Skip to

E-commerce Reporting

E-commerce Analytics 101: Key Metrics To Track In 2024

By Kate Parish
27 February 2024

E-commerce analytics is integral for running a successful online store. It equips retailers with valuable insights into customer behavior, sales performance, and marketing effectiveness. Businesses can make data-informed decisions to improve their strategies and maximize growth by interpreting these facts.

Through analytics, store teams and web developers get meaningful information on pain points in the user experience. Based on these details, they can add awesome features, optimize the navigation flow, or revamp the website according to the visitors’ needs.

For some brands, e-commerce analytics remains daunting for many reasons. Firstly, there’s a profusion of metrics to monitor. Secondly, a wide range of tools raises various questions and concerns among online retailers. Will free analytics services meet all business requirements? Is it worth opting for paid options from the get-go? What steps should be taken to integrate analytics into the system? Despite the challenges, store teams should use analytics to measure performance effectively.

In this article, we’ll dwell on the advantages of e-commerce analytics to the industry, define the meaning of metrics and KPIs and how they differ, and finally highlight the top e-commerce metrics to focus on.

E-Commerce Analytics: Why Embrace it

In e-commerce, data is everywhere, pouring onto store owners from multiple sources. Yet this wealth of information has little value when scattered around and not used strategically.

Analytics integrates and structures all these data arrays into one place and empowers online retailers to base their decisions on facts and raw numbers rather than a gut feeling.

What channels bring more visitors? Which customer groups spend the most? Who are least likely to make a second purchase? It’s a small part of the numerous questions that eCommerce analytics deals with.

With the correct answers at their fingertips, brands can refine their marketing strategies, improve customer experience, and increase overall revenue. Let’s look closer at the significant benefits of eCommerce analytics to the online retail industry.

#1 Deliver Personalized Shopping Experience

E-commerce businesses rely heavily on data to get a profound understanding of their customers. Customers can create comprehensive client profiles by analyzing visitors’ website interactions through a full UX audit, demographic details, purchase history, and social media activity.

Using this information, brands can tailor messaging and product recommendations according to customers’ needs and preferences. This creates a win-win situation both for online stores and their clients: buyers receive personalized shopping experiences, and companies, in return, increase customer retention and boost sales.

Analytics can greatly assist in optimizing UX, leading to increased customer satisfaction and higher sales. Let’s take Onilab’s client Bright Star Kids as an example. While monitoring consumers’ purchase behavior, an Australian brand of customizable children’s goods noticed that buyers tended to order several items simultaneously, applying the same design for all products. The process involved too many extra steps.

Together with our web dev agency, the company brainstormed possible solutions on how to minimize efforts during product customization. As a result, a personalized upsell section in the cart was created.

When shoppers customize and add a product to a cart, they see suggested popular items with the same design elements (a pattern, name, and font). The idea was highly successful, with the AOV (average order value) rising significantly, even though this metric wasn’t flawed initially.

E-commerce KPIs example

Screenshot taken from Bright Star Kids

#2 Improve Customer Engagement

E-commerce analytics largely contributes to enhancing customer interactions and overall satisfaction. With data like page views, time spent on pages, navigation paths, and click-through rates (CTRs), store teams gain valuable insights into how seamlessly clients engage with a website.

A case in point is The Webster, a famous American multi-brand retailer in the luxury segment, who turned to Onilab to address navigation issues. While tracking analytics, they realized there was a potential to increase user session duration and reduce exit rates on particular pages (for example, categories), especially on mobile devices.

Our team dug deeper into the matter by watching session recordings and creating detailed customer journey maps. Based on this data, we developed a hypothesis indicating that visitors most likely had difficulty finding the necessary category or filters because of a poorly organized navigation system. We structured it and changed the filtering logic, making it intuitive and straightforward to users. The modifications led to decreasing exit rates and eventually boosting conversions.

Screenshot taken from The Webster

By collecting and analyzing feedback, reviews, and inquiries, brands can also address people’s concerns and improve their products and services, greatly increasing customer loyalty and engagement.

Relying on analytics, online retailers can segment clients according to their purchase habits and reward repeat customers with special offers or exclusive discounts to nurture more robust relationships with them.

#3 Streamline the Demand-Supply Chain

E-commerce analytics provides a well-structured and sustainable supply chain with reduced risks of stockouts and overstocking. It assists businesses in tracking and maintaining their inventory levels and forecasting demand based on historical sales data, customer preferences, and market and seasonal trends.

With analytics, brands adopt a more strategic approach to stock management. They have no problem identifying best-selling and slow-moving products and adjusting their supply chain with a priority to more profitable items and those in high demand.

Besides, it also helps online retailers monitor and evaluate supplier performance according to multiple criteria:

  • delivery times (any deviations or constant delays can be flagged for further review);
  • quality control (constant complaints and returns may indicate issues with a supplier’s product quality);
  • order accuracy (data analysis reveals how often suppliers deliver the correct items in the right quantity).

