Ecommerce Metrics in Perspective

A Product Manager’s way of driving eCommerce business outcomes!

Whether you track a single business outcome or multiple outcomes (Referred as Output metrics — also called as North Star Metric (NSM) or External metrics), it is important to construct an equation made of Input Metrics (This is otherwise called as Proxy Metric or OMTM — One Metric That Matters or Internal Metrics) that drive the desired business outcomes.

For the sake of brevity and to illustrate how to decide, equate, measure and optimize your input metrics, I will be using Gross Merchandise Value (GMV) as the key business outcome in this article.

Businesses like Shopify, Amazon, Alibaba, JD.com and BuildDirect track GMV as the key output metric. Many eCommerce businesses do not fully trust their growth in GMV considering it does not account for margins, returns and overall health of the business. Yet GMV remains a key output metric, when used effectively. At BuildDirect, a B2B2C and B2C platform for home improvement and flooring products, we use GMV along with a couple of other output metrics to track our performance. However, our tactical, day-to-day product and business decisions are based on specific input metrics that roll up to GMV.

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