Top 18 Ecommerce KPIs to Measure Business Success in 2024

Ecommerce continues to experience tremendous growth globally, with sales projected to reach $7.4 trillion by 2025 according to Statista. However, the post-pandemic period also brings its share of challenges for online retailers. Factors like reduced consumer confidence, inflationary pressures, and supply chain disruptions have led to negative growth for ecommerce for the first time in many years (Figure 1).

Figure 1. Factors leading to reduced ecommerce growth in 2022

In addition, consumers are also shifting more of their discretionary spending from ecommerce towards travel, offline shopping, and other activities (Figure 2).

Figure 2. Shift in focus of consumer discretionary spending post-pandemic

To thrive in this challenging environment, ecommerce businesses need to closely monitor their performance through relevant key performance indicators (KPIs). Tracking the right KPIs provides vital insights into a company‘s health, helps identify issues and opportunities, and enables data-driven decision making.

In this comprehensive guide, we‘ll cover:

• What are ecommerce KPIs and why are they important
• Overview of key ecommerce trends impacting KPIs
• Top external and internal KPIs to track with examples
• Role of analytics tools in managing KPIs
• Tips for setting targets and monitoring KPIs effectively
• Examples of how leading companies leverage KPIs to drive growth

What are Ecommerce KPIs and Why Track Them?

Ecommerce KPIs are quantifiable metrics that help measure the performance of an online business. By setting targets for important KPIs and monitoring them over time, ecommerce companies can identify opportunities for improvement and optimize their strategies to achieve business goals.

Some examples of ecommerce KPIs include:

• External KPIs: Competitor pricing index, market share, site traffic
• Internal KPIs: Conversion rate, average order value, customer acquisition cost

Tracking KPIs is crucial for ecommerce businesses for several reasons:

• Evaluate overall business health and growth trends
• Identify issues in marketing campaigns, website, fulfilment etc.
• Optimize strategies to improve sales, profits and customer experience
• Set data-driven goals and monitor progress
• Gain competitive intelligence on the market and competitors
• Inform decisions on resource allocation and investments
• Calculate return on investments from marketing and other initiatives

Key Ecommerce Trends Impacting KPIs

The ecommerce landscape is undergoing rapid evolution, influenced by a number of technological and consumer trends. These developments have implications for how ecommerce businesses should measure and track performance through KPIs. Some key trends include:

Social Commerce

Social platforms like Instagram and TikTok are emerging as popular channels for product discovery and purchases. KPIs like social media engagement and conversion rates specific to these channels need tracking.

Live Stream Shopping

Live video streaming by influencers on social media to showcase and sell products is gaining traction especially in Asia. KPIs around stream views, interactivity, and purchases made need monitoring.

Metaverse

Virtual stores, showrooms and shopping experiences in metaverse platforms present a new growth opportunity. Relevant metaverse KPIs will need to be measured as ecommerce expands into this space.

Emerging Payment Methods

New payment methods like Buy Now Pay Later (BNPL) plans and cryptocurrency transactions impact KPIs like average order value and purchase conversion rate.

Sustainability

Consumers are increasingly choosing brands that demonstrate authentic sustainability practices. KPIs to track this include packaging waste reduction, carbon emissions, renewable energy usage.

Data Privacy

With tighter data privacy regulation, metrics around opt-ins, customer consents, and data anonymization need to be monitored closely to avoid non-compliance.

By tracking both short-term and long-term KPIs, ecommerce businesses can gain a holistic view of their performance and the impact of these emerging trends.

Top Ecommerce KPIs to Track

To succeed in today‘s competitive ecommerce landscape, retailers need to track the right mix of external and internal KPIs. Here are 18 of the most important ecommerce key performance indicators to include:

External KPIs

1. Competitor Conversion Rates

Monitoring competitor conversion rates helps you compare your performance against key players in your niche. This informs promotional strategies and site optimization efforts to improve conversions.

2. Competitor Traffic

Analyzing competitor website traffic trends can indicate changes in their marketing campaigns and SEO strategies. It also contextualizes your own traffic growth versus competitors.

3. Competitor Social Media Followers/Engagement

Tracking competitors‘ social media growth and engagement helps you benchmark your own social media efforts and guides content strategy.

4. Competitor Product Assortment

Regularly analyzing competitors‘ product range and inventory helps you identify gaps or saturation in certain categories to refine your own catalog.

5. Competitor Pricing

Monitoring competitors‘ pricing for key products enables you to benchmark and adjust your own pricing strategy to remain competitive.

6. Market Share

Market share indicates your sales as a percentage of the total market sales. Growing this metric requires strategies to increase market penetration.

7. Search Engine Rankings

Monitoring keywords and rankings helps gauge SEO performance and identify opportunities to target high-traffic terms where you rank lower than competitors.

