eCommerce KPIs - 59 metrics that matter

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Steph Fenton
Published on
30/1/2024
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Have you ever wondered if you're tracking the right eCommerce KPIs to gauge your success accurately?

In this article, we present a definitive list of potential KPIs that you can utilise to measure what matters most to your business. Where necessary, we provide you with additional information on how to track and use them.

Consider this article as a shopping list to select and implement improved tracking methods that aid your eCommerce business tracking and reporting on performance.

Quick links:

Sales KPIs

The following metrics can be used to help you understand the sales performance of your eCommerce business:

  • Revenue
  • Profit
  • Gross Profit Margin
  • Revenue Growth Rate
  • Average Order Value (AOV)
  • Average Revenue per User (ARPU)
  • Product Performance
  • Shipping Cost as a Percentage of Sales

Revenue

Definition: Revenue is the monetary value of all transactions, including product purchases, services, and any additional sources of income directly associated with the core business activities on the eCommerce platform.

Profit

Definition: Profit is the financial gain or positive difference between the total revenue generated from sales and the total costs incurred in the eCommerce business.

It reflects the overall financial success and sustainability of the business.

Cost of Goods Sold (COGS)

Definition: Cost of Goods Sold (COGS) is the direct costs associated with the production or procurement of goods, including manufacturing costs, raw materials, and direct labour.

Gross Profit Margin

Definition: Gross Profit Margin is the percentage of revenue the business retains after deducting the cost of goods sold (COGS).

It is calculated by dividing the gross profit (revenue minus COGS) by the total revenue, providing insight into the profitability of the products or services sold:

(Revenue - COGS / Revenue) x 100

Revenue Growth Rate

Definition: Revenue Growth Rate is the percentage increase in total revenue over a specific period compared to a previous period. 

The formula for calculating Revenue Growth Rate is:

(Current Revenue - Previous Revenue / Previous Revenue) x 100

It is a key performance indicator used to assess the business's expansion and success in attracting new customers or increasing sales to existing ones.

Average Order Value (AOV)

Definition: Average Order Value (AOV) is the average amount of money a customer spends in a single transaction.

AOV is an important metric for understanding customer purchasing behaviour and can be used to formulate strategies to increase sales per transaction.

Product Performance

Definition: Product Performance assesses how well individual products or categories are performing in terms of sales, customer satisfaction, and overall contribution to the e-commerce website's revenue. It involves analysing key metrics such as sales volume, conversion rates, and customer reviews.

Shipping Cost as a Percentage of Sales

Definition: Shipping Cost as a Percentage of Sales is the proportion of total sales revenue spent on shipping costs.

The formula for calculating Shipping Cost as a Percentage of Sales is:

(Total Shipping Costs / Total Revenue) x 100

This metric helps evaluate the impact of shipping costs on overall profitability and can guide pricing and shipping strategy decisions.

The shipping methods you offer will directly impact this metric. For instance, providing free delivery will increase your shipping cost as a percentage of sales, as you bear the full shipping cost. Therefore, implementing delivery thresholds, where free shipping is available for order totals over a certain amount, is a popular technique to enhance this KPI while simultaneously positively influencing the Average Order Value (AOV).

eCommerce Website KPIs

The following metrics can be used to help you understand the effectiveness of your eCommerce website:

  • Website Traffic
  • Conversion Rate
  • Add to Basket Rate
  • Basket Abandonment Rate
  • Abandoned Basket Recovery Rate
  • Upsell / Cross-Sell Rate
  • Payment Processing Time
  • Average Time on Site
  • Website Load Time
  • Customer Journey Analysis
  • User Experience

The most straightforward way to generate data for measuring these KPIs is by installing Google Analytics 4 on your website. When combined with the analytics provided by your eCommerce platform, it should be sufficient for measuring each KPI.

Crucially, Google Analytics 4 will also enable you to measure each of these KPIs based on device, demographics, and location.

