Starting an online store can be an exciting endeavor, but once that store is up and running, how do you actually gauge whether it’s successful? As an ecommerce marketer, you need to closely monitor key metrics and analytics to understand what’s working, what’s not, and how you can optimize your strategy going forward.
In this article, I’ll share the top 10 ecommerce metrics I believe are most essential for any digital retailer to track. These will provide you with invaluable insights into your store’s health and growth.
Traffic Metrics
Driving traffic to your online store should be a top priority. After all, you can’t make any sales if people aren’t visiting your site. Here are two key traffic metrics to keep an eye on.
1. Sessions
This metric refers to the number of individual browsing sessions on your site over a given time period. It encompasses the activities of all users during each session.
Monitoring sessions helps you identify spikes and dips in traffic so you can better understand external factors driving people to (or away from) your site. I like to track this metric on a daily and weekly basis.
2. Organic Traffic
This subset of traffic refers to visits coming from unpaid search engine results. It gives you insight into how well your SEO efforts are performing.
Organic traffic is valuable because it means people are finding your brand and products through search. I recommend tracking which keywords and landing pages are bringing in the most organic visits so you can refine your SEO approach accordingly.
Sales Metrics
Now let’s get into the real meat – sales data. These metrics allow you to assess the health of your revenue streams.
3. Conversion Rate
Your conversion rate is the percentage of website visitors that take a desired action (typically making a purchase). It’s one of the most fundamental ecommerce metrics you should be tracking every single day.
To calculate it, simply divide your total number of orders in a period by the total number of site sessions. Then multiply that number by 100.
Conversion Rate = (Number of Orders / Number of Sessions) x 100
Knowing your conversion rate allows you to set goals for improvement and see the revenue impact of tests and changes you make over time. Every fractional increase you achieve can lean do major success in the long term.
4. Average Order Value (AOV)
While conversion rate shows you how many customers buy, AOV reveals how much revenue you earn from an average order.
Calculate it by dividing your total revenue by the number of orders placed.
AOV = Total Revenue / Number of Orders
I monitor AOV weekly or monthly. Look at this metric over longer periods to spot positive or negative trends. AOV can heavily influence your overall sales, so keeping an eye on it is key.
5. Sales Tax Collected
This is a unique one I learned many brands don’t think much about. For ecommerce businesses that collect sales tax, this is an important metric that directly impacts your revenue. Make sure to track how much tax you collect each month.
Depending on where your business operates and your products, tax rates and rules can change periodically. Auditing this metric ensures you are collecting (and remitting) the right amounts as regulations evolve.
6. Refunds Issued
To get a clear picture of true revenues, you need to subtract refunds issued to customers. No ecommerce store is immune to product returns and order cancellations.
Monitor refund frequency and volume each month. This can help identify quality issues with products or flaws in fulfillment and shipping that may be prompting higher returns.
Customer Metrics
Your customers are the lifeblood of any business. I believe these metrics offer valuable clues into how shoppers engage with your brand.
7. Repeat Purchase Rate
This metric looks at what percentage of customers return to buy from your store again, versus one-time shoppers.
A higher repeat rate signals you’re effectively converting customers into loyal patrons. Calculate it by dividing total repeat customers by total customers over a given timeframe.
I like to analyze this monthly. Growing your repeat rate over time is a great sign of improving customer satisfaction.
8. Email List Sign Ups
If shoppers are signing up for your email list, it means they want to hear from you and engage further with your brand.
Set up calls to action (CTAs) across your site and invite visitors to join your list. Track daily or weekly sign ups to quantify how well those calls-to-action perform.
You can also measure open and click-through rates for your emails. Use all this data to refine your promotions and offers.
9. Social Media Followers
Similar to email sign ups, monitoring followers on your social channels like Facebook and Instagram shows customer interest in your brand.
Pay attention to which platforms drive the most followers and how follower numbers change over time. Offering exclusive deals or promotions just for followers can also help ramp up followers.
Operational Metrics
These internal metrics relate to day-to-day operations that enable you to meet customer demand.
10. Inventory Turnover
This supply chain metric looks at how efficiently you sell through products. It’s calculated by dividing cost of goods sold by average inventory over a period of time.
Inventory Turnover = Cost of Goods Sold / Average Inventory
A higher turnover ratio is ideal – that means you’re quickly moving inventory. A low turnover could mean excess stock or poor sales.
Regularly monitor this metric to properly size your inventory levels and reduce potential waste.
In Closing
Tracking the right ecommerce metrics helps you spot issues, capitalize on opportunities, and ultimately make smarter decisions to fuel your online store’s growth.
Start by picking 1-2 metrics within each category above to monitor on a regular basis. Over time you’ll gain deeper insights into your customers and operations. Don’t let your data go to waste – put it into action to drive continual improvement.
Here’s a quick recap of the top 10 ecommerce metrics covered:
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- Sessions
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- Organic traffic
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- Conversion rate
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- Average order value
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- Sales tax collected
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- Refunds issued
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- Repeat purchase rate
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- Email list sign ups
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- Social media followers
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- Inventory turnover
Now you’re armed with the knowledge of what metrics to track and why they matter. Trust the data to guide your ecommerce marketing efforts toward higher profits and happier customers.