“Most businesses are data rich, but information poor.” – Avinash Kaushik, Digital Marketing Evangelist at Google & Author of Web Analytics 2.0.
Working blindly without tracking is a recipe for disaster. In the dynamic world of ecommerce, understanding your business’s performance is crucial for growth. This is where ecommerce Key Performance Indicators (KPIs) come into play.
By delving into these metrics, you can understand customer behavior, identify areas for improvement, and enhance the overall value you offer. This, in turn, leads to increased conversion rates.
Remember, the key lies in having the right data at your fingertips, empowering you to make informed decisions and guide your online business towards successful scalability.
So without any further ado, let’s explore some of the most important eCommerce KPIs to track in 2024.
- What are Ecommerce KPIs?
- Ecommerce KPIs Attributes
- 50+ Ecommerce KPIs To Track in 2024
- Measuring your Ecommerce Success
- How Do I Establish KPIs for E-Commerce Success?
- An Overview of Ecommerce KPIs [INFOGRAPHICS]
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What are Ecommerce KPIs?
Ecommerce KPIs are key performance indicators that can be used to determine the success of your business. They can be used to monitor your online business growth, sales, and your customer support targets. You can set KPIs based on your business objectives.
Ecommerce KPIs Attributes
Online businesses utilize a number of tools to track different ecommerce KPIs. Google Analytics dominates the market. However, as Albert Einstein once said, “Not everything that can be counted counts, and not everything that counts can be counted.”
So, how can you ensure that you have selected the right KPIs to track?
Here’s a start. KPIs that provide helpful bits of knowledge about an organization’s performance has the following four attributes:
- They must create an impact.
- You can measure them accurately.
- They must deliver data in real-time.
- They must be actionable so that you can make improvements.
There are various examples of ecommerce KPIs that entrepreneurs measure to scale their businesses. However, you must ensure that these ecommerce key performance indicators are not only qualitative and quantitative, but they should also be able to forecast performance or give a better understanding of past events.
We have divided the Ecommerce KPIs into the following major categories:
- Customer service
- Store Performance Management
Why Are Ecommerce Metrics so Important?
Ecommerce metrics and KPIs are critically important for businesses to help them determine their performance, and to track whether the day-to-day operations are supporting the overarching goals of the company. These ecommerce metrics are used by businesses in order to analyze data and gain more insights into the functions of the company.
KPIs help businesses analyze and understand what they are doing wrong and then alter their strategy accordingly to get things on track. More importantly, the data analyzed by setting up ecommerce KPIs can be used to educate your sales and operations teams and improve performance across the company.
List of The Most Important Ecommerce KPIs and Metrics in 2024
Here’s a list of the most popular ecommerce KPIs examples that can help you scale your online business with minimum effort.
Ecommerce Metrics to Measure Sales
The most commonly measured ecommerce KPIs for sales are:
1. Average Order Value (AOV)
Also known as the Average Market Basket, the AOV lets you know how much your customers typically spend on one single order. The AOV will give you a better idea about how much revenue each customer is generating.
AOV = Total Revenue / Number of orders.
2. Gross Profit
It is an important ecommerce KPI and helps entrepreneurs to plan ahead. It shows you the amount of profit after subtracting the costs of production and distribution.
Gross Profit = Total Cost of Goods Sold – Total amount of sales.
3. Conversion Rate (CR)
CR is the percentage that identifies at what rate people are purchasing your products. If your conversion rate is low, you need to optimize your website.
Conversion Rate = (Total Number of Visitors on the Website / Total Number of Conversions) x 100
4. Shopping Cart Abandonment Rate (CAR)
This ecommerce KPI tells you how many visitors are adding products to the shopping cart but are not checking out or purchasing them. Reduce friction in the checkout process to improve your overall shopping cart abandonment rate.
CAR = 1 – (Total Number of Completed Transactions / Total Number of Shopping Carts) x 100
5. Shopping Cart Conversion Rate (CCR)
This ecommerce KPI measures how many visitors actually complete the checkout process by purchasing the products.