Traffic

Definition: Traffic is the total number of visitors to the eCommerce website over a duration of time. Traffic can be measured as users (unique individuals) or sessions (periods of active engagement with the website.) One user may initiate multiple sessions over a duration of time.

Conversion Rate

Definition: Conversion Rate is the percentage of website visitors who complete purchase a duration of time. Conversion rate can be measured by users or sessions. Conversion rate is a fundamental KPI for all eCommerce websites and one of the key gauges of success.

Add-to-Basket Rate

Definition: Add-to-Basket Rate is either the percentage of website visitors who add a product to their basket or, the percentage of sessions that include an add-to-basket event.

Basket Abandonment Rate

Definition: The percentage of visitors who add items to their basket but don’t complete the purchase.

Abandoned Basket Recovery Rate

Definition: The percentage of abandoned baskets that are successfully recovered through follow-up strategies. 

Average Time on Site

Definition: The average duration a visitor spends on an e-commerce website during a single session.

It reflects the engagement level of users and is an indicator of how compelling and relevant the content, products, or services on the site are to the audience. A longer average time on site may signify greater interest and interaction.

Upsell / Cross-Sell Rate

Definition: The percentage of customers who, after purchasing on an eCommerce website, either upgrade to a more expensive product (upsell) or add complementary items to their cart (cross-sell).

It is a metric used to evaluate the effectiveness of the website's strategies in encouraging customers to spend more during the buying process.

Payment Processing Time

Definition: The duration it takes for an eCommerce website to complete the transaction process from the moment a customer initiates a payment until the payment is successfully processed.

It includes the time taken for the payment gateway to authorise the transaction, verify the payment details, and confirm the payment, providing a crucial aspect of the overall customer experience.

Website Load Time

Definition: The amount of time it takes for a web page to fully display its content after a user requests it. It is a critical factor influencing user experience and search engine rankings.

Faster load times contribute to a positive user experience, while slow load times can lead to frustration, increased bounce rates, and potential loss of customers.

Customer Journey Analysis

Definition: Customer Journey Analysis involves the examination and understanding of the entire user experience, from the initial interaction with an eCommerce website to the final purchase and beyond. It includes mapping out the various touchpoints, interactions, and stages a customer goes through during their journey.

While this isn’t a straightforward KPI with a metric, it is trackable, and analysing this journey helps businesses optimise each stage for improved customer satisfaction and conversion.

Customer-centric KPIs

The following metrics can be utilised to understand the composition, vitality, and reliability of your customer base, as well as to gauge how effectively you are serving them as a business:

  • Customer Demographics
  • Customer Lifespan
  • Customer Retention Rate
  • Customer Lifetime Value (CLV / LTV)
  • Customer Satisfaction Score (CSAT)
  • Customer Acquisition Cost (CAC)
  • Customer Churn Rate
  • Customer Service Response Time
  • Net Promoter Score (NPS)

Customer Demographics

Definition: Customer Demographics refer to the quantifiable characteristics of a group of customers. These characteristics typically include various socio-economic factors, such as age, gender, income, education level, marital status, occupation, and geographic location. 

While not directly indicative of performance, customer demographics data is essential for eCommerce businesses. Tracking these demographics aids in categorising and analysing the target audience, ultimately leading to an optimised overall business strategy that aligns with the characteristics of the target market.

Customer Lifespan

Definition: Customer Lifespan is the duration of time a customer maintains a relationship with a business by making repeat purchases.

It is a metric used to estimate the length of time a customer remains engaged and active with a company, measuring the overall longevity of the customer-business relationship. The customer lifespan is a valuable consideration in calculations like Customer Lifetime Value (CLV), helping businesses understand and predict the potential revenue a customer may generate over the entirety of their association with the company.

Customer Retention Rate

Definition: Customer Retention Rate measures the percentage of customers that an eCommerce business successfully retains over a specific period.

It is calculated by dividing the number of retained customers by the total number of customers and multiplying by 100, providing insights into customer loyalty and the effectiveness of retention strategies.

