Ecommerce entrepreneurs often wear many hats: executives, marketers, social media managers, web designers, customer service specialists and more. One minute you’re in Google Analytics monitoring the performance of your online store. The next, you’re whisked away to deal with a supply chain hiccup or a network security issue. It’s a fast-paced job, but a rewarding one.
To optimize how you and your team allocate time, it helps to set benchmarks and goals. That way, you spend less time wading through volumes of data and more time fine-tuning your store for optimum performance. Consider these four ecommerce metrics before setting goals for the coming year—they will help you zero in on what’s working for your ecommerce store and what needs a tweak.
Average Order Value
Any sale is a good sale. Anytime you see conversion rates rising, it’s cause for celebration. But underneath the number of sales lies an important metric: average order value (AOV). To derive this metric, you must divide the total sales revenue by the total number of sales. If you sell $2,000 worth of products in 100 separate conversions, your AOV will be $20 within the given time period. This amount represents how much you can expect a typical customer to spend with each transaction.
Wherever your AOV currently stands, there are always ways to increase it. Here are two examples from Kissmetrics:
- Upselling: Your ecommerce store suggests a more expensive alternative to a customer when they’re browsing or checking out.
- Cross-Selling: Your online store recommends complementary products or bundles to buyers.
Conversion Rate by Device
Shopping online used to be a matter of planting yourself behind a computer and clicking away. These days, shoppers are increasingly turning to mobile devices for researching, browsing and buying online. It’s important for stores to understand how customers are making purchases. Tracking conversion rate by device helps sellers curate a positive user experience across platforms—and tips them off if something is awry.
One common red flag appears when desktop conversion rates are high but smartphone and tablet conversion rates are low. This is a sign it’s time to compare enterprise ecommerce platforms and find one with a more streamlined mobile experience. Consumers want quick load times, simple navigation and rich visuals. Staying competitive in an evolving marketplace means providing a top-notch user experience on desktop and mobile devices alike.
New and Returning Conversion Rates
It’s easy to get caught up in the thrill of attracting new customers. They’re like the shiny new toys everyone wants. But segmenting your revenue into first-time and returning customers will reveal returning customers are worth more. They tend to have lower bounce rates and higher conversion rates. It also typically costs less to engage them because they’re predisposed to know and shop your store. Track these metrics to ensure you’re serving both first-time visitors and loyal, repeat customers.
Shopping Cart Abandonment Rate
One of the most frustrating phenomena in ecommerce is when a customer adds items to their cart, but fails to complete the purchase. A high shopping cart abandonment rate may indicate users are experiencing some difficulty with your website. Or, they may be unhappy with your order fulfillment options.
If you require buyers to make an account before completing their transaction, they may be dropping out to avoid the effort. An opaque checkout process—one where users have a hard time calculating their costs—can also cause users to bail out. If consumers feel your payment portal seems insecure, they will not hand over their personal and financial information. Keep an eye on this metric and troubleshoot as needed.
Before you set your goals for this coming year and beyond, spend some time analyzing these four ecommerce metrics: AOV, conversion rates by device, conversion rates by customer type and cart abandonment rate.