Making It Know

​​Understand These 5 Ecommerce KPIs to Grow Your Business

When you’re growing an ecommerce business, it’s important to understand your online store’s performance. There are many different metrics that can provide insights into the health of your business, but the most important ecommerce metrics for you to monitor will depend on your unique goals. 

Read on to learn which key metrics are the best overall indicators of your store’s performance, plus how to identify areas for improvement and set your own ecommerce KPIs.

What is a key performance indicator (KPI)?

A key performance indicator, or KPI, is a performance measurement that helps you understand whether your business is meeting your main objectives. For example, if one of your business goals is to drive more qualified traffic to your online store, your KPIs might include tracking website sessions, conversion rate of traffic sources, and sales over time. KPIs help guide your business growth, and can always be recalibrated based on your online store’s performance. 

Top e-commerce metrics

These ecommerce metrics will help you understand your store’s current performance and set goals for the quarter or year ahead. If you already sell products on your Squarespace website, you can view these and other ecommerce metrics in your Analytics dashboard.

  1. Sales and inventory

Understanding the number of physical or digital products you sell in a given timeframe will help you plan your inventory and investments for the coming year. When you have a clear understanding of how much you sell, you can feel more confident buying supplies in bulk, investing time in developing your next digital download or online course, or hiring production help.

Squarespace users can visit the Sales by Product panel for a clear picture of current sales.

2. Traffic sources

Learn which sources, like search engines or social media, drive the most qualified traffic to your website. When you understand how your audience is finding your store, you can build a strategic marketing plan to increase traffic. 

You can choose to promote your business on channels that are already performing well, or invest in finding and engaging your audience on underperforming channels. A few simple steps can go a long way in driving more qualified traffic to your website:

New to email marketing? Learn how to build and grow your mailing list.

3. Revenue and sales by product

Revenue and units sold metrics show you which products in your online store are already selling, and which are less popular. Use this information to decide where you want to focus your marketing efforts. For example, you can promote products that are already popular to drive more sales, or provide a boost to other items to move inventory. If you run a paid marketing campaign, create trackable links so you can measure the return on your investment.

You can view revenue and sales in the Sales by Product panel of your Squarespace website.

If you decide to run a paid marketing campaign, you can also review revenue per visit in the Sales Overview panel to determine how much budget to allocate and spend per visit.

4. Conversion rate

Conversion rate is a good measure of how a visitor’s behavior converts to actions like sales or engagement, and can help you understand which products convert visitors into customers. 

You can set goals to increase conversion rates for your ecommerce website and make updates to your website to support those goals. For example, you might update your website navigation to make it easier for visitors to find your products, or use SEO tools to attract more of your target audience.

You can also spend time understanding the path your customers take from landing on your site to making a purchase, and learn where in the process customers drop off. If you see a high drop off rate from cart to checkout, consider solutions like Abandoned Cart Recovery or accepting additional payment methods. If you notice a high drop off after customers visit specific products in your online store, consider improving the item details and images on those product pages.

Squarespace users can leverage the Purchase Funnel to understand customers’ path to purchase, and view conversion rate for individual products in the Sales by Product panel. If you’ve connected other selling channels or use Point of Sale, you’ll see those channels displayed as well. 

5. Average Order Value (AOV)

Your online store’s average order value, or AOV, is the average revenue earned per order. It’s calculated by dividing revenue by the number of orders (Revenue / Orders).

Consider adding products to your store at varied price points to increase the average order value. You can combine this strategy with a discount offer over a certain amount to encourage customers to add additional items to their cart, and display related products on your product pages to encourage customers to continue browsing your store.

Set your unique ecommerce KPIs

Once you have an understanding of your online store’s current performance, start to think about your goals for the future. If your primary goal is to increase traffic to your website, focus KPIs on traffic sources and developing existing marketing channels. If your goal is to generate more revenue, you might start by reviewing top selling items or services in your store, and then determine a revenue goal based on metrics like AOV.

When you set your KPIs, balance achievable metrics with stretch goals that will help you prioritize your time and energy, and ultimately grow your business. Not quite ready to set KPIs? Learn more about how to measure your website traffic and performance.

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