The definition of ‘retained’ will differ from company to company, often triggered by repeat purchases within a set period.

Customer Lifetime Value (CLV)

Definition: Customer Lifetime Value (CLV) is the predicted total revenue that a customer is expected to generate throughout their entire relationship with an eCommerce business.

It takes into account the customer's repeat purchases, average order value, and the expected duration of their association with the business.

CLV is calculated by estimating the total revenue a customer is expected to generate over the entire duration of their relationship with a business. The formula for calculating CLV is:

(Average Order Value x Purchase Frequency x Customer Lifespan) / Customer Retention Rate

Customer Satisfaction Score (CSAT)

Definition: Customer Satisfaction Score (CSAT) is a metric used to evaluate customer satisfaction with a product, service, or overall experience.

Customers are typically asked to rate their satisfaction on a scale, and the average score indicates how well the eCommerce business is meeting customer expectations.

Customer Acquisition Cost (CAC)

Definition: Customer Acquisition Cost (CAC) represents the average cost a business incurs to acquire a new customer.

It includes marketing expenses, advertising costs, and any other expenditures related to attracting and converting a lead into a paying customer.

Customer Churn Rate

Definition: Customer Churn Rate measures the percentage of customers who stop doing business with an eCommerce company over a specific period.

It is calculated by dividing the number of customers lost during that period by the total number of customers at the beginning and multiplying by 100, providing insights into customer attrition.

Customer Service Response Time

Definition: Customer Service Response Time is the duration it takes for an eCommerce business to respond to customer inquiries, requests, or issues.

It is a critical aspect of customer service and can significantly impact customer satisfaction. Response time is typically measured from the moment a customer submits a query to when they receive a response.

Net Promoter Score (NPS)

Definition: Net Promoter Score (NPS) is a metric that gauges the likelihood of customers recommending an eCommerce business to others.

Customers are asked a single question to rate their willingness to recommend on a scale. The NPS is calculated by subtracting the percentage of detractors (those unlikely to recommend) from the percentage of promoters (those likely to recommend).

Orders & Returns KPIs

The following metrics can be utilised to understand your order fulfilment efficiency, particularly important if your eCommerce business’ order volume is growing:

  • Orders
  • Order Processing Time
  • Order Cancellation Rate
  • Pick and Pack Accuracy
  • Fulfillment Accuracy
  • Backorder Rate
  • Delivery Accuracy
  • On-Time Delivery Rate
  • Late Delivery Rate
  • Refund and Return Rate
  • Returns Processing Time
  • Cost of Returns

Orders

Definition: Orders represent the requests made by customers to purchase products or services from an eCommerce business.

Order Processing Time

Definition: Order Processing Time is the duration it takes for an eCommerce business to receive, verify, and fulfil a customer's order, starting from the moment the order is placed through to delivery dispatch.

Order Cancellation Rate

Definition: Order Cancellation Rate is the percentage of customer-initiated order cancellations in relation to the total number of orders.

It reflects the proportion of orders that customers choose to cancel, providing insights into customer preferences and potential areas for improvement.

Pick and Pack Accuracy

Definition: Pick and Pack Accuracy measures the precision with which the correct items are selected (picked) and packaged for shipment.

Accurate picking and packing help prevent shipping errors, ensuring that customers receive the right products in their orders.

Fulfilment Accuracy

Definition: Fulfillment Accuracy encompasses the overall precision in processing and completing customer orders, including aspects like picking, packing, and shipping the correct items in the right quantities.

It is a comprehensive metric that evaluates the entire order fulfilment process.

Fulfilment accuracy is typically calculated by comparing the number of accurately fulfilled orders to the total number of orders processed. Here's a simple formula:

(Number of Accurately Fulfilled Orders / Total Number of Orders Processed) x 100

Backorder Rate

Definition: Backorder Rate is the percentage of orders that cannot be immediately fulfilled due to stock unavailability.

