Do you know what successful ecommerce businesses have in common? It’s not a massive catalogue of products, or how often they offer deals and discounts to their customers. It’s the fact that they track and analyse their shops’ performance and all the important actions that customers take on their sites.
Why is this important? Because you can’t improve your ecommerce website and your customers’ shopping experience if you don’t know what’s happening on your website. And the only way to find that out is to keep a close eye on metrics and data that reveal what you’re doing right (and wrong).
This helps you to understand every step a customer takes on their way to a purchase and make better decisions to grow your sales and revenue.
Don’t know which numbers to look at to measure your online shop’s performance? We’ve got your covered with the four key ecommerce metrics to focus on to help you grow your business.
What is a metric?
Metrics are what you measure. They’re quantifiable measures used to track and measure the performance of a website. Some examples of ecommerce metrics range from traffic sources (where your shoppers come from) to cart abandonment rate (the percentage of visitors who walk away from their carts instead of clicking to buy).
How do you go about tracking and measuring ecommerce metrics? Just go to your Google Analytics (GA) account to start looking at your data.
If you’re not familiar with GA or don’t already have an account set up, here’s a beginner’s guide to Google Analytics that explains everything from how to set it up on your website to what kind of information you can expect to find on the platform.
Now let’s look at the key ecommerce metrics every shop owner needs to monitor.
It’s important to understand your traffic, meaning how many people visit your online shop and also how they found it, meaning where they came from (social media channels, search engine results, or a blog or website).
Why is this important? Because when you have a better understanding of how people find your ecommerce website, you’ll know which channels are working well to drive more prospects to your store. As a result, you’ll know where to invest more time and resources to get better results.
In addition, if you find that your traffic is low or dropping, you’ll know to prioritise attracting more people to your site. Read this post to learn how to promote your ecommerce website and get more people to your online shop.
2. Conversion rate
Your shop’s conversion rate shows you how many of your visitors are buying from you. It’s calculated as the percentage of people who make a purchase out of the people who visit your online shop.
So, if 100 people visited your website this week and 5 people made a purchase, your conversion rate for the week is 5%.
If you want to boost your conversion rate and entice more visitors to make a purchase, here are a few things you can try:
3. Average order value
Your average order value refers to the average amount of money that each customer spends when placing an order on your site. You can calculate your average order value by dividing your store’s total revenue by the number of orders taken.
For example, if you have 100 orders on your store and a total revenue of £1,500, this means that your average order value is £15.
This is an important metric to track as it allows you to find missed opportunities and come up with ideas on how to entice people to spend more on every purchase they make.
So, what can you do to improve this metric? Here are a few ideas:
- Set a minimum purchase amount for free shipping eligibility.
- Offer discounts or gifts and add a minimum spend that customers need to meet to be eligible for the discount.
- Provide product recommendations.
- Upsell or cross-sell complementary products.
- Offer bundle deals.
Read our post on six tactics to increase your shop’s average order value to learn more about these tactics and get some examples and ideas on how you can implement them on your ecommerce website.
4. Shopping cart abandonment rate
This metric refers to the percentage of shoppers who add products to their cart but leave your site without finalising their purchase.
Shopping cart abandonment is frustrating but it happens on every ecommerce site out there. In fact, almost 70% of online shopping carts are abandoned.
So, what can you do to bring down your shopping cart abandonment rate?
The most successful ecommerce websites make business decisions based on metrics, data and numbers. That’s because the only way to improve shoppers’ experience on a shop is to first understand what works and what doesn’t. Make sure to track and analyse these four essential metrics to see how your online shop’s performing and what steps you can take to increase your sales and revenue.