Statistics show that the global ecommerce market is expected to total nearly $4.9 trillion in 2021.
What does this mean for your business? How are you currently measuring the success of your ecommerce? Where can you shift your focus in the future?
Key performance indicators can tell you how to make decisions for your business and show where you are thriving.
Keep reading to learn about the ecommerce KPIs that your business needs to focus on.
What Are Ecommerce KPIs?
Key performance indicators (KPIs) are small summaries of areas within your business and the metrics within those areas. For example, gross profit is a KPI. Your gross profit tells you information about the sales of your business and the profit that it has before taxes.
These indicators not only help with decisions but can determine investment opportunities or product expansions in the future if they are used properly and analyzed by the right people.
Conversion rate is an important KPI because it tells you how many customers that you are actually converting into sales or another step in the sales process. Website clicks, ad clicks, form submissions, and any other touchpoint response is an example of a conversion rate.
This measures taking a customer from a stranger to a buyer and tells you what percentage of people you are currently converting.
Customer Lifetime Value
This KPI is in reference to a customer’s value to a brand over the entire course of the relationship. This is not judged by one transaction but rather their lifetime of customer loyalty. It begins when they first make contact with your business, regardless of purchasing.
Long-term support of a brand, regardless of how many sales you make, is beneficial to the brand. Word of mouth is still an extremely powerful way to gain new customers, and people that have a high customer lifetime value can provide this as a result of the relationship with your business.
While this may seem like a simple indicator to be looking at, your inventory is extremely important to your entire business. Improper inventory management can lead to shortages of products or producing too many units of other products.
Having an organized way to communicate inventory that is easy to digest is a key performance indicator that you cannot ignore within your business. Your clients and customers will be relying on you to know your inventory when they would like to place an order.
Get Started Today
Now that you have read about the ecommerce KPIs that your business needs to focus on, you can get started today. The ecommerce metrics will help you see where there is room to grow and what areas need additional attention on a daily or even hourly basis. By monitoring and measuring these indicators on a regular basis, those involved with the site can make recommendations for improvement based on real, actual data. Instead of making decisions for changes based on a gut feeling, KPIs can help lead to changes that immediately improve statistics like bounce rate, time on site, and so on.
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