A high backorder rate may indicate inventory management challenges and the need to optimise stock levels to meet customer demand more effectively.

Delivery Accuracy

Definition: Delivery Accuracy assesses whether the items delivered to the customer match the products they ordered.

It measures the precision of the delivery process and helps identify areas for improvement in logistics and shipping procedures.

On-Time Delivery Rate

Definition: On-Time Delivery Rate is the percentage of orders that are delivered within the promised or expected delivery timeframe.

Maintaining a high on-time delivery rate is crucial for customer satisfaction and loyalty.

Late Delivery Rate

Definition: Late Delivery Rate is the percentage of orders that are not delivered within the specified timeframe.

Monitoring the late delivery rate helps identify logistical challenges and areas where improvements can be made to meet delivery expectations.

Refund and Return Rate

Definition: Refund and Return Rate is the percentage of orders for which customers request refunds or initiate returns.

It measures customer dissatisfaction and the need for product returns, providing insights into product quality and customer service effectiveness.

Returns Processing Time

Definition: Returns Processing Time is the duration it takes for an eCommerce business to process a customer's returned items, from the time the items are received to the completion of the return process.

Tracking returns processing time is crucial for customer satisfaction and business efficiency. It ensures timely resolution of returns, enhances the post-purchase experience, and enables businesses to identify areas for improvement in their processes.

Inventory Management KPIs

As your eCommerce business grows you will undoubtedly face inventory management challenges. The following KPIs will help you keep track of your performance and optimise your processes for better efficiency and scalability:

  • Inventory Levels
  • Inventory Value
  • Inventory Turnover
  • Stock Accuracy Rate
  • Stockout Rate
  • Stock Reorder Point
  • Carrying Costs
  • Warehouse Capacity Utilisation
  • Supplier Performance
  • Day Sales of Inventory (DSI)
  • ABC Analysis
  • Obsolete Inventory Rate
  • Inventory to Sales Ratio

Inventory Levels

Definition: Inventory Levels refer to the quantity of goods or products a business holds in stock at a specific point in time.

Maintaining optimal inventory levels is crucial for meeting customer demand while minimising excess holding costs.

Inventory Value

Definition: Inventory Value is the monetary worth of the goods held in stock. 

Calculated by multiplying the quantity of each item by its unit cost, it provides insights into the financial investment tied up in the inventory.

Inventory Turnover

Definition: Inventory Turnover is a measure of how quickly a business sells and replaces its inventory within a specific duration of time.

A high turnover indicates efficient inventory management and product movement.

Stock Accuracy Rate

Definition: Stock Accuracy Rate is the percentage of the inventory that is correctly recorded in the system compared to the actual physical count.

High stock accuracy reduces errors in order fulfilment and enhances overall operational efficiency.

Stockout Rate

Definition: Stockout Rate represents the percentage of times a product is not available when a customer places an order.

Stockouts result in missed sales opportunities. By monitoring the stockout rate, businesses can identify patterns and take proactive measures to prevent lost sales, optimising revenue.

Stock Reorder Point

Definition: Stock Reorder Point is the inventory level at which a new order should be placed to replenish stock before it runs out.

Calculated based on lead time and demand variability, it ensures continuous availability and works to mitigate stockout risks.

Carrying Costs

Definition: Carrying Costs are the expenses associated with holding and storing inventory. 

This includes costs for warehousing, insurance, handling, labour, security, taxes, utilities and obsolescence.

Warehouse Capacity Utilisation

Definition: Warehouse Capacity Utilisation measures the percentage of a warehouse's storage space being utilised.

Efficient utilisation ensures effective use of resources and minimises the need for additional storage facilities.

To calculate warehouse capacity utilisation, you can use the following formula:

(Current Inventory Level / Total Warehouse Capacity) x 100

Supplier Performance

Definition: Supplier Performance assesses the effectiveness and reliability of suppliers in delivering inventory on time and meeting quality standards. Strong supplier performance is essential for a smooth and reliable supply chain.

