What is an eCommerce KPI?
Key Performance Indicators, better known as KPIs, are specific metrics that your organization identifies as predictors of growth. You’ll find that eCommerce KPIs are strategy-based and a simple metric is something more tactical. Without understanding which metrics to look at, it is very easy to get lost in a sea of data and miss the important parts.
KPIs in the eCommerce space run the gamut. That’s what makes the leadership side of KPIs management so important. If your team is spinning its wheels measuring metrics A, B, and C, when the power actually lies in metrics X, Y, and Z, you’ve missed the opportunities sitting in the data right in front of you.
It is important to remember that the KPIs you select very much work in tandem. If you notice a dip or a spike in one of your selected KPIs, you can usually look to other related KPIs and metrics to gain deeper insight.
Why Track eCommerce KPIs?
Knowledge is power. Without laser focus on the information that matters to your business, it is very hard to become sustainably successful.
eCommerce brands experiencing the most success in 2022 are driven by data. The information is out there, and it is up to each leader to decide which exact data points matter most to your team’s direction and desired outcomes.
22 Metrics to Consider
Below are 22 metrics we recommend as a starting point. Discuss these with your teams and you’ll quickly learn which matters most to your goals and particular industry and business line.
1. Add-to-Cart Conversion Rate
2. Cart Abandonment Rate
3. Shopping Cart Sessions
4. Average Session Length
5. Average Order Value (AOV)
6. Revenue per Visitor (RPV)
7. Net Profit Margin
8. Bounce Rate
9. Site Traffic
10. Traffic Source
11. Customer Lifetime Value (CLTV)
12. Customer Acquisition Cost (CAC)
13. Product Views per Session
14. Email Click Through Rate (CTR)
15. Email Open Rate
16. Average Resolution Time
17. Active Issues
18. Churn Rate
19. Return on Ad Spend (ROAS)
20. New vs Returning Visitors
21. Cost of Goods Sold (COGS)
22. Repeat Purchase Rate (RPR)
To gain a better understanding of these eCommerce metrics, including their formulas and benchmark values, continue reading below.
Add-to-Cart Conversion Rate
This value refers to the percentage of visitors who, during a given session, add at least one item to their cart.
Formula: Total Number of Sessions Where an Item is Added to the Cart / Total Number of Sessions
Who Should Care: Sales and Marketing Teams
Benchmark Value: 3-4%
Cart Abandonment Rate (CAR)
This lets you know about potential customers who add items to their cart but never complete their purchase. Your goal should be to have the lowest friction possible during checkout.
Integrating your checkout with something like Apple or Google Pay is one way to reduce friction.
Formula: 1 – (Total Number of Completed Transactions / Total Number of Shopping Carts) x 100
Who Should Care: Sales Team, UX Design Team
Benchmark Value: < 70%
Shopping Cart Sessions
This metric lets you track the total number of carts opened in comparison to the total number of site sessions. This provides insight into the attractiveness of your products and how well your site prompts a user to purchase.
Formula: (Number of Open Shopping Carts by a User during period Z / Total Number of Sessions during period Z) x 100
Who Should Care: Sales Teams, Owner
Benchmark Value: 40%
Average Session Length
This is the average time a visitor spends on your website during one single visit.
Formula: Total Session Duration / Total Number of Sessions
Who Should Care: Marketing and UX Design Teams
Benchmark Value: Approximately 3 minutes
Average Order Value (AOV)
This is commonly referred to as the Average Market Basket and it tells you the spend amount on a typical single order. This tells you about the revenue a customer generates.
Formula: Total Revenue / Number of Orders
Who Should Care: Sales Teams
Benchmark Value: It’s important to note that the AOV for a brand like Gucci will be significantly higher than that of Forever21. AOV should be benchmarked with a mind to product pricing.
Revenue per Visitor (RPV)
This metric tells you the average revenue each visitor generates.
Formula: Total revenue / Number of Visitors over a specific time period
Who Should Care: Sales Teams
Benchmark Value: As with Average Order Value, the revenue per visitor benchmark will vary based on a brand’s product pricing. This should be benchmarked against direct competitors with similar products.
Net Profit Margin
This is one of the most important metrics as it measures your profitability. It is the money you make after all deductions.
Formula: (Revenue – Cost) / Revenue
Who Should Care: Sales Teams, Owner
Benchmark Value: 7.26% for online retail
Bounce Rate
This metric tells you how many users leave your website after viewing just one page.
Formula: Total Number of One-page Visits/ Total Number of Entries to your Website
Who Should Care: Marketing and UX Design Teams
Benchmark Value: Keep this number as low as possible. 30-45% is a good target.
