E-Commerce KPIs You Must Track For Ensuring Success

by Emily on May 13, 2019

in Articles

Running an online shopping store requires good homework and knowledge of various key performance indicators to check how you are doing in the market. In this post, I will discuss what indicators you must check to ensure better ROI. 

Many of you would always inquire that how to create a successful online store? With the help of digital marketing or high-quality customer support or excellent product, well! there is no definite   factor that can guarantee the expected result, however, an amalgamation of a variety of reliable factors can help in achieving great results.

Achieving success in the competitive online market is quite complex, but right metrics can make and break your online presence & sales. It is true that there is a bunch of metrics and choosing those that are directly related to your store’s growth set you apart and ensure better results.  

Metrics are key performance indicators

Before you learn about metrics related to sales, you need to know about KPIs.  It stands for key performance indicator. Actually, key performance indicators are chief aspects that allow you to track your stores’ performance online.

Undoubtedly, the sales are the intrinsic part of marketing, and they are directly associated with each other.  To augment your online store’s visibility, pull more people to your store and create a sound relationship with them, you need to learn their behavior. In this regard, here are some best KPIs that you need to track:

1.  Conversion rate

Online marketing space is very big and the conversion rate is very low relatively, because of the obvious reason. According to Big-Commerce, the total conversion rate is not more than 2%. The average of it lies between 1% to 2%. So, you don’t need to expect a huge result. Just understand the market and strive persistently.

You can calculate the conversion rate through the formula
Conversion Rate = # of Sales / # of Visitors

Most of the analytics tools have the feature to calculate it, so you don’t need to do it manually.

2.  Percentage of Returning Customers

Remember that attracting people to your eCommerce store and inspire them to come back are equally important for success. This is crucial for various reason:

When they come to your brand again, they grow more willing for shop and  buy more on your store.
They are valuable as you don’t need to pay again for customer acquisition.
Satisfied customers are good for brand reputation and more.

So, it is essential to track the percentage of returning visitors. It is a metric that allows you to track the loyalty of customers for your store and tell how frequently they visit your store with visit conversion rate.

3.  Cost of sales

This also referred to as the cost of goods sold (COGS).  Actually, it is an accumulation of the costs that have been used to create a product or service that has been sold.

Company’s inventory system allows you to post them, though the basic calculation of it can be done through the following formula:

COGS= Beginning Inventory + Purchases- Ending Inventory

It is an important metrics that directly indicates how much profit an eCommerce store is making.

4.  Average Order Value 

AOV is a measure the allows you to know the average amount spent on daily order placed on your eCommerce store. This is a very important KPI on which you must emphasize, because it allows you to look into how much you are incurring from every customer, in return the amount you have spent in acquiring the customer.

The formula to calculate:

Average Order Value = Revenue / # of Orders

You need to know that this value is tracked per order, not per customer. It means each order placed on online shopping store is a separate entity into AOV.

5.  Shopping Cart Abandonment Rate

It is very important to learn how many customers are abandoning the shopping cart. According to the researches in this regard, the average cart abandonment is 70%. Another surprising fact is, this gets even worse if marketer paid a lot of money to acquire customers and drive them to the cart.  In such a situation, focusing on the drawing them back and tracking cart abandonment rate regularly are better tactics.

This shows you how many customers have added products to their shopping cart and left them without revisiting.  You can calculate by the following:

Abandonment rate= Number of transactions/ number of shopping cart created * 100

Apart from these, checking traffic on eCommerce site and revenues by traffic source are major key performance indicators that allow you to know overall performance. Ecommerce platforms like Waki are utilizing these key performance indicators that are allowing them to learn customers and their behavior. So, if you are striving for creating and driving the best online shopping store, ensure to go along with these factors.

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