Top Seven Essential Ecommerce Key Performance Indicators (KPIs) To Track

This article is Written by Ricky Hayes is the Co-Founder and Head of Marketing at Debutify.

Implementing strategies is not enough to steer your eCommerce store towards success. The applied strategies should be regularly monitored, and the outcomes produced by them must be monitored to check if they yielded the desired results or not.

An eCommerce business can easily track its performance with the help of a wide range of KPIs.

Ecommerce KPIs are like milestones that a business can use to determine the performance and results of the strategies applied by the company to achieve its objective.

Key performance indicators support diverse objectives of the business, and they are tracked regularly. Some common examples of KPIs include the rate of shopping cart abandonment, the average bounce rate of the website, the average value of orders, etc.

The primary purpose of eCommerce metrics is to help an entrepreneur get an insight into where his business stands and gauge whether the company is headed on the path to success or failure.

By understanding the position of the business and its various areas, a business can either continue to implement the same strategies or improvise its techniques to reap better results.

There are numerous eCommerce KPI benchmarks that businesses can use to monitor and track the performance of their plans and strategies for the different areas of the business, such as marketing, finance, sales, human resources, etc.

Which Ecommerce KPIs Should You Track?

Ecommerce KPI benchmarks are not limited to one or two, no. There is a long list of KPIs that businesses use as per the requirements and goals of their business.

Before discussing some of the important eCommerce KPIs, it is essential to highlight that not all the KPIs are meant for each eCommerce business. For example, an online store that sells luxury diamond jewelry will not use the metric of cost per conversion. Why? Because the eCommerce business is earning a high profit on the sale of each piece of jewelry, and the lifetime value for a new buyer is high.

The selection of the essential key performance indicators for your business depends on your business’s needs and the goals you want to achieve. Therefore, you must ponder upon the following factors before finalizing which KPIs to monitor:

1. Your company’s goals
2. Departmental goals
3. Growth stage of your company

Moreover, you must select actionable and attainable KPIs for your business, which is the main focus of today’s article.

Below we have mentioned the top seven eCommerce KPIs to track for improving your eCommerce business’s sales, profit, and customer satisfaction.

Top Seven Essential Ecommerce Key Performance Indicators (KPIs) To Track

1. Website Traffic

Website traffic is the most common KPI tracked by entrepreneurs. The more traffic a website gets, the greater chance of converting more visitors into customers.

However, a website that receives massive traffic doesn’t necessarily mean high conversion, increased sales, and a rise in profit. If a website gets 100,000 visitors daily, it doesn’t imply that it will sell to every visitor that comes to their store.

If you wonder why website traffic is an important performance indicator if it doesn’t necessarily mean increased sales or revenue, don’t worry; we have got you covered.

The main objective of increasing website traffic is not necessarily to boost sales. Instead, it is to increase brand awareness and let your prospective audience know what products you sell at your eCommerce store.

When people visit your website, they might explore the products you have in store, read the blogs you have published, view the customers’ testimonials, etc. It will enable them to learn more about your business, and they will remember your brand if they want to purchase the products you deal in.

Track your eCommerce business’s website regularly to check how many people visit your website, at what time the website traffic spikes or dips, and from which sources the audience is coming to your website. Did the visitors find you on search engine result pages, through social media, or by another website or blog? Monitor the analytics of your traffic to understand the pattern of your website’s traffic.

2. Conversion Rate

The percentage of visitors on your website that turns into customers is known as the website’s conversion rate. It is again one of the most extensively used essential KPIs by eCommerce businesses.

A conversion rate means that your website has succeeded in persuading people to purchase something from the store. On the other hand, a low percentage might signify that people find it hard to trust you and become your customers. It can also imply that the traffic you are receiving on your website doesn’t fit the persona of your prospective buyers.

Knowing how many visitors become your customers can help you curate and implement the strategies to improve the conversion rate and effectively target visitors in the different phases of the sales funnel.

Let us clear one thing here; a low conversion rate doesn’t necessarily mean your website is not performing well. For instance, the conversion rate of an eCommerce store that sells low-priced items will be high compared to selling high-priced gadgets.

Ensure that you keep in view your goods’ prices, the average conversion rate in the industry, and the conversion rate of the rival businesses dealing in the same niche before you implement strategies to boost your conversion rate.

3. Bounce Rate

The website’s bounce rate refers to the percentage of people who exit the website after landing on it from the search engine result page or through any other website.

This KPI is used by all eCommerce businesses irrespective of their size, scale, and industry in which they operate. If a high percentage of visitors exit the website, it means that the bounce rate is high. Multiple factors are responsible for a high bounce rate. The visitors may quit your website because they failed to find the content and products they wanted, slow loading pages, or long and tiring checkout process.

