E-commerce is growing faster than you can imagine and it depends on various factors. The growth of the global e-commerce market is being driven by a number of factors, like the increasing penetration of the internet, the popularity of mobile devices, and the rising income of consumers in emerging markets. The global e-commerce market is growing rapidly, and it is expected to continue to grow in the coming years. According to a study by IMARC Group, the global e-commerce market size was valued at US$ 16.6 trillion in 2022. It is expected to grow at a CAGR of 27.43% during 2023-2028 and reach US$ 70.9 trillion by 2028.
According to a study by Statista, the Asia Pacific region is expected to account for 46.3% of the global e-commerce market share in 2022. China is the leading e-commerce market in the world, with total online sales exceeding US$ 2.8 trillion in 2022. The United States is the second largest e-commerce market in the world, with total online sales of US$ 1.1 trillion in 2022.
In order to effectively monitor the performance of your eCommerce business, it’s essential to identify and track the key performance indicators (KPIs) that are most important to your success.
When we play a game, we have ways to keep score, right? Similarly, in the business world, they keep score using something called Key Performance Indicators (KPIs). But it’s not always easy to decide which scores are most important. To figure that out, a business needs to know what it wants to achieve. These aims should be clear, possible to measure, reachable, relevant, and set within a timeframe (this is often called SMART).
For instance, if a business wants to make more money, it might keep score of things like the average amount customers spend per order, the rate at which people visiting its online store actually buy something, and the total money a customer spends over their lifetime. But if the business wants to make its customers happier, it might look at scores like how likely customers are to recommend the store to others, the percentage of customers who come back to shop again, and how quickly customer service issues are resolved.
Each online store will have different goals and challenges, so they will look at different scores. By picking the right scores and checking them regularly, businesses can understand how well they’re doing, find areas to get better and make decisions based on facts to improve their operations and grow. Here, we’ve put together a list of the 50 most important scores or KPIs for online businesses to check, with easy explanations for each.
10 Most important KPIs for e-commerce businesses
- Revenue: The total amount of money generated by the business.
- Conversion rate: The percentage of visitors who make a purchase on the website.
- Average order value (AOV): The average value of each order placed on the website.
- Customer acquisition cost (CAC): The cost of acquiring each new customer.
- Customer lifetime value (CLV): The predicted revenue generated by a single customer over their lifetime.
- Gross margin: The percentage of revenue that remains after deducting the cost of goods sold.
- Cart abandonment rate: The percentage of visitors who add items to their cart but do not complete the purchase.
- Return on ad spend (ROAS): The revenue generated per dollar spent on advertising.
- Net promoter score (NPS): A measure of customer satisfaction and loyalty.
- Email open and click-through rates: The percentage of subscribers who open and click through email campaigns.
Additional 40 Important KPIs for E-commerce
- Traffic sources: The sources of website traffic, such as organic search, paid search, social media, etc.
- Bounce rate: The percentage of visitors who leave the website after viewing only one page.
- Time on site: The average amount of time visitors spend on the website.
- Pages per session: The average number of pages viewed by each visitor.
- Exit rate: The percentage of visitors who leave the website after viewing a particular page.
- New vs. returning visitors: The percentage of visitors who are visiting the website for the first time vs. returning visitors.
- Product performance: The performance of individual products in terms of sales, revenue, and profit margin.
- Inventory turnover: The rate at which inventory is sold and replaced.
- Cost per acquisition (CPA): The cost of acquiring a new customer through advertising.
- Cost per click (CPC): The cost of each click on a paid search ad.
- Click-through rate (CTR): The percentage of people who click on a paid search ad.
- Impressions: The number of times a paid search ad is displayed.
- Search engine rankings: The website’s rankings on search engines for relevant keywords.
- Social media followers: The number of followers on social media platforms.
- Social media engagement: The level of engagement with social media content, such as likes, comments, and shares.
- Referral sources: The sources of traffic that come from other websites.
- Customer satisfaction: The level of customer satisfaction as measured through surveys or other feedback mechanisms.
- Abandoned cart recovery rate: The percentage of abandoned carts that are recovered through follow-up emails or other methods.
- Shipping and fulfillment metrics: Metrics related to shipping and order fulfillment, such as delivery time, order accuracy, and shipping cost.
- Average revenue per user (ARPU): The average amount of revenue generated per user.
- Mobile conversion rate: The percentage of visitors who make a purchase on a mobile device.
- Mobile traffic: The percentage of website traffic that comes from mobile devices.
- Site speed: The speed at which the website loads and responds to user actions.
- Customer reviews and ratings: The average rating and number of reviews for products and the overall website.
- Customer service metrics: Metrics related to customer service, such as response time, resolution time, and customer satisfaction.
- Cost of goods sold (COGS): The cost of producing and acquiring products sold on the website.
- Gross profit: The total profit generated after deducting the COGS.
- Net profit: The total profit generated after deducting all expenses from revenue.
- Inventory accuracy: The accuracy of inventory levels recorded in the system compared to actual inventory levels.
- Customer retention rate: The percentage of customers who make repeat purchases.
- Repeat purchase rate: The percentage of customers who make more than one purchase.
- Upsell and cross-sell rates: The percentage of customers who add complementary or higher-priced products to their purchase.
- Refund rate: The percentage of orders that are refunded to customers.
- Customer lifetime revenue: The total revenue generated by a single customer over their lifetime.
- The average revenue per email (ARPE): The average revenue generated per email campaign.
- Average profit margin per product: The average profit margin for each product sold.
- Cost of customer service per order: The cost of providing customer service for each order.
- Return on investment (ROI): The ratio of revenue generated to the cost of investment, such as advertising or marketing campaigns.
- Marketing qualified leads (MQLs): The number of leads who have shown interest in the business through marketing efforts.
- Sales qualified leads (SQLs): The number of leads who have been qualified as potential customers through sales efforts.
Tracking KPIs is crucial for e-commerce businesses to stay competitive and succeed in today’s fast-paced digital environment.
Do Businesses need a good data platform to track KPIs?
Yes, A good data management platform is essential for e-commerce businesses that want to effectively manage and utilize their customer data. A data platform that enables the seamless integration, management, and analysis of data across multiple sources and applications. Also, read What is Retail Analytics? How it Helps Achieve Customer 360
By leveraging a data fabric, e-commerce businesses can gather and integrate data from various sources, such as customer transactions, web analytics, and social media, to create a comprehensive view of their performance. Make sure you analyze something like All in one data platform.
Once the data is integrated into the data Platform, it can be analyzed using various tools and techniques to identify key performance indicators (KPIs) for the e-commerce business. For example, KPIs such as conversion rate, average order value, and customer lifetime value can be identified by analyzing customer transaction data. Similarly, KPIs such as website traffic, bounce rate, and click-through rate can be identified by analyzing web analytics data.
SCIKIQ Retail solutions can help e-commerce businesses to grow by providing real-time insights into performance, improving customer insights and operations, increasing revenue, enabling better decision-making, and enhancing the customer experience. By integrating, managing, and analyzing data from various sources, e-commerce businesses can optimize their marketing and sales efforts, streamline operations, and make data-driven decisions to drive growth and gain a competitive edge.
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