Top Ecommerce KPIs Every Business Owner Should Track

As the owner of an ecommerce business, you probably hear the term “KPI” quite often. But what exactly are KPIs, and why are they so important for your online store? In this blog, we’ll explain ecommerce KPIs in simple terms and show you how tracking the right ones can help your business grow.

What Are Ecommerce KPIs?

KPIs, which stand for “Key Performance Indicators,” are numbers or metrics that show how well your business is doing. They are like the vital signs of your online store, just like how you check your heartbeat or blood pressure to know if you’re healthy. If you look at your KPIs, you can see how healthy your business is. You can measure progress, see what’s working, and find places to improve by keeping track of them.

Why Tracking KPIs is Important for Your Online Store

Running an ecommerce store without tracking KPIs is like driving a car without a speedometer. You might be moving, but you have no idea if you’re on the right track. KPIs tell you what’s working and what’s not. They help you make better decisions by giving you a clear picture of your store’s performance.

For example, if you notice your sales are dropping, KPIs can show you if it’s due to fewer visitors, lower conversion rates, or abandoned shopping carts. With this information, you can take specific actions to fix the problem and grow your store.

Top Ecommerce KPIs Every Business Should Track

Not all KPIs are equally important for every store, but here are some of the most essential ones you should consider tracking:

Sales Performance KPIs

Conversion Rate (CR)

The Conversion Rate shows the percentage of visitors who make a purchase. For example, if 100 people visit your online store and 5 of them buy something, your conversion rate is 5%.

This tells you how good your website is at turning visitors into buyers. A higher conversion rate means more people are finding what they want and making purchases.

Average Order Value (AOV)

The Average Order Value is the average amount of money a customer spends each time they place an order. You can calculate it by dividing your total revenue by the number of orders.

If your AOV is higher, it means customers are buying more each time they shop. You can increase this by offering discounts for larger orders or suggesting related products at checkout.

Revenue per Visitor (RPV)

Revenue per Visitor tells you how much money, on average, each visitor to your site brings in. It’s calculated by dividing your total revenue by the number of visitors.

This metric combines both traffic and sales. It helps you understand how valuable each visitor is, whether they buy something or not. If this number is low, it might mean your visitors aren’t converting into buyers as well as they could.

Customer Behavior KPIs

Customer Retention Rate (CRR)

The Customer Retention Rate shows the percentage of customers who come back to make another purchase after their first one. A high retention rate means your customers are happy and likely to return.

It’s often cheaper to keep existing customers than to find new ones. If your retention rate is low, it could mean you need to work on your customer service, products, or loyalty programs.

Cart Abandonment Rate (CAR)

The Cart Abandonment Rate measures the percentage of shoppers who add items to their cart but leave your site without completing the purchase. For example, if 100 people add products to their cart but 70 of them don’t finish checking out, your cart abandonment rate is 70%.

A high cart abandonment rate means there could be an issue with your checkout process. Maybe it’s too complicated, or customers are surprised by high shipping costs at the last minute. Lowering this rate can lead to more completed sales.

Customer Lifetime Value (CLV)

Customer Lifetime Value tells you how much money, on average, each customer is expected to spend at your store over the time they continue to buy from you.

If you know the CLV, you can figure out how much you’re willing to spend to acquire new customers. A high CLV means that customers are not just buying once but returning multiple times, which is great for long-term growth.

Marketing and Traffic KPIs

Traffic Sources

Traffic Sources tell you where your website visitors are coming from. For example, some might find your site through Google search, social media, paid ads, or email marketing.

Knowing which traffic sources bring the most visitors (and customers) helps you understand where to focus your marketing efforts. If most of your traffic comes from social media, you’ll want to invest more in that platform.

Email Open Rates & Click-Through Rates

These metrics track how well your email marketing campaigns are performing. The Open Rate shows how many people open your emails, and the Click-Through Rate shows how many people clicked on a link in the email to visit your store.

If your open and click-through rates are low, your email campaigns may not be engaging enough. Improving your email content can drive more traffic and sales.

Return on Ad Spend (ROAS)

Return on Ad Spend tells you how much revenue you earn for every dollar you spend on advertising. For example, if you spend $100 on ads and generate $500 in sales, your ROAS is 5x.

This helps you see if your advertising is profitable. A higher ROAS means your ads are bringing in more money than they cost. If your ROAS is low, you might need to adjust your ads or target a different audience.

Operational KPIs

Order Fulfillment Time

This KPI measures how quickly you process and ship customer orders after they’re placed. The faster you ship, the better the customer experience.

Customers expect quick shipping. If your order fulfillment time is slow, customers might be less likely to return or leave positive reviews. Improving this KPI can help with customer satisfaction and repeat business.

Inventory Turnover Rate

The Inventory Turnover Rate shows how often you sell and replace the products in your store. If you sell out of a product quickly and need to restock it often, you have a high turnover rate.

