Here are the “5 big” eCommerce metrics for any online retailer: conversion rate, cart abandonment rate, average order value, bounce rate, and customer lifetime value. They reflect essential conditions and changes in your store: how users perceive it, how they behave, how much they spend, and so forth. Correspondingly, your revenue largely depends on these indicators.
The named metrics inform you about weak points. Moreover, they prompt the ways to improve an online store in terms of performance, UX/UI, cross and upselling, engagement, and customer retention. So, let’s discuss how these 5 KPIs influence your selling platform and how to boost positive and reduce negative rates.
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Basically, this metric reflects how people find your website from the speed perspective, its content, and usability. Divide the number of users who scrolled only one page by the total visitors per month and analyse the resulting percentage.
If the figure is suspiciously large, you should draw extra attention to the three aspects mentioned above. But, first, this is what you can do to reduce the bounce rate:
- Revise the content on the page that shows a high bounce rate. Is it of excellent quality? Does it give comprehensive information? How can you amplify its engaging potential?
- Scrutinise your store’s performance. For example, how fast does the page load? If the results are unsatisfactory, apply various optimisation strategies to improve the performance of your Magento store or any other eCommerce CMS.
- Rethink UX/UI on mobile. If your online store is not optimised for mobile, then most likely, your bounce will increase. Today consumers prefer to shop via phones, so the design and navigation of your store must take it into account.
To resolve the last two issues simultaneously, more and more online retailers rebuild their websites as progressive web apps (PWAs). For example, take a look at the screenshots from the Puma Mexico PWA. In fact, this is a website. But it looks and behaves like a mobile app: it’s fast, convenient, intuitive, and you can access it from your home screen.
Screenshot taken on the official Puma Mexico website
Tons of uncompleted online orders are an all-too-familiar situation for every retailer. Divide the total of placed orders by the number of left baskets, subtract this digit from one and multiply by 100.
There is a pool of aspects that affect cart abandonment rate:
- A poor UX-UI of an online store;
- Extra costs that seem inadequate for consumers;
- Security concerns;
- Performance issues and lags;
- A tangled and exhausting checkout process.
As you see, many of these factors depend on the technical peculiarities of your website. As a result, there’s much room for improvement.
For instance, make checkout simpler, clearer, and more flexible. The screenshot below from Réalisation Par is an excellent example of such a checkout section.
Screenshot taken on the official Realisation Par website
- Users can check out as guests. It’s not obligatory to create an account.
- Users see the number of steps straight away. For example, a list or a progress bar gives an idea about the length and complexity of checkout.
- Users have many options for registration and payment.
- Users see the order summary on the right, can edit it, and evaluate additional expenses.
Make life simpler for customers. For example, if clients find it easy to buy from you, this will reduce the cart abandonment rate.
CR is the primary indication of your store’s success. Calculate CR the following way: divide the total of conversions by the number of visitors, then multiply by 100.
When it comes to eCommerce metrics, three of the most desirable conversion types are a subscription to an email newsletter, registration, and, undoubtedly, transaction. So let’s discuss what you can do to enhance your online store’s conversion rate:
- Work on speed issues and UX/UI of the website;
- Add social proof: a review section and/or social media widget;
- Craft better content: photos, videos, and product descriptions. Leverage modern content marketing tools.
- Examine CTAs: call-to-action buttons have to be as visible and attractive as possible.
Below is a nice example of a CTA by Stradivarius. It is vivid, wide, and “floating”: it moves as you scroll the page down, always being in sight.
Screenshot taken on the official Stradivarius website
This KPI aids in determining your typical buying persona and understanding whether your up and cross-selling strategies are sufficient. To determine how much money customers usually spend, divide the monthly revenue of your online store by the total orders.
If the average order value is relatively low, you can apply some tactics:
- Create appealing send-outs with contents of abandoned carts and wish lists as well as discounts, promo codes, new drops, and thematic selections;
- Nudge regular customers to buy more by showing them pop-ups with promo codes/coupons as they visit your online store. Do so from time to time;
- Equip every product page with cross- and up-selling sections. Take a look at the screenshot below from FARFETCH, where the “Complete the look” block acts like a wholesome and efficient cross-selling means.
Screenshot taken on the official FARFETCH website
Last but not least, CLV is a predicted profit from one customer during the whole history of their relationship with a business. This is one of the strategic eCommerce metrics that underlines the efficacy of your customer retention policy.
Experts calculate customer lifetime value in different ways. For instance, some use this simple formula: they multiply the average order value by the number of orders per year and by the approximate number of years a consumer is predicted to buy from a merchant. The latter largely depends on the industry you represent and the product you offer. Beauty stuff, electronics, and furniture will drastically differ in CLV terms.
To obtain more returning loyal clients, take your customer retention practice into serious consideration. Pay attention to new approaches like marketing automation tools but do not overlook good-old loyalty programs.
Below is the screenshot from a men’s skincare brand, Harry’s, which offers members favourable terms. 10% off every order, free engraving, exclusive offerings, early access to new products, and faster shipping. Sounds compelling!
Screenshot taken on the official Harry’s website
We’ve considered only five of dozens of significant eCommerce metrics you should constantly track. Nevertheless, these indicators are enough to give you a heads up if something goes wrong in your online store. With fresh KPIs at hand, you’ll be maintaining wise and all-comprehensive marketing strategies with a positive impact on your profit.
Kate Parish is the chief marketing officer at Onilab with over eight years of experience in Digital Marketing in the sphere of eCommerce web development. Kate always aspires to broaden her competency in line with cutting-edge global trends. Her primary areas of professional interest include SEO, branding, PPC, SMM, Magento PWA development, and online retail in general.