The e-commerce industry is booming. Global e-commerce sales exceeded an incredible $5.7 trillion in 2022! That means there are more opportunities for you to grow than ever. However, you must measure your store’s performance, or you’ll fall behind.
There are mountains of e-commerce companies that don’t measure any KPIs or milestones. How do they know they are growing? They don’t.
That’s why you must ensure that you have clear key performance indicators. You analyze These metrics regularly to ensure your e-commerce business is growing consistently.
Five eCommerce KPIs to Measure For Growth
Keep reading if you’d like to learn the five most important metrics to track for e-commerce growth.
Many e-commerce entrepreneurs pay attention to vanity metrics like users and social media followers. While they have their merit, it doesn’t matter how much traffic you drive if most of it doesn’t convert. That’s why tracking your store’s conversion rate is critical.
The conversion rate is simply the number of users visiting your store and purchasing. If 100 users come to your store on a single day and three check out, that’s a 3% conversion rate.
So, how can you begin improving your conversion rate? There are many ways. Try the following strategies to see for yourself:
- Use a heatmap tool to determine where users click and interact with your store. This helps determine what elements are distracting customers and what products they like.
- Pay attention to what products sell the most and market those more.
- Refine your buyer’s persona to improve targeting in PPC, marketing, and other advertising campaigns.
- Use high-quality images that show off every detail of products.
- Offer free shipping and discount codes to entice customers to check out.
Average order value
Imagine increasing your e-commerce store’s revenue without driving more traffic or conversions. This can become a reality by improving the average order value. This measures how large a typical order is from your business.
Let’s say that the average order of your business is $100. If you increase that to $125 and you make 100 sales per month, suddenly, you’re earning $12,500 from $10,000.
E-commerce stores can increase their average order value through a variety of means. The first way to do this is by simply increasing the price of products. If you decide to, carefully observe how it affects sales. You may find that sales remain steady, yet you’ve instantly increased revenue.
Secondly, offering bundled deals can boost average cart value. This can be accomplished through grouping similar products and offering them as a single product. They are often discounted, as well.
Lastly, e-commerce store owners can take advantage of discounts and shipping offers. This encourages customers to add more to their carts since they will save on their total later.
How many of your customers return to purchase from you again? If you don’t know the number off the top of your head, you need to analyze it quickly. It’s easily one of the most important metrics for an e-commerce business.
While it’s great that you can drive new customers to your store, wouldn’t it be nice to have customers return in the future? You don’t have to win them over via marketing or advertising as they already enjoy what you sell and trust your brand.
You can improve the number of customers who return to your store through great customer service. If you treat them positively and professionally while satisfying their buying needs, they’ll be much more likely to come back again.
Secondly, e-commerce stores can invest in retargeting ads targeting customers who shopped from you. This is normally done via a Facebook pixel, which you can add to your store at the click of a button.
Did you know that 69.57% of carts become abandoned later? That means nearly a third of customers never finish checking out. Think about all of the money you’re losing!
It doesn’t have to be that way, though. You can improve the number of abandoned carts with an abandoned cart recovery strategy. You take these steps to contact customers to remind them that they haven’t finished checking out.
Most e-commerce platforms have built-in cart recovery systems which you can customize. The key is not to be overly pushy. We suggest sending a recovery email one to two days after it’s been abandoned. You can increase conversion rates by offering a special discount or coupon to entice them to come back.
Customer lifetime value
What is a customer worth to you over their lifetime of shopping from your business? If you could increase this value, would it drastically improve revenue? This is important to understand because it shapes marketing and advertising budgets.
For example, if you know that a customer is worth $1,000 over time, you would be more willing to spend hundreds to acquire them as it will have a good ROI.
This metric can be improved by building relationships with customers through email marketing. Having them subscribe to your newsletter allows you to keep in touch over the long term. As a result, you improve the odds they will continually shop from you.
E-commerce stores can also collect customer feedback via forms, surveys, and questionnaires to enhance user experience. Customers enjoying shopping in your store will be more likely to return, increasing their lifetime value.
Wrapping up e-commerce KPIs
The opportunities for growing eCommerce are more plentiful than ever. However, you must be proactive or miss out on them. It would be best if you began tracking the major KPIs we touched on today.
Analyzing and testing these indicators will help you increase revenue, customer lifetime value, and the user experience of your store.
Carmine Mastropierro is a freelance copywriter who has written for Neil Patel, GoDaddy, Smart Insights, and other publications.