Site Traffic
This is the total number of people who visit your website.
Formula: Total of all users for a specific time period
Who Should Care: Marketing Teams
Traffic Source
This is where your traffic is being referred from. It could be organic search, social media searches, email campaigns, or PPC ads that lead a visitor to your website.
Formula: Total count of traffic to website, split by referral source
Who Should Care: Marketing Teams
Customer Lifetime Value (CLTV)
This metric shows you the worth of each individual customer to your business. Customer Loyalty is directly tied to this value, as is Return on Investment or ROI.
Formula: (Customer’s Annual Profit Contribution x Average Number of Years as a Customer) – Initial Cost of Customer Acquisition
Who Should Care: Sales Teams, Owner
Benchmark Value: 3x of customer acquisition cost (CAC)
Customer Acquisition Cost (CAC)
This value tells you what you spend to acquire or “buy” a new customer.
Formula: Costs Spent on Acquiring Customers* / Number of Customers Acquired
*typically via Marketing and Sales Prospecting spend
Who Should Care: Marketing and Sales teams, Owner
Benchmark Value: This can vary greatly depending on brand awareness, product prices, marketing spend, etc. According to FirstPageSage, the average retail and consumer eCommerce cost per acquisition is $87. For context, Amazon and eBay’s CAC are both around $170.
Product Views per Session
The Product Views per Session KPI communicates how effective your product marketing efforts are at driving interest, and how engaged your customers are when they arrive at your online store.
Formula: (Product pages viewed by Visitor A + Product pages viewed by Visitor B + … + Product pages viewed by Visitor N) / Total Number of Unique Visitor Sessions
Who Should Care: Marketing and Sales Managers
Benchmark Value: 3 product page views / session
Email Click Through Rate (CTR)
Email Click Through Rate measures the percentage of individuals that clicked on a link that is featured in an email. This KPI is typically monitored alongside Email Open Rate (the percentage of users that opened the email) and Email Click to Open Rate (the percentage of people that opened the email and clicked a link).
Formula: (Number of users that clicked a link in an email/Number of users who received an email) x 100
Who Should Care: Email and Digital Marketing Managers
Benchmark Value: Overall benchmark is 2.3%; retail is 0.7%
Email Open Rate
This measures the percentage of email recipients who open a given email.
Formula: (Total Number of Unique Opens / Number of Total Emails Sent Successfully) x 100
Who Should Care: Email and Digital Marketing Managers
Benchmark Value: 20%
Average Resolution Time
This measures how much time, on average, it takes to resolve a customer issue or support ticket.
Formula: (Resolution time for ticket A + Resolution time for ticket B + … + Resolution time for ticket N) / Number of tickets received within the given time period
Who Should Care: Operations and Customer Service Teams
Benchmark Value: Under 10 minutes
Active Issues
Active Issues displays the total number of unresolved tickets that are live and in the support queue.
Formula: Total number of tickets with an unresolved status
Who Should Care: Customer Service and Support Teams
Benchmark Value: 0 active issues
Churn Rate
This value provides insight into the pace at which customers leave your brand or cancel their subscriptions.
Formula: (Customers at Beginning of Month – Customers at End of Month) / Customers at Beginning of Month
Who Should Care: Product, Sales, Customer Service Teams
Benchmark Value: 4-10%, industry-dependent
Return on Ad Spend (ROAS)
This is how eCommerce companies evaluate how effective their ad campaign is. Monitoring this return helps you ensure your ad efforts are increasing your revenue.
Formula: Revenue from Advertising / Total Advertising Cost
Who Should Care: Marketing Teams
Benchmark Value: At least 3:1
New vs Returning Visitors
Is your site compelling enough to have users come back? The New vs Returning Visitors KPI measures how well your team is generating net-new awareness and enticing past customers to come back to buy more. The KPI also shows the potential for new business versus repeat business.
Formula: (Visitors without cookies data) : (Number of users that have your website cookie attached)
Who Should Care: Sales and Marketing Teams
Benchmark Value: 7:3 ratio
Cost of Goods Sold (COGS)
This is the amount your product costs you to sell. It includes things like employee wages, overhead costs, manufacturing costs, and any other directly-attributable costs to production and distribution.
Formula: Beginning Inventory Costs + Additional Inventory Costs – Ending Inventory
Who Should Care: Sales Teams
Benchmark Value: This is dependent on product pricing profiles and sub-categories
Repeat Purchase Rate (RPR)
This metric explains the number of customers that return to your site to make another purchase.
Formula: Purchases from Repeat Customers / Total Purchases
Who Should Care: Sales, Marketing, and Product Teams
Benchmark Value: 27-32%