CCR = (Total Conversions / Total Number of Visitors) x 100
6. Cost of Goods Sold (COGS)
It’s the amount you’re spending to sell your product. For example, manufacturing costs, employee wages, overhead costs, and all other costs directly associated with distribution and production.
COGS = Beginning Inventory Costs (of the year) + Additional Inventory Costs (purchased during the year) – Ending Inventory (at the end of the year)
7. Customer Lifetime Value (CLV)
It tells you the worth of each customer to your business. Strengthen relationships by focusing on customer loyalty to improve this number. It will help you understand your cost per acquisition.
CLV = (Customer’s Annual Profit Contribution x Average Number of Year as Customer) – the Initial Cost of Customer Acquisition
8. Churn Rate
For an online business, the churn rate lets you know at what pace your customers are leaving your brand or canceling subscriptions.
Formula: Begin by subtracting the total number of customers remaining at the end of the month from the number of customers at the beginning of that month and divide by the total number of customers at the beginning of the month. Multiply by 100 for its percentage and further, multiply it by twelve to get the annual churn rate.
9. Customer Acquisition Cost (CAC)
This ecommerce KPI tells you how much you’re spending to acquire a new customer. You can measure it by analyzing your marketing spend and how it breaks down per customer. The lower your acquisition cost, the better.
CAC = Costs Spent on Acquiring Customers / Number of Customers Acquired
10. Repeat Purchase Rate (RPR)
It tells you the number of customers that return to your website in order to make another purchase. It can help you measure customer loyalty as well as you can plan your sales strategies. A higher repeat purchase rate is generally better.
RPR = Purchases from Repeat Customers / Total Purchase
11. Average Profit Margin
It is the percentage that represents your profit margin over a specific period of time. Ideally, you would want your average profit margin to increase as production or sales ramp up.
Average Profit Margin = Gross Profit / Revenue
12. Revenue per Click (RPC)
It’s simply the average revenue for each click on all of your pay-per-click campaigns. It allocates a value to every paid click.
RPC = Revenue / Total Number of Clicks
13. Purchase Frequency
It measures the average number of orders your customers made during a specific period of time. A great KPI to measure customer loyalty and to highlight under performing products or categories.
Purchase Frequency = Total Number of Orders / Total Number of Unique Customers
15. Time Between Purchases
It shows how long a customer goes before making a purchase from you again. It is a good ecommerce KPI to know as it allows you to tailor your campaigns as per their behaviors.
Time between Purchases = Purchase Frequency / 365
16. Inventory Turnover
Inventory turnover is an important KPI and financial ratio that ecommerce store owners can use to determine the number of times their inventory is sold throughout the course of the year. They help you see whether your business has excess inventory as compared to its overall sales levels.
Inventory turnover = Net Sales / Average Inventory at Selling Price
17. Holding Inventory Ratio
This ratio or ecommerce KPI can be used to determine the average cost of holding inventory before you sell it. Your holding costs usually consist of storage, labor, security, and the equipment that you use to store the inventory. In most cases, your holding costs are between 25-30% of your inventory value.
Holding Inventory ratio = Holding costs/ Average Inventory Value
18. Revenue Per Visitor
This is an important ecommerce metric that you can use in order to determine the average revenue you generate per visitor. For instance, if your income for the last quarter was $50,000, and you received 200,000 visitors on your ecommerce store, your revenue per visitor will be $0.25 per visitor.
Revenue per visitor = Total income / number of visitors over a specific period of time
19. Net Profit Margin
This is one of the most important ecommerce KPIs that measures your store’s profitability. It’s the margin of profit you generate after making all the deductions, including taxes, operational expenses, and others. Your net profit margin indicates how much money you make after all deductions.
Net profit margin = (Revenue – cost)/ revenue
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Ecommerce KPIs to Measure Marketing
The most commonly measured ecommerce KPIs for marketing are:
20. Website Traffic
Your website traffic refers to the total number of people who visit your ecommerce website.
