizing your website's user experience, offering clear product descriptions, providing multiple payment options, and implementing a streamlined checkout process. Additionally, consider using targeted marketing strategies and personalized recommendations to encourage purchases.

Q3. What's the significance of customer lifetime value in e-commerce? Customer lifetime value (CLV) is crucial as it helps you understand the long-term value of each customer. By focusing on increasing CLV, you can make informed decisions about customer acquisition costs, retention strategies, and overall business growth. It also helps in identifying and nurturing your most valuable customers.

Q4. How can I reduce shopping cart abandonment in my online store? To reduce shopping cart abandonment, ensure transparency in pricing and shipping costs early in the shopping process, offer guest checkout options, provide multiple payment methods, and maintain a secure website. Additionally, consider implementing cart recovery emails and offering limited-time discounts to encourage completion of purchases.

Q5. What role does data-driven decision-making play in e-commerce growth? Data-driven decision-making is essential for e-commerce growth as it allows businesses to identify trends, optimize operations, and enhance customer experiences. By analyzing metrics and acting on insights, companies can make informed choices about product offerings, marketing strategies, and customer service improvements, leading to increased revenue and customer satisfaction.