4 min read

Key Performance Indicators for every eCommerce business

Nowadays, the online market is experiencing continuous growth. What's more, the market is becoming even more crowded and competitive as well. This makes it difficult for eCommerce businesses to effectively stand out and reach their target audience. That's why every store has its own unique approach whether for marketing or for customer engagement practices. However, no matter how well-developed your approach is, you can't know for sure if it's working or not.

To measure the success of their business, as well as the efficiency of their efforts, many eCommerce store owners measure relevant metrics and KPIs (Key Performance Indicators). These metrics can help you determine the overall performance of your store and identify the current engagement levels for your customers. That way, you can also determine whether or not your efforts require some improvements and if so, why. That being said, here are a few KPIs every eCommerce business should be monitoring.

Website traffic KPI

Website traffic is important for eCommerce stores. In essence, the more website visitors you have, the greater the likelihood of scoring a sale or converting a lead. The Google Analytics tool can help you monitor website traffic efficiently. However, simply knowing how many visitors come and go to your website isn't enough to determine the success of your efforts. Many consumers stop by your website out of sheer curiosity, while others will browse, in order to compare products and prices.

To determine how many qualified leads visit your website, you have to monitor other metrics associated with web traffic KPI. For example, the average time spent on site, page views ,the source of traffic, such as leads generated from paid ads, organic traffic from your SEO efforts or leads generated by your social media campaign, referrals and word-of-mouth recommendations. These are all more qualified leads, which means they are actually interested in your offer. The more qualified leads you have, the more successful your efforts will be.

Conversion rate KPI

Conversions are key to an eCommerce business success. It's important to understand that conversion doesn't always mean sales. Although increased sales are one of the primary goals for every eCommerce store, conversion can also mean any other desired action taken by your leads.

For example, downloads, email subscriptions and so on. As long as the desired action has value to your business it can be considered a conversion. Measuring a conversion rate KPI is, therefore, very important in understanding your business success. If not enough leads are converting, it means you have to step up your game and improve your efforts to be more compelling, as well as appealing.

Customer retention rate

Returning customers are very important for eCommerce businesses. Being able to retain customers means you're able to ensure customer satisfaction, engagement and loyalty. What's more, repeat business greatly benefits your profits and bottom line. Measuring customer retention KPI helps you determine how many customers come back to do business at your store. As a matter of fact, retained customers oftentimes spend as much as 67% more than new customers.

In addition, it's 6 to 7 times more expensive for businesses to acquire new customers than it is to retain them. If you're lacking repeat customers, it means your offers aren't compelling enough or customer experience on your website isn't good enough to engage customers. You can remedy the situation by using social mention monitoring tools to gain relevant insights into what your audience thinks about your content and use that data to define your strategy. With that information, you can build a loyalty program or improve your website design and structure, as well as your offers. If you manage to improve the retention rate by just 5% your profits may increase by 95%.

Bounce rate

No matter how effective your marketing campaigns are at generating leads and guiding them towards your website, it's all pretty much in vain if your website design isn't developed to hold their interest. One of the more important KPIs you should be tracking is bounce rate. Bounce rate indicates how many website visitors abandoned your website as soon as they've landed on your pages. A bounce rate of 40% or lowers is actually considered a good percentage.

Anything higher than that and you have a problem. A problem can be solely in the design of your landing pages, but it can also be a slow loading page, a 404 error and so on. Nevertheless, if your bounce rate is too high, you might want to reconsider your landing page design and your website design in general. If you have difficulties improving the design and functionality of your website on your own, you can always consult with professionals. Lowering your bounce rate means more leads on your website, and more leads mean better chances for conversions.


Customer acquisition costs (CAC) and customer lifetime value (CLV) KPIs are essential for your eCommerce business. These metrics allow you to determine how much you spend on acquiring a new customer, as well as how much is that one customer is worth to your store. CAC metric helps you determine how much you spend on marketing and other efforts to convert a lead into a customer.

On the other hand, CLV helps you determine the total gross profit generated by a single customer during their lifetime as a customer at your store. In short, how much revenue you gain from a customer, as long as they remain your customer. If your CAC costs exceed CLV profits, it means you'll have a negative impact on your bottom line. In other words, you're spending more to gain a customer than you are gaining from them.

Shopping cart abandonment KPI

Shopping cart abandonment means lost sales and lost conversions. In fact, the shopping cart abandonment rate has increased to 75.6 % for the global retail industry. That means that consumers give up on their purchase at your check out process for some reason. These reasons can vary from additional shipment costs, unexpected fees to lack of security and so on.

In other words, if there's an issue with your check out process, you must know about it and you must also understand why your customers abandon their carts. Measuring the shopping cart abandonment KPI can give you a clear picture of what's happening at your check out page. Therefore, if you find out there's an issue, you can resolve it and remind your customers of their abandoned carts.

In the world of data and analytics, measuring essential KPIs can mean the difference between business success and failure. KPIs are crucial for eCommerce stores as they engage in daily struggles to outrun competition and ensure customer engagement, as well as loyalty.  Without measuring KPIs, you have no means of knowing whether or not your business is performing well or developing properly for that matter.

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