Counting on this data, store teams can easily spot performance gaps and determine which suppliers are reliable and responsive.

#4 Optimize Pricing Strategies

E-commerce analytics is essential for devising a robust pricing strategy. The process involves examining pricing trends, customer behavior, competition, and market demand to give online retailers helpful information on how to set optimal prices and maximize revenue.

Businesses can tailor pricing based on customer loyalty, purchase, and browsing history data. This approach significantly boosts conversions among different customer groups.

Data analytics also considers product demand and helps store owners adjust pricing on various goods depending on their popularity among clients. Higher prices can be fixed on items flying off the shelf, while lower-demand products can be discounted to avoid slow-moving inventory.

Price analysis, along with a review of the highest-selling items, helps marketers determine which types of goods to promote through merchandising banners. Let’s say you land on a website and see various categories (Bestsellers, Deals, Popular categories). It’s an obvious sign that a brand keeps an eye on analytics and adapts the homepage according to the insights it extracts.

Screenshot taken from Bodum

#5 Reduce Fraud Risks

The list of fraudulent activities in the sector is striking, from account turnover and transaction fraud to coupon abuse and phishing scams. That’s why security should be a top priority for online retailers.

E-commerce analytics tools play a pivotal role in safeguarding businesses. By tracking and processing vast amounts of transaction data, they can easily detect unusual patterns suggesting fraud. This may include abnormal shopping behavior, sudden changes in transaction volume, or orders from unsafe areas.

E-commerce Metrics and KPIs: Spot the Difference

Metrics and KPIs are indispensable components of e-commerce data analytics. The two notions are often used interchangeably. However, there’s still a subtle difference between them.

A metric is a quantifiable measure used to monitor and evaluate the status of specific business processes. Think of it as a raw number or a data piece, like the daily traffic to a website or the average time customers spend on product pages. Metrics don’t necessarily reflect whether your business objectives fail or succeed.

KPIs, or key performance indicators, are basically the numbers online stores track for growth in various areas, such as marketing, sales, customer service, and operations. These measurable values indicate how effectively an online business reaches its target goals within a particular timeframe.

The primary distinction between these two terms is that metrics track processes, while KPIs assess the results of these processes. For instance, the average order value is a metric, and an AOV target of $50 is a KPI.

10 Crucial E-Commerce Metrics and KPIs to Monitor

While there are many e-commerce metrics and KPIs, tracking and analyzing all of them may seem challenging. We’ll highlight the most essential indicators online store owners shouldn’t skip.

1. Conversion Rate

This is one of the most crucial metrics to consider, reflecting how well a website converts browsers into buyers. CR refers to the percentage of prospects who purchase a product/service after visiting an online store within a certain period.

Lots of factors contribute to high conversion rates:

  • flawless UX;
  • clear CTAs;
  • precise product descriptions;
  • social proof;
  • responsive design;
  • smooth checkout;
  • and more.

A sudden drop in conversion signals a problem that e-commerce business owners should fix immediately. Start with analyzing the user experience to spot areas where friction occurs, making sure the site is mobile-friendly and well-optimized to rank higher in search, and gauging the quality of content.

2. Bounce Rate

This metric implies the share of visitors who drop off after viewing only a single page. There may be several reasons why visitors are reluctant to interact with a website and explore it further: poor design, slow loading time, or subpar content. If any of these is the case, then it’s high time for website optimization.

Consider the following steps to decrease a bounce rate and encourage visitors to stay longer on your site:

  • Improve page load speed by compressing and resizing images;
  • Optimize for a mobile user experience;
  • Use high-quality images and video assets;
  • Offer content that is easily readable and scannable;
  • Avoid bombarding visitors with ads and pop-ups;
  • Streamline the store’s navigation.

3 Average Order Value (AOV)

This is another critical metric suggesting how much customers spend on each order. It’s easy to calculate: simply divide the total monthly revenue by the number of orders during the same period.

AOV indicates what types of customers companies deal with in terms of shopping behavior and paying capacity. Brands can incorporate various digital marketing tactics to nudge buyers to spend more every time they shop online:

  • Add cross-selling and upselling blocks onto product pages;
  • Create an order minimum for free shipping;
  • Give out gift cards and coupons;
  • Introduce time-sensitive offers;
  • Set up a customer loyalty program.

Besides, it’s worth making sales and other promotional campaigns to motivate customers to indulge in some retail therapy.

4, Customer Lifetime Value (CLV)

Customer lifetime value is a significant metric measuring how much a business can plan to gain from the average customer over the course of their relationship. Knowing this figure helps e-commerce business owners wisely allocate their budget to retain customers and acquire new ones.

Building and maintaining long-term links with regular clients is the key to improving CLV. Personalized experiences, loyalty programs, and first-class customer service go a long way in keeping customers by your side.