However, the critical factor responsible for a high bounce rate is the failure to optimize content for relevant keywords. If your content and products are optimized for the words that people don’t search for or the keyword you selected is broad, your site will not receive organic traffic, and hence, the bounce rate will remain high.

If the bounce rate of your website is high, make sure to use highly focused keywords to enable your prospective customers to find you, optimize your page speed, and provide an excellent user experience to your visitors to minimize the bounce rate.

4. Time To Purchase

This KPI enables the business to determine the time visitors take to turn into customers. An eCommerce business can have diverse visitors when it comes to conversions. Some visitors might purchase the product on their first visits. Some might visit the website twice or thrice before placing an order, and some visitors might never buy anything from the website.

Time to purchase KPI depends on the type of eCommerce business and the goods it deals in. If the website sells gold jewelry, it will have a high time to purchase as the visitors will not buy an expensive product on their first visit to a store. Contrary to this, an eCommerce store that sells stationery, or books, will have low time to purchase as the items in the store are neither expensive nor do they require any extensive research before finalizing their purchase.

Understanding the average time to purchase can help the entrepreneur curate intelligent marketing strategies to lure the prospective audience to make an impulse purchase. For instance, the eCommerce website can offer discounts, gifts, installment payments, or easy returns and refunds to attract visitors to turn into customers.

5. Cart Abandon Rate

Tracking cart abandonment rate is another important KPI to measure how many visitors complete the checkout process and how many of them quit the website after adding goods to the carts.

Cart abandonment doesn’t depend upon the structure, design, or functionality of the website; neither is it related to the lack of relevance of content or products. The reason for the high rate of cart abandonment lies in the checkout phase of the website.

The following reasons are responsible for a high cart abandonment rate:

1. Hidden charges
2. High Shipping Charges 
3. Long checkout procedure 
4. Limited channels of payment 
5. Condition of creating an account for checking out of the website

By monitoring this KPI carefully, a business can identify the problems or shortcomings that incite cart abandonment. It can take remedial measures to rectify the issues and provide a seamless and smooth checkout process to its customers.

For example, a business sees a high percentage of buyers abandon their carts because of the high shipping rate. It can reduce the shipping charges, waive them off entirely to reduce the cart abandonment rate. Similarly, if the channels of payment are limited on the website, in that case, a business can offer multiple channels to its customers to transfer the amount through the channel which they are comfortable using.

6. Repeat Visit 

The eCommerce stores whose time to purchase is high will have an increased number of repeat visitors. It is because the people visit the website again to make up their minds about buying the goods.

However, repeat visitors aren’t only prospective customers; it can be your current customers who return to your store to purchase the goods.

If an eCommerce store sells low-priced items such as t-shirts, jeans, caps, etc., it may have a high repeat visit rate which also implies that the brand has succeeded in winning the loyalty of its customer.

The more repeat visits a business has, it stands the better chance to establish a long-term relationship with its buyers. On the other hand, if the company has few repeat visits, it implies that the products do not offer much value to bring the customer back to the store.

Track your repeat visits to offer more value at your store to attract more people at your eCommerce store.

6. Product Reviews

Product reviews are one of the most critical eCommerce KPI benchmarks. Product or business service reviews have a significant impact on the company’s reputation and marketing. It has become a typical behavior of the buyers to read the product’s online reviews before buying it.

If a brand has received good reviews, more people will be attracted to it and become its customers. On the flip side, negative reviews scare away the prospective audience, and they change their mind about buying the products.

Did you know, 80% of consumers claimed that online reviews influence their buying decision?

Hence, businesses need to monitor the number and content of the reviews published by customers online.

Suppose you have received a negative product review, then make sure to handle the matter properly and resolve the customers’ issue. Talk to them, understand their issue, and offer a feasible solution to their problem. Your customer care service might change their negative reviews to positive ones.

7. Repeat Visit 

The eCommerce stores whose time to purchase is high will have an increased number of repeat visitors. It is because the people visit the website again to make up their minds about buying the goods.

However, repeat visitors aren’t only prospective customers; it can be your current customers who return to your store to purchase the goods.

If an eCommerce store sells low-priced items such as t-shirts, jeans, caps, etc., it may have a high repeat visit rate which also implies that the brand has succeeded in winning the loyalty of its customer.

The more repeat visits a business has, it stands the better chance to establish a long-term relationship with its buyers. On the other hand, if the company has few repeat visits, it implies that the products do not offer much value to bring the customer back to the store.

Track your repeat visits to offer more value at your store to attract more people at your eCommerce store.

Final Words…

ECommerce KPIs enable businesses to understand where they stand and what areas need improvement to head your business towards success.

By tracking the appropriate KPIs, a business will be better positioned to rectify the shortcomings in its policies and strategies and implement tips and tricks to achieve its goal.

What other KPIs do you think are essential to track? Enlighten us in the comments below.