Key Metrics To Observe For Driving The Success Of Online Shops

Summary: This article is presented to enumerate and make sense of the essential metrics determining performances of eCommerce stores and driving their successes.

There are multiple factors or KPIs (Key Performance Indicators) that acts as performance metrics for eCommerce sites to know they are doing and track the progress over time. However, it's hard to contemplate which metrics are essential to monitor and will be helpful to the entrepreneurs and marketing specialists to determine the success and revenue potential of the store. For eCommerce merchants, such factors work as parameters for improving their site’s performance more, especially if they are new in the domain of online business. Different platforms, including Magento are thus built realising the vitality of key metrics so that they can integrate features that can be useful in tracking and analysing those metrics. Since there are loads of KPIs in eCommerce, here’s is compiled a list of only most crucial KPIs or performance metrics.

Site traffic

This is a predominantly the most important indicator of any buying site, to know the number of people who are visiting the store regularly. This indicator can be observed either daily, weekly or monthly, depending on the strategy of marketers and is the main factor to them for analysing the peak hours or peak time in the month for sales. This subsequently helps them to predict which part of the months or year are profitable and strategize their sales and offers accordingly to get the maximum profits.

Average cost of customer acquisition

This metric is essential for estimating the cost required for acquiring any new customer. It is a paradox for eMerchants, that is they cannot decide whether they need to pay for getting traffic or for converting to buyers. However, to count on the profits from beginning, merchants are required to analyse and optimise various acquisition channels such as referrals, social media, review sites, etc. so that they only bear the cost for quality traffic that converts well.

Customer’s average order value

Finding out a number of goods ordered by your customers, help the retailers in determining which goods are most valued by them, the products to be offered for sale or those needs to be put on discounts. Average order value of customers helps in knowing the customer purchasing habits which subsequently helps e-retailers to take decisions that will better influence their future purchasing behaviour.

Cart abandonment rate

This performance metric is used for tracking the percentage of buyers who do not actually purchase after adding items in the cart. This indicator is relatively important as it helps in determining the factors that are compelling their buyers at the last step to abandon the cart and leave. Some are prices of products, shipping charges, check out requirements, errors and so forth, the factors that are beyond the site quality, performance or SEO.

There are many other additional metrics that determine the success of eCommerce stores, but these are necessarily the strongest indicators and pulling them correctly are sure to boost revenue and competitiveness of site in the virtual market. With right observations of these metrics, businesses will be able to take prudent decisions about the growth and future of their sites.

Author bio: Jonathan is an interactive person and a professional developer, specially adept at Magento eCommerce development, who works for PHPProgrammers,  a Sydney-based web development company and likes to share his thoughts and in-depth understanding about eCommerce.