Stop relying on gut instincts. Track these 17 eCommerce metrics instead
When you’re running an online business, gut instinct alone won’t make you successful.
Success requires having a clear understanding of the health of your business. It requires having a constant pulse on your eCommerce metrics and key performance indicators (KPIs) in order to keep your business growing in the right ways.
That said, eCommerce metrics can run the gamut. For the purposes of this blog, we’ll look at the eCommerce metrics across these three categories:
Marketing-focused data points like conversion or customer retention rates
Business-related measurements like profit margin and cost of goods sold
Customer service-related benchmarks like net promoter score
Keep reading for a breakdown of each and tips for improving your store’s performance.
What’s the difference between an eCommerce metric and KPI?
KPIs and metrics are sometimes used interchangeably. However, they are not one in the same.
A metric is a data point that can be used to inform a KPI or your understanding of a business process. For example, “time on page” is a metric that indicates how engaged your consumers are with your products and your online store.
A KPI, meanwhile, is a clear and measurable goal that you set to guide your growth. It is a subset of your most important metrics. For example, if your KPI is conversion rate and your goal is to increase conversions from 2.5% to 3.5%, then you may use several metrics (like time on site, bounce rate, and cart abandonment rate) to gauge progress and understand the steps that you need to take.
The purpose of both metrics and KPIs is to help you quantify, benchmark, and track success. Once you identify the right metrics to routinely track, you can establish a baseline and collect data on various business functions. You can then use this information to tweak your business strategy and improve individual KPIs.
17 eCommerce metrics you should be tracking
01. Customer acquisition cost (CAC)
CAC is your average cost of attracting a new customer. Calculate CAC using the below formula, where promotional costs include any money you put towards a certain campaign. These costs don’t just refer to ad costs, but also the money that you spend on producing content, hiring designers, and using software to build and track your campaign.
CAC = Total promotional costs ÷ number of customers acquired
As an example, if you spent $2,000 launching a Google Ad campaign and attracted 150 customers, then your CAC would be $13.33/customer.
You'll want to make sure that your CAC is manageable and costs less than your customer lifetime value (CLV). A few ways to reduce CAC: spotlight higher-margin products, optimize your ad spend, and build up your organic strategies to reduce your reliance on paid channels.
02. Organic vs. paid traffic
Knowing the source of your web traffic can help you to understand the effectiveness of your eCommerce marketing efforts. Two important traffic channels include:
Organic - The number of visitors you attract to your site through unpaid channels. Improving organic traffic volumes typically means having a strong eCommerce SEO plan, plus making the most of your owned media channels (email newsletters, blog, and social media channels).
Paid traffic - The number of visitors you attract through paid channels, such as Google Ads or paid social media campaigns. Paid channels offer the advantage of immediate and wide-scale reach, but require ongoing payment to see consistent results.
To find the breakdown of organic versus paid traffic, use tools like Wix Analytics or Google Analytics. If you find that your paid traffic far outweighs organic traffic, then it’s likely time to focus on your organic channels. Otherwise, you might see a lot of your traffic dry up whenever your ad budget dries up.
It’s also worth looking at differences in conversion rates and behaviors, depending on which channels your buyers enter from. Are buyers converting better after seeing a certain ad? Are they browsing multiple items on your site, or are they just viewing and buying one particular product? The answers to these questions can help you decide how to optimize your campaigns and improve your site to deliver a better experience.
03. Cost-per-click (CPC)
CPC is the amount you pay for each person who clicks on a link within a pay-per-click ad (think: Google ads, Amazon ads, and Facebook ads).
The higher-volume a keyword, the more competitive it generally is. So you’ll likely pay a higher CPC (i.e., submit a higher bid) to win placement on these SERPs. At this point, you’ll want to avoid overpaying for ads by doing your due diligence. Are keywords attracting people with the right intent? Are there other long-tail keywords that you could target at a lower price? How can you tweak your targeting, and what can you do to make sure that every ad you deliver drives results?
04. Return on ad spend (ROAS)
ROAS is an emerging eCommerce metric that enables you to measure how much revenue an ad campaign brings to your business.
ROAS = Total revenue generated from paid ad campaign ÷ total campaign ad spend
So, if you earned $12,000 in revenue from a Facebook Ad campaign that cost you $1,500, your ROAS would be $8. ROAS is most often expressed as a ratio. In this example, your ROAS ratio would be 8:1. Across all industries, a generally accepted positive ROAS ratio is 2.87:1.
05. Bounce rate
Bounce rate represents the number of people who only view one page on your site before exiting out.