21. Average Session on the Website
It is the average amount of time a visitor spends on your website during his single visit.
Avg. Sessions = Total Session Duration / Total Number of Session
22. Pageviews per Session
It refers to the average number of website pages a visitor views during each visit. If it takes too many clicks for your visitors to find the right product, then you must revamp your design. A higher pageview per session is not good for your store.
Pageviews per Session = Total Number of Pageviews / Total Number of Visitors
23. Bounce Rate
This ecommerce metric tells you how many visitors leave your website after viewing only one page. Keep this number as low as possible.
Bounce Rate = Total Number of One-page Visits / Total Number of Entries to a Website
24. Email List Growth Rate
Another one of those important ecommerce metrics which requires your keen attention. You can calculate the growth list of your email list with this metric.
Email List Growth Rate = [(Total Number of New Subscribers – Total Number of Unsubscribes) / Total Subscribers ] x 100
25. Email Bounce Rate
It is the percentage of emails sent that were not successfully delivered to the recipient’s inbox. If your email bounce rate is high, you may want to switch to another email hosting service provider.
Email Bounce Rate = (Total Number of Emails that Bounced / Total Number of Emails Sent) x 100
26. Email Open Rate
It is the percentage of email recipients who open your email. This usually has to do with subject lines; come up with catchy subject lines in order to improve your open rate.
Email Open Rate = (Total Number of Unique Open / Number of Total Emails Sent Successfully) x 100
27. Email Click-Through Rate (CTR)
It is the percentage of email recipients who clicked on the links you provided in your email. If your email CTR is low, it’s imperative that you revisit and determine the placement of links in the email template.
CTR = (Total Number of Individuals Clicks / Total Number of Email Opens) x 100
28. Email Conversion Rate
It refers to the email recipients who completed a purchase by clicking through the links provided in your email campaigns. Your email conversion rate indicates the effectiveness of your marketing campaigns in terms of profitability (which is not always the goal for building email lists, by the way).
Email Conversion Rate = (Total Number of Conversions from Emails / Total Number of Emails Sent) x 100
29. Average CTR
It is the total click count divided by the total impression amount. It determines how well your title tags or meta descriptions drive traffic to your website.
Average CTR = Total Number of Clicks That an Ad Receives / Total Number of Impressions
30. Social Media Engagement
It tells you how actively your fans or followers are interacting with your brand on social media. You can measure it by the number of likes, comments, and followers.
31. Subscriber Growth Rate
It tells you how fast your subscriber list is growing.
Subscriber Growth Rate = [(Current Subscribers – Past Subscribers) / Past Subscribers ] x 100
32. Pay-Per-Click (PPC)
It shows you how much you’re spending each time anyone clicks on any of your ads. You can use this ecommerce KPI for search engines as well as for social media advertising campaigns. You can also call it Cost-Per-Click (CPC). It’s one of the most common ecommerce metrics to track.
PPC = Total Advertising Cost / Total Number of Ads Clicked
33. Cost Per Conversion (CPC)
It is the money you spend to turn a visitor into a customer. This includes all advertising costs and placement expenditures. Essentially, it’s the total cost you pay for an advertisement that eventually drives a successful conversion.
CPC = Total Cost for Generating the Traffic / Total Number of Conversions
34. Referral Sources
It helps you identify which sources are forwarding the most visitors to your website. It may be via organic efforts, PPC ads or social media searches.
35. Customer Retention Rate
It is the percentage of customers from a specific time who return to your website and buy. This is one of the most important ecommerce metrics that help you figure out whether customers are returning or not.
Customer Retention Rate = [(Number of Customers at the End of a Period – Total Number of New Customers during That Period) / Total Number of Customers at the Start of That Period] x 100
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36. Conversion by Device Type
It is the total number of conversions specific to a device type, mobile, tablet, or desktop.
