The Most Important Data to Track in eCommerce

Navigating the digital marketplace can be exciting and challenging for eCommerce business owners. But how will you know if you’re making the right decisions and are on the right track? One way to achieve this is to monitor the right metrics to ensure your business will thrive.

So, let’s dive into the critical metrics and key performance indicators (KPIs) to help you stay ahead of the competition and meet your customers' ever-changing demands.

Why Do You Need Data for Your eCommerce Business?

Prime Day is approaching, and the clock is ticking, but your team still hasn’t nailed down which products to push. The culprit? Poor data analytics. Without the right data, you’re left guessing instead of strategizing. You also risk losing sales, missing opportunities, and being outplayed by competitors with their data game on point. 

Here are other reasons why data is important for your eCommerce business to thrive:

Goal setting

Data is essential for setting specific, measurable goals for your business. Analyzing past performance and market trends can help you define clear objectives, such as:

• Increasing conversion rates
• Boosting average order values
• Reducing cart abandonment rates

With this, you can create targeted strategies that drive actual results!

Performance evaluation

Data allows you to measure the effectiveness of your marketing campaigns, sales strategies, and customer services. This will also help you identify and assess what’s working and what’s not.

Understanding customer behavior

Metrics like customer acquisition, retention, and engagement provide insights into customer preferences and behavior. This can help tailor targeted marketing campaigns and offerings to meet customers' needs better. With the correct data, you’re not just selling products—you’re building experiences your customers will love! 

Informed decision-making

Imagine noticing a sudden drop in sales for one of your top-selling products. Without data, you'd be left guessing whether the issue is with pricing, competition, or customer preferences! 

Once you start analyzing sales trends, customer behavior, and market dynamics, you can identify effective strategies that need adjustment to hit goals.

Maintaining competitive edge

In the fast-paced eCommerce environment, being data-driven gives you a competitive advantage. It allows you to quickly adapt to market trends, technology, and consumer preferences, ensuring long-term sustainability.

Identifying points for improvement

Did you know that 41% of shoppers abandon their carts because of expensive delivery fees? A high cart abandonment rate may also signify issues in your checkout process. Regularly monitoring data can reveal areas in your business that need improvement.

Essential Data to Track in eCommerce for Success

Monitoring key data points that can drive growth and enhance customer experience is crucial to thrive in the competitive eCommerce landscape. The following are essential metrics every eCommerce business should track and the formulas for calculating them.

Sales and revenue metrics

These metrics determine the financial health of your eCommerce business, enabling informed decision-making and strategic planning. They can also help you understand how profitable your business is. 

• Total Sales Revenue: This is the total income generated from all sales within a specific period and is the primary measure of business performance and growth.
• Average Order Value (AOV): The AOV is the average amount customers spend per transaction.
  Formula: Total revenue / Number of orders
• Customer Lifetime Value (CLV): The total revenue a business expects from a single customer over their entire relationship.
  Formula: Average Purchase Value × Purchase Frequency × Customer Lifespan
• Gross Profit Margin: This is the percentage of revenue remaining after deducting the cost of goods sold (COGS).
  Formula: (Revenue - COGS) / Revenue * 100
• Conversion Rate: This critical metric is the percentage of website visitors who complete a purchase.
  Formula: (Number of sales / Number of visitors) * 100
• Cart Abandonment Rate: The percentage of shoppers who add items to their cart but don’t complete the purchase.
  Formula: (Carts initiated - Carts completed) / Carts initiated * 100
• Repeat Purchase Rate: The percentage of customers who return to make a second purchase.
  Formula: (Number of returning customers / Total customers) * 100
• New Customer Rate: This is the percentage of sales generated from new customers compared to total sales.
• Refund Rate: This is the percentage of orders that are returned or refunded, often indicating product quality issues or customer dissatisfaction
  Formula: (Total Refunds / Total Orders) * 100

Customer metrics

Customer metrics provide insights into purchasing patterns, preferences, and behaviors. They help improve and enhance the customer experience, leading to higher satisfaction rates and increased loyalty.

• Customer Acquisition Cost (CAC): The cost incurred to acquire a new customer, including marketing and advertising expenses.
  Formula: Total cost of acquiring customers / Number of new customers
• Customer Retention Rate: This is the percentage of customers who continue to purchase over a given period.
  Formula: (Customers at end of a period - New customers) / Customers at start of period * 100
• New vs. Returning Customers: The ratio or percentage of new customers compared to returning customers.
• Churn Rate: The percentage of customers who stop using the service or product over a specific time period.
  Formula: (Lost customers / Total customers at the beginning of the period) * 100
• Net Promoter Score (NPS): This measures customer loyalty and satisfaction based on the likelihood of customers recommending your business to others.

Traffic and engagement metrics

These metrics are vital for evaluating the effectiveness of your website, marketing campaigns, and overall customer experience. You can also use them to predict future sales, track customer intent, and evaluate website performance.

• Website Traffic: The number of visitors to the website over a specific period. You can track overall traffic, by source (organic, paid, social, etc.), and by device (mobile, desktop).
• Session Duration: The average time a visitor spends on the site.
  Formula: Total duration of all sessions / Total number of sessions
• Pages per Session: The average number of pages viewed per session.
• Bounce Rate: The percentage of visitors who leave the website after viewing only one page.
  Formula: (Single-page sessions / Total sessions) * 100
• Click-Through Rate (CTR): The percentage of users who clicked on a link, such as an ad or email link.
  Formula: (Clicks / Impressions) * 100
• Engagement Rate: The percentage of visitors interacting with your website,  including clicking links, watching videos, or scrolling through content.

Fulfillment and shipping metrics

Fulfillment and shipping metrics determine the efficiency of your order processing and fulfillment. You can also get insights into how you can further streamline your processes and meet customer expectations.

• Order Fulfillment Time: The average time it takes from placing an order to shipping it.
• On-Time Delivery Rate: The percentage of orders delivered on or before the promised delivery date.
  Formula: (On-time deliveries / Total deliveries) * 100
• Shipping Cost per Order: The average cost of shipping per order.
  Formula: Total shipping cost / Total number of orders
• Return Rate: The percentage of products customers return, which can indicate product quality issues or customer expectations.
  Formula: (Returned orders / Total orders) * 100
• Backorder Rate: The percentage of orders that cannot be fulfilled due to stockouts.
  Formula: (Backordered items / Total ordered items) * 100

How iDrive Can Help You Make Data-Driven Decisions for Your Business

When running your eCommerce business, tracking the right data is key to driving growth and making smarter decisions. This gives you a clearer view of how your store is performing and where you need to improve. Regularly reviewing these numbers can fine-tune your strategy, cut costs, and boost profits to grow your business successfully.

Still trying to figure out where to start tracking data for your business? Schedule a free consultation with iDrive Logistics, and we can help you make data-driven decisions to improve your operations. You can also check out our blog for more tips, resources, and other helpful information from our experts.