Bounce rate = (total # one-page visits ÷ total # of website entries) x 100
Bounce rates are provided by most web analytics tools, like Google Analytics and Wix Analytics.
A healthy bounce rate is relative. However, most sites will see bounce rates between 26% to 70%, according to a study by RocketFuel, with bounce rates between 41% to 55% considered average.
Bounce rates above 70% may signal technical issues with your website, such as slow page speed, broken links, or mobile responsiveness problems. (A super low bounce rate could also signal tracking or other issues, as some bounces are to be expected.)
If you notice high bounce rates on your site, check for technical errors as well as poor-performing content. It’s possible that customers aren’t connecting with your products, your messaging, or overall branding. Or, the messaging on your landing page may differ drastically from the messaging someone sees on an ad (as an example).
06. Average session duration
Average session duration is the amount of time users spend (on average) during a single visit to your website (though the definition of a “session” may vary between tracking tools).
In general, a longer average session duration is good. It’s an indicator of your visitors’ level of interest in your brand or products. But it could also mean that it takes longer than it should for your shoppers to navigate your online store.
The best way to know is by digging into what users are doing once they enter your site. Are they exploring multiple pages? Are they actually taking steps towards making a purchase? Where are they dropping off? If most people are abandoning their carts, a longer session duration could be a symptom of an inefficient checkout process.
For comparison, the average session duration across all industries is four minutes and 17 seconds, according to a report by Contentsquare. However, time spent on buying sessions across industries is longer—averaging 11 minutes on mobile and 20 minutes on desktop.
The number of transactions from your website doesn’t tell the full story regarding your profitability, but it does indicate the popularity of your products over time. Transactions are, quite simply, the number of individual sales made on your site over a specific time period.
You can choose to track transactions on a weekly, monthly, or yearly basis to develop a baseline. Doing so will help you measure the impact of seasonality or discounts on specific products. It will also help you separate your most popular products from the least popular ones.
However, make sure to measure transactions against order value and margins to confirm that your most popular products are worth further investment.
08. Conversion rate
A “conversion” could mean different things to different people. For example, a marketing team may define conversions as the number of signups to an event. By comparison, you may choose to define conversion as a sale—or, you could track several types of “smaller” conversions, like adding a product to a cart, entering a coupon code, or signing up for a free trial.
Once you’ve defined what a conversion means for your business or campaign, you can calculate conversion rate using this simple formula:
Conversion rate = (conversions ÷ total visitors) x 100
Note that as you look to increase conversion rate across your eCommerce site, your store design could heavily impact user behaviors. Here are several conversion rate optimization tests that you can try out if you’re looking to raise your conversions.
09. Cart abandonment rate
Cart abandonment rate is, as the name suggests, the percentage of shoppers who add items to their cart but leave your store without completing their purchase.
Cart abandonment rate = [1-(total # completed transaction ÷ total # of unfinished transactions)] x 100
There are seemingly an infinite number of reasons why shopping cart abandonment continues to happen—some of which are in your control, and some of which aren’t. Among the many strategies you could try: send abandoned cart emails to shoppers who left without making a purchase. Wix stores with active abandoned cart recovery automations have increased sales by up to 29%.
Other ideas: offer free and/or faster shipping, provide multiple payment options at checkout, and simplify your overall checkout process to reduce friction.
10. Return rate
Growing rates of product returns stand as another headache for many eCommerce retailers. Retail returns jumped from 10.6% in 2020 to 16.6% in 2021, according to a survey by the National Retail Federation and Appriss Retail. This amounted to more than $761 billion of merchandise that ended up back in stores or warehouses.
To calculate return rates for your store, use the below formula:
Return rate = (# orders returned or refunded ÷ total # of orders) x 100
It’s important to keep in mind that returns don’t just cost you money. They have the potential to erode your brand reputation if customers aren’t satisfied with their purchases.
The best way to improve your returns rate is to ask your shoppers why they’re returning your products at the time of return. If they say that the product they received doesn’t match their expectations, it could be a sign that you need to improve the quality of your product pages (or the quality of your products).
Another tip: make sure that your eCommerce return policy is clear and easy to find. Plus, take steps to prevent retail bracketing.
11. Cost of goods sold (COGS)
COGS, short for “cost of sales,” rolls up all the expenses of sourcing or manufacturing your products—including the costs of raw materials, labor charges, and other costs directly related to the creation of your product. It does not include utilities, marketing costs, taxes, rent, or other indirect costs.