37. Marketing revenue attribution
This is an important ecommerce KPI that will help you track how much revenue your marketing is bringing into the company. You can categorize it to determine how much revenue each of your different marketing skills & strategies are bringing, such as content marketing or influencer marketing.
38. Traffic to Lead Ratio
The traffic to lead ratio will give you better insights into how your traffic is performing. Keeping close tabs on the main sources of traffic is very important. The traffic to lead ratio will give you a better idea about pages that have the highest bounce rate, so you can make changes to those. The traffic to lead ratio will also tell you how much of your traffic is actually showing interest in your product or service.
39. Lead to Customer Ratio
This is fairly self-explanatory – it shows how many leads you are able to convert into customers. It’ll also help you understand the performance of your sales team.
Ecommerce KPIs to Measure Customer Service
The most commonly measured ecommerce KPIs for customer service are:
40. Customer satisfaction (CSAT) Score
You can measure this significant ecommerce KPI by customer responses to your surveys. For example: “How satisfied are you with your experience?” The answer comes from a numeric scale from 1 to 5/10.
CSAT = Sum of all Scores / Total Number of Respondents
41. Net Promoter Score (NPS)
This KPI gives insights into your customer relationships by informing you how likely are customers to recommend your brand to someone in their circle. Depending on the score that is given to the Net Promoter question, you can distinguish three categories of people:
- Promoters = respondents giving a 9 or 10 score
- Passives = respondents giving a 7 or 8 score
- Detractors = respondents giving a 0 to 6 score
NPS = % of Promoters – % of Detractors.
42. Customer Service Email Count
It refers to the number of emails your customer support team receives from your customers.
43. Average Complaint Resolution Time
This KPI for ecommerce is the amount of time it takes for your customer support to resolve a customer issue, starting from the point where your customer first reached out to you with a problem. These ecommerce metrics help ensure that your customer service is answering promptly.
Avg. Complaint Resolution Time = (Number of Customer Service Requests – Total Number of Unresolved Request) / Total Number of Requests Received
44. Refund/Return Rate (RR)
If your refund or return rate is too high, it means you’re unable to fulfill customer expectations on your product pages or in your checkout process.
RR = [(Current Value – Original Value) / Original Value] x 100
Ecommerce KPIs to Measure Manufacturing
The most commonly measured ecommerce KPIs for manufacturing are:
45. Cycle Time
It identifies the manufacturing time of a single product. This ecommerce KPI allows you to improve production efficiency with valuable insights.
46. Overall Equipment Effectiveness (OEE)
This KPI provides insights on how well any manufacturing equipment is performing.
47. Overall Labor Effectiveness (OLE)
This KPI is as important as OEE. It provides you information and insights about your machinery, the OLE will inform you how productive is your staff who are operating your machines.
A straightforward ecommerce manufacturing KPI, Yield is the number of products that you’ve manufactured.
49. First Time Yield (FTY) & First Time Through (FTT)
FTY is also referred to as First Pass Yield. It is a quality-based ecommerce KPI which tells you how wasteful your production process is.
FTY = Divide the Total Number of Successfully Manufactured Units / Total Number of Units That Started the Process
50. Number of Non-Compliance Events or Incidents
When it comes to manufacturing, there are a few sets of regulations, licenses, and policies that ecommerce businesses need to comply with. They are generally related to safety, working conditions, and quality, and you must reduce this number to make sure you’re operating within the mandated guidelines.
Ecommerce KPIs to Measure Store Performance Management
The most commonly measured ecommerce KPIs for project management are:
51. Hours Worked
The total number of hours highlights important information about how much time your team is putting into any particular project. Your managers must assess the difference between estimated vs. actual worked hours in order to predict and resource future projects with ease.
Your budget is the amount of money you allocate for your project. You must ensure your budget is realistic. Also, there may come a few minor adjustments to your project budget as per its planning and execution.
53. Return on Investment (ROI)
This ecommerce KPI tells you how much your efforts have earned your online business. This KPI accounts for all of your expenses and earnings. To keep things simple, the higher this number, the better.