Internal KPIs

8. Revenue Growth

Year-on-year or month-on-month revenue growth demonstrates the financial health of your business and whether your strategies are driving sales.

9. Conversion Rate

The percentage of visitors that convert into customers is a critical benchmark for the effectiveness of your website and promotions.

10. Average Order Value

Average sales per order reflects customer spend and indicates opportunities to increase order sizes through cross-sells, upsells, or minimum order values.

11. Repeat Purchase Rate

The percentage of customers that purchase from your store more than once signifies loyalty and customer satisfaction.

12. Customer Acquisition Cost

Calculating the cost to acquire a new customer helps assess the profitability of your marketing and guides budget allocation.

13. Customer Lifetime Value

This metric quantifies the revenue generated from a customer throughout your relationship. It informs decisions on acquisition and retention investments per customer segment.

14. Cart Abandonment Rate

The percentage of carts abandoned before purchase allows you to identify and address issues in the checkout process to improve conversions.

15. Bounce Rate

High bounce rates indicate problems with site navigation or page content. Reducing bounce rate helps convert more traffic into customers.

16. Return Rate

Monitoring return rates helps identify quality issues with products or mismatches between product descriptions and customer expectations.

17. Email List Growth

Growing your email subscriber list expands your marketing reach for promotions and launches. Sign-up incentives can help drive list growth.

18. Net Promoter Score (NPS)

NPS measures customer loyalty and satisfaction. Improving this KPI requires addressing detractor feedback and doubling down on delighting promoters.

Role of Ecommerce Analytics in Tracking KPIs

Given the breadth of essential KPIs to track, leveraging an ecommerce analytics platform is invaluable for monitoring and optimizing performance.

Key capabilities offered by analytics tools include:

• Centralized dashboard to view all essential KPIs in one place
• Automated data inputs from your ecommerce platform, web traffic, etc.
• Customizable reporting to share KPIs across the organization
• Historical trends to contextualize performance and identify patterns
• Segmentation of data by categories, traffic sources, devices etc.
• Predictive analytics to estimate future outcomes using machine learning
• Notifications and alerts when KPI targets are met or unmet
• Competitor benchmarking for external KPI tracking
• A/B testing to experiment and continuously optimize KPIs
• Integration with other tools in the martech stack to consolidate data

Leading platforms like Google Analytics, Adobe Analytics, and Amplitude offer robust ecommerce analytics capabilities to help companies monitor, analyze, and optimize their KPIs.

Best Practices for Tracking Ecommerce KPIs

Here are some tips to effectively set up and manage your ecommerce KPI tracking process:

• Limit tracking to the vital few KPIs in a single centralized dashboard for easy monitoring. Avoid data overload.
• Set specific, measurable targets for each KPI based on historical baselines, industry benchmarks, and business goals.
• Monitor KPIs regularly – at least monthly, if not weekly or daily. Schedule reports for consistent visibility.
• Segment KPIs across dimensions like traffic sources, marketing campaigns, customer demographics etc. to derive deeper insights.
• Track both quantitative and qualitative data – quantitative KPIs as well as qualitative feedback from surveys, reviews, customer service etc.
• Automate tracking and reporting as much as possible through your analytics platform to save time and minimize human error.
• Make KPIs accessible company-wide to align teams around objectives and accountability.
• Review KPIs during strategic planning to identify areas for improvement and set new targets.
• Leverage predictive analytics to estimate future KPI performance based on statistical models and machine learning algorithms.
• A/B test changes before full implementation to validate improvements to KPIs.
• Optimize KPIs continuously rather than setting and forgetting them.

Examples of KPI Optimization Driving Ecommerce Success

Here are some real-world examples of ecommerce companies that successfully improved KPIs through focused strategies:

• Wayfair increased conversion rate by 10% through A/B testing product image sizes on category pages. Larger images led more visitors to engage with products and add to cart.
• Glossier improved email list growth by 15% by offering a discount code incentive in exchange for subscriptions during the checkout process.
• Chewy reduced churn by 7% and increased customer lifetime value through a loyalty program offering free shipping and discounts for frequent buyers.
• Harry‘s decreased cost per acquisition by 35% by shifting more marketing budget to direct, performance-based channels like paid social vs. TV ads.
• Oura raised average order value by 20% by introducing product bundles and add-ons in cart with complementary items to existing purchases.
• Suja Juice increased social media followers by 46% in 6 months through influencer partnerships and consistent visual content reinforcing their brand story.

Key Takeaways

Tracking the right ecommerce KPIs provides data-driven insights to optimize all aspects of your online business for growth and success in a competitive landscape. Leveraging an analytics platform enables robust monitoring, reporting and predictive modeling of your KPIs. By focusing strategies on moving the metrics that matter, ecommerce brands can deliver the metrics that matter – happier customers, higher revenues, and greater profitability.