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E-commerce Strategy

Ecommerce Analytics: The 7 Most Important Ecommerce Metrics to Track

E-commerce Analytics
Written By Louise
On Mar, 10 2020
6 minute read

How successful is your business?

If you aren't tracking your ecommerce metrics, you'll struggle to answer.

You can't achieve the levels of ecommerce success you dream of until you start understanding metrics. To get ahead in a competitive online marketplace, you need to work smarter and make data-informed decisions.

Maybe you feel lost in a sea of endless metrics. Drowning in data, you're trying to measure everything.

We get it - it's overwhelming, unrealistic, and you don't know what to prioritize.

So, in this article, we'll go back to basics.

These are our 7 most important ecommerce metrics to track, to help you get to grips with the data and use it to your advantage.

1. Conversion Rate

What percentage of your visitors go on to become paying customers?

Every ecommerce store should know their conversion rate, and do everything possible to increase it.

This is how to calculate conversion rate:

Conversion rate = number of sales / total number of visitors x 100

Here's an example. Last month, you had 2,000 visits on your site, which resulted in 100 sales.

100 / 2000 (x 100) = 5% conversion rate

5% is a good overall benchmark, but aim high. Imagine how it would feel to be hitting 10% conversion!

Don't be generic. Conversion rate gets super interesting and actionable when you go deeper.

Test conversion rate for individual products:

Product sales / product page visits x 100

Or by channel, such as email:

Number of sales / number of delivered emails x 100

Why it matters:

Conversion rate is one of the first metrics you should calculate for your ecommerce store. It gives a clear picture of your return on investment, and how each marketing channel is performing. As a result, you'll be equipped to decide which channels to focus on and where you need to improve.

ecommerce metrics

Image from Monetate's Ecommerce Quarterly report 

2. Customer Acquisition Cost

Next, how much do you have to spend to obtain a customer?

Divide the total customer acquisition cost over a certain period by the number of customers acquired in that period.

Customer acquisition cost = total marketing costs / total new purchases

Maybe you spent $1,500 in one month on things like web hosting, paid ads, content, design, etc.

That same month, you acquired 120 new customers.

That gives you a customer acquisition cost of 1,500 / 120 = $12.5

Why it matters:

Customer acquisition metrics tell you how much your ecommerce store currently spends on getting new customers, and you can work out if that money is well spent.

In addition, factoring in your margins allows you to take a deeper look at how profitable your business is.

3. Average order value

What is the average amount your customers spend per order?

The following calculation will tell you:

Average order value = Total revenue / number of orders

Why it matters:

Increasing your average order value is a great way to boost profits in your e-commerce store.

There are multiple tactics e-commerce store owners can use to achieve this. Cross-selling, up-selling, offering discounts or free shipping are all great ways to increase your average sale.

What works best depends on your product and industry, so run experiments and track the results.

average order value

Image from Monetate's Ecommerce Quarterly report 

4. Customer Lifetime Value

Besides increasing your volume of customers and average order value, another e-commerce metric to consider is how much your customers are worth throughout their lifetime, and encourage them to return again and again.

Extending your customer lifetime value means better return on investment from customer acquisition.

This metric will vary greatly depending on your price point, and it's certainly a tricky one to work out.

Firstly, you need to discover:

  • Average purchase value (total revenue / number of orders)
  • Purchase frequency (number of orders/unique customers)
  • Customer value (average order value x purchase frequency)
  • Customer average lifespan (time between first purchase to going dormant)

Then, do this calculation:

Customer Lifetime Value = Customer Value x Average Lifespan

Why it matters:

Calculating lifetime value metrics seems like hard work, but knowing how much the average customer spends in total in your ecommerce store will help you make better decisions about how much to spend on acquisition and retention.

Bonus tip: find out who your highest lifetime value customers are. These are your VIPs. Treat them accordingly and think about what you can do to attract more!

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5. Shopping Cart Abandonment Rate

This metric is frustrating and mysterious.

We've all been there. You're shopping online and you get excited. You add products to your cart, but when it comes to the moment of truth, instead of reaching for your wallet, you close the browser.

Why does this happen?

Well, it's complicated. Research from Statista uncovered numerous possible reasons:

Reasons why customers abandon shopping carts

Sometimes, it's completely out of your control. Modern life is full of distractions, and it's just bad luck that your customer clicked away from the cart.

Why it matters:

Cart abandonment is a fact of life for online retailers.

If you have a high rate of cart abandonment, try streamlining your checkout process, and focus on retargeting customers who have abandoned carts.

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6. Website Visits

Imagine you opened a women's fashion boutique in your town. You'd probably think carefully about the design of the shop floor.

You’d want to have:

  • Enticing window display
  • Best-selling products at eye level
  • Space to move comfortably
  • Accessible checkout
  • Sales assistants to help all customers

Why should it be different for an ecommerce business?

Your website is your store, so figure out how your customers behave while they are there.

Some things to look into:

  • Bounce rate - how many people leave your site without engaging?
  • How many new visitors do you get per month?
  • How long do people stay on your site?
  • Where does your traffic come from? (Paid ads, organic search, etc)
  • What do visitors do while they are on your site?
  • Do customers engage with chat features?

Don't forget about mobile compatibility. Monetate's Ecommerce Quarterly report found that mobile conversion rates are lower than desktop, and 53% of consumers abandon sites that take more than three seconds to load.

ecommerce analytics

Image from Monetate's Ecommerce Quarterly report

Why it matters:

Digging into your site metrics to find out what customers like and dislike can help you create an amazing ecommerce experience. An optimized and user-friendly e-commerce store encourages customers to stick around, resulting in more sales.

7. Customer Retention Rate

To find out your rate of customer retention:

  • Take the number of customers you had at the end of a given period
  • Subtract new customers gained during that period
  • Divide that by the number you started with, and times by 100

If you started 2019 with 500 customers. You ended the year with 800, and 400 of those were new customers.

800 - 400 = 400

400 / 500 = 0.8, x 100 = 80% retention rate

Why it matters:

In the fickle world of ecommerce, it's tempting to focus on the metrics which are all about attracting new customers.

Nonetheless, delivering fantastic customer experiences that inspire brand loyalty can set you apart from the crowd. Try to bring customers back time and again, increasing your customer lifetime values.

Start tracking ecommerce metrics today

All of these ecommerce metrics are closely intertwined.

When you understand how they relate to each other, that's when the magic happens.

Now you know what data you should be looking at, why waste any more time?

ecommerce dashboard

We offer an advanced dashboard to track all your ecommerce metrics. Our marketing automation platform shows you the key data you need to boost your sales and profitability.

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