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54. Cost Variance
This KPI refers to examining your total cost against your predicted cost. It helps you understand where you need to hold back and where you should invest more.
55. Cost Performance Index (CPI)
The CPI, like the ROI, tells you the worth of your resource investment.
CPI = Earned Value / Actual Costs
Measuring your Ecommerce Success
In order to appropriately measure the success of your online business, there are three primary goals you must keep in focus:
1. Work with Relevant Ecommerce KPIs Only
You must identify the right ecommerce KPIs for your online business. To do so, you need to ask yourself the right questions, such as:
- Which industry do you belong to?
- Are you running a startup or a well-established business?
- What are the business goals for your current stage?
Similar questions will allow you to discover the key ecommerce KPIs for your online business and the specific goals you wish to accomplish.
Pro Tip: Identify One Main KPI (OMM) and choose four to eight supporting KPIs that can assist your OMM. Popular examples of OMMs are:
- Customer Lifetime Value (CLV)
- Cost Per Acquisition (CPA)
- Return on Ad Spend (ROAS)
2. Measure Your Ecommerce KPIs as Accurately as Possible
In a tech-thriving world, where new and better solutions are popping up almost every day, Google Analytics still dominates when it comes to tracking ecommerce website performances. The Google Tag Manager further allows you to measure tailored ecommerce KPI data which comes in handy when analyzing the market position. It allows your non-technical team to conveniently set up data collection without having to log into your online store or mess up the code of your website.
3. Set up Realistic Benchmarks to Track Success
Business milestones or benchmarks are vital to business growth as they provide valuable insights into what strategies are working and which ones aren’t. It further allows you to measure the growth rate for your ecommerce KPIs.
Here’s how you can benchmark your core ecommerce KPIs in six simple steps:
- Identify your long term business goals
- Identify the current performance of your website
- Determine which areas you must focus on to measure
- Identify the right KPIs and KPIs to track the success
- Set up a benchmarking itinerary or schedule
- Perform, measure, tweak, repeat!
How Do I Establish KPIs for E-Commerce Success?
To initiate the process of setting Key Performance Indicators (KPIs) for your e-commerce business, it’s crucial to first outline your objectives. Clearly define your goals and identify the specific areas of your business that have a direct impact on achieving those objectives. Whether your focus is on increasing sales, refining marketing strategies, or enhancing customer service, tailoring KPIs to align with your unique goals is key.
The Bottom Line
Once you’ve set your business goals and KPIs, it is essential for you to monitor and update those KPIs on a regular basis. In order to run a data-driven ecommerce business, it is highly important for you to have data from all the relevant ecommerce KPIs on a single spreadsheet.
For this, you must always use the best tools to track different ecommerce KPIs and utilize them efficiently.
Being an entrepreneur, it is essential for you to view your entire marketing performance under one umbrella and identify precisely what areas require more attention. Your performance should impact your business decisions and you should use the aforementioned KPIs to drive actions.
And on that, we’ll leave you with an overview of eCommerce KPIs.
An Overview of Ecommerce KPIs [INFOGRAPHICS]
Q1. What are ecommerce KPIs?
Ecommerce KPIs, or Key Performance Indicators, are metrics like conversion rate, average order value, and monthly order count that measure the success of various processes in an ecommerce business.
Q2. What is a KPI in Shopify?
A Key Performance Indicator (KPI) in Shopify is a metric such as profit, sales growth, or employee retention that assesses how well a business is meeting its performance targets.
Q3. How do you measure ecommerce success with KPIs?
Track KPIs like Conversion Rate, Average Order Value (AOV), Net Profit, Customer Acquisition Cost (CAC), and Cost per Acquisition (CPA) to gauge and measure ecommerce success.
Q4. What is a KRA in ecommerce?
Key Result Areas (KRAs) in ecommerce are crucial areas for success. Measure performance in each KRA using Key Performance Indicators (KPIs), such as yearly revenue to measure growth.