There’s no perfect solution to any eCommerce model. Setting up at the start is challenging, but real success only comes from the constant optimizations that follow. Making the right changes hinges on a deep understanding of several factors that measure your current marketing strategy’s effectiveness.

This post discusses the top 7 eCommerce statistics to pay attention to and what they mean for your business.

The Recent Rise and Advantages of eCommerce

United States eCommerce revenue tallied at around $770 billion in 2021, and that number is predicted to surpass 1.3 trillion per annum by 2025. This rapid growth stems partly from how difficult it is to compete with the increased reach and decreased overhead that online operations enable.

However, one of eCommerce’s significant advantages is its ability to hide its influence on people’s decisions. Shoppers only see the tip of the iceberg when it comes to marketing. Inviting web design, ad banners, and email lists are just a few parts of the sales funnel that lead the customer to checkout.

Online management and email lookup tools have evolved to match this digital landscape and increase the healthy reach of businesses. Website builders integrate add-ons and widgets that provide the information that marketers need to analyze each step of their funnel. What those don’t catch, smart advertising platforms like Google Ads will.

Top 7 eCommerce Metrics to Follow

Businesses should leverage all available information, but the deluge of raw and big data that analytics can spit out is overwhelming. Small and medium-sized companies don’t have the human resources to devote to it. In these cases, it’s best to focus on the most telling and actionable metrics.

1. Conversion Rate

Conversion rate is the percentage of visitors who complete a desired action on a website. For most businesses, this means following through on a purchase after interacting with their sales funnel. If one visitor clicks an email offering and spends money, that’s a conversion rate of 1 percent.

The average conversion rate varies based on the industry, but the top quarter averages slightly above 5 percent. If you’re falling below those numbers, it’s time to make changes and see what your customers respond to. A few ideas include testing headlines, adding pop-ups, or simplifying the checkout process.

2. Return on Ad Spend

The return on ad spend (ROAS) is this list’s most easily understood metric. It measures how much revenue is earned from each dollar used on paid advertising. The calculation for ROAS is found by dividing a campaign’s revenue by its cost.

The most straightforward way of knowing a campaign’s revenue is by isolating the purchases that originate from each advertisement. This more conservative approach keeps the numbers from getting bloated by unrelated purchases.

For comparison’s sake, the best campaigns reach a golden bar of $4 earned per dollar spent. However, most campaigns only achieve about half of that.

3. Bounce Rate

The bounce rate is the percentage of single-page visits. If a user lands on a website and leaves without exploring further, their visit will be considered a bounce. A high bounce rate means the content was ineffective at grabbing the visitor’s attention. This metric is even worse if they were initially interested in an advertisement but got turned off by the site experience.

The starting line for reducing the bounce rate is understanding why visitors aren’t even giving your site a chance. What’s scaring them away?

Common reasons for high bounce rates include sluggish load times, poor image quality, and a strong dissonance between advertisements and the site. If your ad campaign makes claims that your site isn’t living up to, it’s sure to turn potential customers away.

4. Net Profit Margin

Net profit margin is a ratio that measures money earned after removing expenses. It’s calculated by dividing net income by revenue and illustrates how much money can go back into the business. Keeping this number healthy is pivotal to ensuring that a company continues to grow.

This metric is the key to understanding how efficiently a company operates. Of course, the goal is always to increase the net profit margin. However, this is difficult when selling a product or service at a low price point. Every cent counts, and the net profit margin will inform all your decisions on where to cut costs to maintain profitability.

5. Customer Lifetime Value

Customer lifetime value is the average amount a customer spends over their entire relationship with a company. Simply put, it’s a way to measure how much profit a single customer should bring in.

Calculating this number is easy and only requires three variables (per year):

• Purchase Value: Sum value of all purchases divided by the number of transactions.
•  Purchase Frequency: Number of transactions divided by the number of active customers.
• Customer Lifespan: The number of days between a customer’s first and final orders.

Marketers get a better grasp of the value of individual customers by multiplying these numbers together. If their strategies spend more on enticing each customer than their lifetime value, there’s a big problem.

6. Cart Abandonment Rate (CAR)

Cart abandonment rate is the percentage of customers who add items to their shopping carts without completing the purchase. For example, if you have 1000 visitors adding items to the cart but only 100 spend money, your site has a 90 percent abandonment rate.

Obviously, businesses want to get this number as low as possible, but the average cart abandonment rate is very high. Roughly 70 percent of in-cart items are never purchased. So, temper your expectations and don’t make 10 percent your goal. A couple of tips for lowering your abandonment rate are:

• Make sure prices are transparent, so customers aren’t surprised when they reach the checkout
• Write informative product descriptions and include detailed images in all listings

7. Average Order Value

Average order value (AOV) is the amount of money a typical customer spends on an order. This helps marketers understand what their customers are coming for and how much they’re willing to pay. Optimizing products around the average order value increases the likelihood of a purchase, and if done well, it can even get them to buy other offerings.

Additionally, average order value helps measure profit. If the average order value is high, but the number of orders is low, those purchases are expensive but not frequent enough to drive significant revenue.

Conclusion

This blog post outlined a few, albeit vital, metrics to pay attention to when planning a marketing strategy. However, creating a winning eCommerce site is a long road; these are just the first steps.

Getting a firm grasp on the psychology of your ideal customer should be every business’ priority. This is only possible when marketers deeply dive into even the most minor pieces of data. Today’s platforms have incredible information-gathering capabilities ready for you to exploit if you know how to read them.

About the author:

Ben Hartwig is a Web Operations Executive at InfoTracer who takes a wide view from the whole system. He authors guides on entire security posture, both physical and cyber.

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