A high inventory turnover rate means your products are selling quickly, which is good. But if your rate is low, it could mean you’re holding onto too much unsold stock, which ties up cash and space in your warehouse.

Return Rate

The Return Rate measures how many products are returned by customers after purchase. For example, if 10 out of 100 sold items are returned, your return rate is 10%.

A high return rate could mean there’s an issue with product quality or customer satisfaction. Reducing your return rate helps keep customers happy and reduces your costs for handling returns.

Tracking these KPIs will give you a clear view of how your ecommerce business is performing in different areas. By paying attention to these numbers and making small adjustments, you can improve your store’s overall success — whether that’s increasing sales, keeping customers happy, or running your operations more smoothly.

How to Choose the Right KPIs for Your Business

Not every KPI will be relevant to your business. To choose the right ones, start by thinking about your goals. Are you trying to increase sales? Improve customer loyalty? Grow your traffic?

For example:

• If you’re focused on growing your revenue, track Conversion Rate, Average Order Value, and Revenue per Visitor.
• If you want to improve customer satisfaction, focus on Customer Retention Rate and Cart Abandonment Rate.

By identifying your business goals, you can focus on the KPIs that matter most for your success.

How to Use KPIs to Grow Your Business

Once you’re tracking the right KPIs, use them to guide your decisions. Here’s how:

Boosting Sales

If your Conversion Rate is low, try optimizing your product pages or offering discounts to encourage more purchases.

Improving Marketing

If your ROAS isn’t great, you might need to rethink your ad campaigns or target a different audience.

Reducing Cart Abandonment

If your Cart Abandonment Rate is high, consider adding reminders for customers to complete their purchase or simplifying the checkout process.

Making small changes based on KPI data can lead to significant improvements in your store’s performance.

Tools That Help You Track Ecommerce KPIs Easily

Luckily, there are plenty of tools that can help you keep an eye on your KPIs. Tools like Google Analytics, Shopify Analytics, and Klaviyo can track your website traffic, customer behavior, and marketing performance in one place. These tools also make it easy to set up automatic reports, so you don’t have to manually check your numbers all the time.

1. Google Analytics

Google Analytics is a free tool that helps you track website traffic, user behavior, and conversions. It shows where your visitors are coming from and how they interact with your store, making it easy to track KPIs like traffic sources and conversion rates.

2. Shopify Analytics

If you run your store on Shopify, this built-in tool provides detailed reports on sales, customer behavior, and marketing efforts. Shopify Analytics gives you insights into KPIs like average order value, customer retention, and cart abandonment.

3. Klaviyo

Klaviyo is an email marketing platform that helps you track email-related KPIs. It shows metrics like open rates, click-through rates, and how your emails impact sales, so you can improve your email campaigns.

4. Google Ads

If you’re running paid ads, Google Ads tracks your ad performance and provides key metrics like return on ad spend (ROAS). This helps you see how well your advertising is turning into sales.

5. Hotjar

Hotjar is a tool that shows you how visitors interact with your website through heatmaps and visitor recordings. It helps track customer behavior KPIs, like where users drop off or abandon their cart, so you can improve the user experience.

Tracking KPIs is only helpful if you review them regularly. Go over your metrics and see how your store is doing. Are your numbers improving? If not, where can you make adjustments?

By staying on top of your KPIs, you can quickly identify issues and make small changes that lead to big improvements over time.

Start Tracking These Ecommerce KPIs to Improve Your Business

KPIs are the key to understanding how your ecommerce business is performing. By tracking the right KPIs, you’ll have the insights you need to make smarter decisions, grow your revenue, and create a better shopping experience for your customers.

If you’re not already tracking KPIs, now is the time to start. And if you need help setting up a KPI tracking system or improving your ecommerce performance, we are here to assist. With our expertise in ecommerce solutions, we can guide you through the process and provide the tools and insights you need to grow your business.

Ecommerce KPIs FAQs

You might be having few queries in your mind after reading this blog. Let’s answer them:

What are the best KPIs for measuring the performance of an ecommerce business?

The best KPIs to measure your ecommerce performance include Conversion Rate (CR), Average Order Value (AOV), Customer Retention Rate (CRR), Cart Abandonment Rate (CAR) and Return on Ad Spend (ROAS).

How often should I review my KPIs?

You should review your KPIs at least once a month, but checking them weekly can help you stay on top of any changes or issues. Regular reviews allow you to make quick adjustments to improve your store’s performance.

Can tracking too many KPIs be overwhelming?

Yes, tracking too many KPIs can be confusing. It’s better to focus on the key metrics that matter most to your business goals. Start with 5–7 essential KPIs that directly impact your sales and customer satisfaction.

How can I improve the Conversion Rate (CR) of my ecommerce business?

To improve your conversion rate, make sure your website is easy to use, your product pages are clear, and the checkout process is simple. Offering promotions, discounts, and ensuring fast page loading times can also help convince more visitors to make a purchase.