5. Customer Retention Rate (CRR)

Consider CRR as a metric of loyalty. It indicates the number of customers a company retains over a particular period. Customer retention rate is critical to ensuring business short-term and long-term success.

Loyal customers are more likely to become repeat customers, meaning they’re of great value. It’s way more effective for brands to upsell and cross-sell to existing buyers because they already have a relationship based on trust and product satisfaction. Moreover, happy customers are an excellent source of attracting new visitors through referrals.

Online stores can calculate their CRR according to the following formula:

With a few reliable strategies, e-commerce businesses can easily hit high CRRs:

  • Gather and act on client feedback to find areas for improvement;
  • Segment customers to deliver personalized shopping experiences;
  • Create loyalty programs tailored to specific customer groups;
  • Develop referral programs;
  • Utilize social media to target prospects.

6. Churn Rate

Customer churn rate, also known as attrition rate, is the inverse KPI of customer retention rate. Suppose your CRR is 86%, then the churn rate will be 14%.

It refers to the number of clients a company loses in a pre-determined time frame. It’s essential to monitor so online stores understand the effectiveness of their marketing strategies and general customer satisfaction.

A proven way to prevent churn is to actively engage customers with your products or services across multiple channels. Offer incentives, such as discounts or coupons, to clients who are likely to turn over. Ensure top-notch customer service to keep buyers coming back.

7. Customer Acquisition Cost (CAC)

This metric tells companies how much they spend on advertising and sales campaigns to acquire new customers. It’s often paired with customer lifetime value (CLV) to determine whether an eCommerce business operates efficiently.

The simplest way to measure CAC is by summing up all sales and marketing expenses and dividing the result by the number of new customers enlisted over a certain period.

To improve customer acquisition costs, online retailers should listen to their target audience and personalize client interactions, create immaculate shopping experiences, examine each sales pipeline stage, and identify bottlenecks preventing leads from converting.

8. Cart Abandonment Rate

According to Statista, almost 70% of shoppers abandon their carts. Lots of factors impact such a drastic number:

  • unexpected shipping expenses;
  • complex checkout process;
  • forcing customers to create an account;
  • long delivery;
  • unclear return and refund policy;
  • limited payment options;
  • security concerns.

There’s no way businesses want to see high shopping cart abandonment rates. To reduce the number of users leaving their bags without finalizing a purchase, online store owners should consider the following tips:

  • Offer incentives in the form of discounts or coupons to new buyers;
  • Provide guest checkout and multiple payment methods;
  • Be transparent about shipping costs and taxes;
  • Stick to a solid refund and return policy;
  • Offer free shipping when customers spend a particular amount.

9. Return On Ad Spend (ROAS)

ROAS is another important metric that shows online retailers how much revenue they generate for every dollar spent on advertising. Essentially, it helps brands understand if their ad campaigns are working.

It’s recommended to assess ROAS in conjunction with a few more metrics, such as ROI (return on investment), bounce rate, and click-through rate, to get a comprehensive overview of the results. Here are a few good tips on how businesses can increase their ROAS:

  • Focus on the target audience and their pain points;
  • Align ads with the stages of the marketing funnel;
  • Design captivating ads in different formats;
  • Perform A/B testing of different versions of an ad to find the better one.

10. Traffic Source

E-commerce businesses promote their products/services using email, social media, paid ads, referrals, etc. By analyzing which traffic source generates more leads, online retailers can adjust their marketing efforts to optimize the best-performing channels and upgrade the ones that show mediocre results.

There are numerous e-commerce analytics tools to monitor website traffic sources. Google Analytics is a free service providing in-depth information about each online pathway visitors take to land on a site.

To Sum Up

Data is crucial in driving the business forward. By leveraging data analytics, e-commerce companies can understand their consumers better, tailor shopping experiences to meet every need, streamline operations, and mitigate fraud risks.

Diving into e-commerce analytics may seem intimidating for online retailers, as it involves monitoring and processing numerous metrics and KPIs. However, being familiar with these indicators is essential to understand how well your business is performing. Start with analyzing the 10 core metrics highlighted in the article, and as you become more accustomed to looking at the processes through the lens of metrics and KPIs, feel free to track more nuanced numbers.

Keeping a close eye on the performance of your e-commerce campaigns is crucial for assessing their success and ensuring you’re on the right path to achieving your clients’ objectives.

Swydo streamlines this journey with its intuitive, automated reporting and monitoring tools. It’s the choice of digital marketers across more than 80 countries, offering them the means to derive actionable insights and enhance campaign outcomes. Discover how Swydo can transform your organization’s approach to digital marketing. Take the first step by requesting a demo or signing up for a 14-day trial today.

Kate Parish is a chief marketing officer at Onilab. She has almost a decade of experience in the company and is enthusiastic about every aspect of digital marketing. Kate sees the marketing mission as ensuring sustainable business growth. For this purpose, she helps companies and readers create efficient campaigns, solve common problems, and enhance crucial website metrics, such as conversions, bounce rates, and others.