COGS = Beginning inventory + total purchases – ending inventory
COGS is particularly useful in calculating your inventory turnover ratio and margins. It can also help you learn your true production costs so you can see areas where you can reduce them without affecting product quality.
12. Net profit margin
It goes without saying that you don’t just want to be making sales. You want to be making a profit. The best metric to measure your progress in that regard is net profit margin.
Net profit margin = [(Revenue - COGS - operating and other expenses - interest - taxes) / revenue] * 100
Net profit margin is indicative of your bottom line, whereas gross profit margin gives you an immediate look at whether your business is operating at a profit or loss. The average eCommerce net profit margin is 7.26%, according to Investopedia.
Learn more about diagnosing (and improving) your eCommerce profit margins.
13. Average order value (AOV)
Your AOV is a measurement of how much income you generate per order. This eCommerce metric provides insight into your shoppers’ purchasing habits, and helps gauge the effectiveness of your marketing and pricing strategies (among other things).
AOV = Revenue ÷ total # of orders
When you increase AOV, you’re more focused on retaining and strengthening your bond with existing shoppers versus acquiring new customers. For example, many Wix merchants use Wix’s out-of-the-box tools or Velo to better upsell and cross-sell buyers. Think: “related products” banners or free delivery after a customer meets a minimum cart total.
Check out other ways to increase AOV using Wix.
14. Customer retention rate (CRR)
It costs five times as much to attract a new customer as it does to retain an existing one. Your CRR measures how well you hold onto your existing customers and therefore is a good metric of overall eCommerce efficiency.
CRR = (# of return customers ÷ total # of customers) x 100
An average eCommerce CRR is about 30%, says Omniconvert. Improve your CRR by creating ad campaigns targeted at existing customers, developing an email newsletter to nurture current customers, or creating rewards and discounts to incentivize repeat business.
15. Customer lifetime value (CLV)
CLV is an estimate of the total revenue you’ll earn from one person (or a group of people) over their lifespan as your customer. It’s influenced by your conversion and customer retention rates (CRR), and can also help you benchmark your CAC.
CLV = Average transaction value x average number of purchases x expected years of relationship
CLV is normally calculated over the period of one year. So, if your customers spend an average of $75 per shopping session, purchase around six items a year, and shop with you for an average of five years, your CLV is $2,250.
Optimizing customer lifetime value is important for nurturing brand loyalty, and ensuring that your customers have a positive experience when shopping with your brand.
16. Customer satisfaction score (CSAT)
CSAT scores involve a popular method for gauging customer satisfaction. Establish a CSAT by asking your customers a single question: “How satisfied were you with your experience?” Ask them to respond on a scale of one through five (five being the best).
Once you’ve collected all the responses, you can generate your CSAT score:
CSAT = (total # of “4” and “5” responses ÷ total # of responses) x 100
Alternatively, you can ask customers to rate an interaction between extremely satisfied, somewhat satisfied, satisfied, not satisfied, and very dissatisfied—and find the CSAT from extremely satisfied and somewhat satisfied answers.
You can measure CSAT at various parts of the customer lifecycle, such as when someone makes his or her first purchase, or someone interacts with your customer service team. This can help you to identify areas that need improvement.
It’s worth noting that in eCommerce, the average CSAT score is 81%, according to relationship operation company Netomi.
17. Net promoter score (NPS)
NPS is another, complementary way of analyzing customer satisfaction. It involves asking your customers a different question: “On a scale of one to10, how likely are you to recommend our store to a friend?”
Scores ranging from nine to 10 represent “promoters,” while scores ranging from seven to eight represent “passives.” Scores ranging from zero to five are “detractors.”
NPS = % of promoters - % of detractors
The higher your NPS score, the better your overall CX is considered to be. Yet in eCommerce, customer expectations are rising, bringing greater emphasis on even higher NPS scores.
While an NPS of 50 is considered very good in most industries, the average eCommerce NPS dramatically rose to 62 over the past year, reports Retently.
Keep a close watch over your eCommerce metrics
Above is just a sample of metrics you could be tracking. There are plenty others that you could and might already be tracking. However, not all metrics are worth the same to your business. It’s okay to pare down this list to just the ones that are the most relevant to your goals.
Keep in mind that a platform like Wix eCommerce already includes dashboards and reports for tracking the performance of your store. Look at the reports that are already available to you and take steps towards improving your business by making data-driven decisions.
Editor, Wix eCommerce
Allison is the editor for the Wix eCommerce blog, with several years of experience reporting on eCommerce news, strategies, and founder stories.