Day Sales of Inventory (DSI)

Definition: Day Sales of Inventory (DSI) calculates the number of days it takes for a business to sell its entire inventory.

It provides insights into the liquidity of inventory and helps with demand planning. DSI is calculated using the following formula:

( Average Inventory / (Cost of Sold Goods (COGS) / Number of Days) )

ABC Analysis

Definition: ABC Analysis categorises inventory items into three groups (A, B, and C) based on their importance.

ABC analysis is not a KP itself but is a methodology used to categorise items based on their importance, allowing businesses to prioritise their focus and resources effectively. ABC analysis is a valuable tool for strategic inventory management and is often used in conjunction with various KPIs.

Obsolete Inventory Rate

Definition: Obsolete Inventory Rate is the percentage of inventory that is considered obsolete or unsellable.

Minimising obsolete inventory is vital for reducing holding costs and maintaining a healthy cash flow.

Inventory to Sales Ratio

Definition: Inventory to Sales Ratio evaluates the relationship between the value of inventory on hand and the total sales.

It helps assess how well inventory levels align with the pace of sales, guiding replenishment decisions.

Marketing KPIs

Finally, we have marketing-focused KPIs. You can use these to measure your marketing performance, keep your campaigns within budget and test and adapt your strategies for long-term success.

  • Return on Advertising Spend (ROAS)
  • Customer Acquisition Source
  • Click-Through Rate (CTR)
  • Cost per Click (CPC)
  • Open Rate
  • Reach
  • Engagement
  • Search Engine Rankings
  • Audience Growth

Return on Advertising Spend (ROAS)

Definition: ROAS is a metric that calculates the revenue generated for every pound spent on paid advertising - primarily Google Ads and paid social through platforms like Facebook, Instagram and TikTok.

It provides a simple, clear insight into the bottom-line effectiveness of advertising campaigns and is a fundamental part of your marketing reporting.

Customer Acquisition Source

Definition: Customer Acquisition Source identifies the channels or platforms through which customers discover and engage with a business, whether that be the search engine, social media or elsewhere.

Understanding acquisition sources assists in optimising marketing efforts and allocating resources effectively.

Click-Through-Rate (CTR)

Definition: CTR is the percentage of people who click on a piece of advertising content after seeing it - this could be a paid advert, a social media post, an email campaign - anything that is designed to drive traffic back to the eCommerce website.

It is calculated by dividing the number of clicks by the number of impressions and is a measure of the ad's relevance and attractiveness to the audience.

Cost-per-Click (CPC)

Definition: CPC represents the cost incurred by the advertiser each time a user clicks on their advertisement.

It is a fundamental metric in paid online advertising, helping businesses assess the cost-effectiveness of their campaigns.

Reach

Definition: Reach is the total number of unique users who see a particular piece of content or ad. The common metric used to calculate reach is impressions.

It provides insights into the potential audience exposure and the scope of a campaign's influence.

Engagement

Definition: Engagement encompasses various interactions users have with online content, including likes, shares, comments, and clicks.

Measuring engagement helps businesses understand how well their content resonates with the audience.

Search Engine Rankings

Definition: Search Engine Rankings reflect a website's organic position in search engine results for specific keywords.

Higher rankings for the right keywords increase visibility, traffic, and the likelihood of attracting potential customers. Various online tools allow a business to track their Search Engine Rankings, including Semrush, Ahrefs and Moz.

Audience Growth

Definition: Audience Growth measures the increase in the number of followers, subscribers, or users engaging with a brand across various channels.

Positive audience growth indicates a widening customer base and expanding market reach.

In the ever-evolving landscape of online commerce, adaptability and responsiveness to data-driven insights will be the pillars of success. By selecting relevant KPIs, you can ensure that your business is hyperfocused on measuring and achieving the outcomes that directly contribute to your overall objectives.

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