Online store owners need to track eCommerce metrics to stay informed about their website performance and make smarter business growth decisions. There are many metrics out there, but which ones are worth paying attention to the most?
We’ll cover 5 of the essential metrics for eCommerce businesses to focus on in the following article. You’ll learn what these indicators are and why they’re important for building effective marketing and sales strategies.
1. Bounce Rate
Let’s start from the point at which visitors are first introduced to your website. Often users leave the store as soon as they open it. The bounce rate reflects the proportion of visitors who close the site immediately after viewing the first page. To determine its value, you divide the number of people who viewed only one page by the total number of visitors.
If the resulting value is very high, the reasons may be the following:
- Low loading speed;
- Poor usability;
- Bad quality of content.
For any online store owner, it’s better to keep the bounce rate as low as possible. Therefore, the marketing team must work together with the designers and developers to fix the flaws in the site that lead to people choosing to leave it.
In simple words, a high bounce rate is caused by poor site quality. For example, many large Magento-based online store owners face this problem. To improve the characteristics and performance of such a site, you need to ask for help from a reliable Magento development company. Professionals can help you optimize content, improve certain features, enhance the UX\UI, or even convert your store into a progressive web app (PWA) that gives users the best user experience.
An example of one of the many measures online store owners apply to reduce the bounce rate is in the screenshot from the Birchbox US site. If a visitor goes to a nonexistent page, instead of the standard 404 error, he will see a page offering help finding products he might like. Thus, this reduces the probability that the user will immediately leave the site.
2. Cart Abandonment Rate (CAR)
Cart abandonment rate is determined by the number of customers who have added items to the cart but didn’t complete the order. So how do you calculate the value of this parameter? First, the total number of orders placed is divided by the number of abandoned carts. Then subtract the received value from 1 and multiply by 100.
Among the main reasons users may not proceed to pay for items added to the cart are the following:
- Poor UX/UI;
- Site security issues;
- Complicated and time-consuming registration and/or checkout process;
- Added value that occurs during checkout;
- No option for the guest checkout.
The screenshot below shows that the Urban Outfitters online store takes care of customers by offering them two ways to complete their order: as a guest or after registering.
Another reason for leaving an item in the cart may be a desire to wait until it is discounted. In addition, some customers tend to get distracted and simply forget to check out.
There are several ways to reduce the cart abandonment rate:
- Improving site design;
- Sending reminders by email when there are items left in the cart;
- Conducting periodic sales;
- Taking advantage of remarketing opportunities.
3. Conversion Rate (CR)
To calculate the CR of the online store, divide the number of conversions for a certain period by the total number of visitors of the site for the same period and multiply the resulting value by 100. This parameter shows the effectiveness and profitability of your online retail site.
You can consider any action desired by the owner of the store as conversion (for example, payment for goods, registration, subscription to an email newsletter, downloading a file, and others).
If the conversion rate is low, you should take the following steps:
- Optimizing content on the pages of the site;
- Implementing interactive elements;
- Designing call-to-action buttons to ensure user-friendliness;
- Using methods of returning users to the site;
- Providing simple and clear navigation;
- Motivating users to take the action you want by giving some benefit.
For example, the Ernest Jones website offers to sign up to the newsletter and get a code to save 10% from the next purchase. Such an offer will encourage users to provide their email addresses.
4. Average Order Value (AOV)
This parameter shows how much an average customer spends in the store per visit. To calculate its value, you need to divide the total revenue for a certain period by the number of orders for the same period.
Of course, the higher the AOV is, the better for your business. If the average bill is large, it means that you have attractive prices, high-quality products, and experienced managers.
How do you increase the AOV? Here are some valuable ideas.
- Offering free delivery on orders for a certain amount can stimulate to make a bigger purchase.
- Sending emails with attractive discounts on items the user has added to the cart but hasn’t paid for yet.
- Providing coupons with discounts on the next purchase.
- Offering to buy a combo of products at a better price. This method helps not only to increase the average bill but also to sell less popular products together with those that are in demand.
- Cross-selling based on recommendations. Many stores use this method through blocks like “You may also like” in the product pages. For instance, this is how this solution looks on the Ashley Furniture website.
5. Customer Lifetime Value (CLV)
The CLV is determined by the total amount a customer spends over the entire time in your store. Therefore, tracking this parameter is essential to ensure that the average cost of acquiring a customer does not exceed the customer’s profit for the whole cooperation period.
- Email marketing
If you send customers a newsletter regularly, they will remember your brand. So when they need something, they’re more likely to come to you. Focus on personalizing email newsletters to meet the needs of different types of customers.
- Loyalty programs
It’s worth rewarding those customers who stay with you for a long time to keep them loyal. So start a loyalty program, and you’ll soon find that their number grows.
- Customer retention
Don’t abandon your customers after their purchase. Instead, provide them with informational support and assistance by answering questions they may have.
Sometimes it’s worth conducting giveaways and contests with prizes to increase the value of your brand in the eyes of customers.
- Сustomer feedback
Analyze customer feedback to know what to work on to meet the needs of a broader target audience range.
- User-generated content
Encourage customers who create photo and video content related to your brand to gain their sympathy and trust. Look how Revlon uses its fans’ content for their Instagram account to create social proof and please their customers.
In this article, we covered only a few important metrics for an online store owner. You can continue this list on your own.Tracking the indicators of your business performance will help to identify its weak points and determine the best methods for its development.
About the Author
Kate Parish, chief marketing officer at Onilab with 8+ years of experience in Digital Marketing and website promotion. Kate always strives to stay in pace with the ever-advancing online world, and the sphere of Magento PWA development. Her expertise includes in-depth knowledge of SEO, branding, PPC, SMM, and the field of online sales in general.