Digital industries have come a long way in recognizing the value of their customers' data for making well-informed and timely decisions. Businesses invest a lot in implementing innovative strategies, but they also need some metrics to observe the effectiveness or success of those strategies to drive future decisions. 

Like any other industry, metrics in the e-commerce industry are quantifiable measures of an online business's performance. One of the most significant advantages digital marketing has over other marketing channels is the enhanced visibility of the actions customers take on an e-commerce site

Businesses track various e-commerce metrics to gain insights from their customer data. However, it is counter-productive to track all e-commerce metrics, so companies generally prioritize the key metrics that are most useful for achieving their goals.

Before discussing some of the most critical e-commerce metrics, it is essential to understand why e-commerce metrics are crucial to track and how they can impact brand performance.

Why Is It Important to Track E-commerce Metrics?

Behind every successful e-commerce business are performance metrics and key performance indicators (KPIs) that drive their digital marketing strategies and decisions. While these terms may be used interchangeably, metrics and KPIs serve different purposes.

E-commerce metrics are critical data measurements that give online stores a bird’s eye view of their performance in terms of customer engagement, customer acquisition, customer retention, and more.

A quantifiable performance report is crucial for a company to take calculated steps towards its business goals. Ecommerce KPIs are the goals or values a business sets for its metrics to achieve. 

Simply put, metrics are a measure of a business’s processes, whereas KPIs are a measure of how the processes perform.

Metrics and KPIs are both essential to e-commerce business in analyzing its performance. Besides measuring business progress, they also indicate any hindrances in achieving its growth targets.

Similar Article: Transform Your TV Into a Powerful SaaS KPI Dashboard in 4 Simple Steps

Moreover, with the increasing popularity of data visualization for analytics, many tools, like Google Analytics, allow e-commerce sites to track their metrics visually.

While every company has a choice of which metrics they want to track, the following are the 10 most important e-commerce metrics that every business can benefit from:

  1. Customer Lifetime Value
  2. Customer Acquisition Costs
  3. Customer Retention Rate
  4. Click-Through Rate
  5. Net Promoter Score
  6. Product Impressions/Reach/Engagement
  7. Social Media Engagement Rate 
  8. Shopping Cart Abandonment Rate 
  9. Average Order Value
  10. Bounce Rate 
  11. Boost Ecommerce Sales By Understanding Your Customer 

Let’s discuss them in detail below.

1. Customer Lifetime Value

Customer Lifetime Value (CLV) measures the value a single customer brings to an online business throughout their lifetime.

The term lifetime refers either to the lifetime of the business or the lifetime of the customer’s interactions with the company. It is formulated as:

CLV = Average purchase value x Purchase frequency per year x Customer lifetime (in years)

CLV assessment can help businesses define the worth of a customer and highlight their most valuable customers. This metric allows e-commerce platforms to improve their marketing and sales strategies in the following ways:

  • Spending business resources on targeting and acquiring the right customer demographic.

  • Targeting their most popular products in front of valuable customers to maximize revenue.

  • Defining strategies to retain customers and encouraging them to spend more throughout their relationship with a business.

2. Customer Acquisition Costs

Customer Acquisition Costs (CAC) is an average estimate of a business's spending on acquiring new customers.

It is measured using the company’s spending on sales and marketing campaigns and the number of new customers acquired as a result.

CAC = Marketing budget for customer acquisition / Total number of new customers 

Knowing their CAC is essential for an e-commerce business to expand its customer base profitably. The marketing strategy should be aimed at keeping CAC as low as possible without compromising on total revenue. This means that every new customer acquired should bring enough value to a company for CAC to not cause any loss.

CAC gives an e-commerce site an idea of the shortcomings in their customer acquisition strategies and how they can be adjusted to meet business targets.

3. Customer Retention Rate

Customer Retention Rate (CRR), also called returning customer rate, is a measure of the percentage of customers who make repeat purchases from an e-commerce website. It is measured over a period of time using the number of repeat customers at the end of that period and the total number of customers at the start of that period. 

CRR = (Number of returning customers / Total number of customers) x 100

A high CRR points to an online store's need to acquire new customers and expand its customer base. A low CRR depicts the need to improve overall customer experience and use re-targeted marketing to encourage customers to return. 

Customer satisfaction is crucial to any business as it ultimately gains customer loyalty. An e-commerce store's CRR clearly shows the number of people satisfied with the store’s user experience.

4. Click-Through Rate

Click-Through Rate (CTR) measures an e-commerce website’s traffic generated through clicking on the website’s link.

It can be calculated by counting the number of clicks on a company’s website link through ad impressions, e.g., email marketing, social media posts, or other advertisement campaigns.

CTR = (Number of clicks / Total number of impressions) x 100

Typically, CTR is a very low percentage metric where 2% or higher is considered a good CTR score.

CTR of a business essentially determines how successful its digital marketing campaigns have been. A company’s high CTR means their marketing campaigns are appealing enough for users to click through to their website. A low CTR means a company needs to work on making its impressions more attractive to gain more clicks. Email campaigns are typically more successful at getting clicks than other types of a company’s impressions.

5. Net Promoter Score

Net Promoter Score (NPS) measures a customer’s loyalty to a brand. It is estimated based on the results of a referral survey presented to customers, usually at the end of checkout.

The survey scores depict, on a scale of 1-10, the likelihood of a customer recommending the brand to someone. These scores represent three categories of customers:

  • Promoters: Happy chaps who give a score of 9 or 10

  • Passives: Customers who give a score of 7 or 8—neutral ones!

  • Detractors: Customers who give a score below 6—not so happy chaps!

Based on these scores, the NPS is calculated as follows:

NPS = Percentage of Promoters - Percentage of Detractors

The value of NPS ranges from -100 to 100. A negative NPS denotes a higher number of detractors, whereas a positive NPS means there are more promoters of your brand than detractors.

NPS is a key e-commerce KPI for a business as it is an indirect assessment and indicator of the overall customer relationships of the company.

6. Product Impressions/Reach/Engagement

To expand the customer base, there are different product discovery approaches an e-commerce business can take. Online stores spread their brand’s awareness and track user activities through the following product discovery metrics: 

  • Product Impressions are a measure of the number of times a user comes across a product’s ad, e.g., through search engines, paid social media ads, and more. Based on the marketing budget, a brand can control its product impressions and measure its response to those impressions to track product discovery.

  • Product Reach is a measure of the total number of users who are aware of a product or its brand. Businesses need to track their product reach to measure the success of their discovery and marketing campaigns.

  • Product Engagement is a measure of the number of users that engage with the product. It is an interaction between product reach and product impressions.

    Product engagement is not the same as product purchase because not every interaction will result in a purchase, e.g., clicking through product pages. Product engagement is an important metric to see what kind of products customers like and what steps can be taken to increase conversion.

7. Social Media Engagement Rate 

Social media engagement rate is the percentage of followers interacting with a business through social media platforms like Facebook, Twitter, and Instagram.

With the ever-rising social media popularity, online stores are increasingly adopting social media marketing through brands’ social media channels. The pages or channels generate a following of potential customers, and their interactions on social media are measured by likes, comments, or shares. 

Social media engagement is calculated as:

SMER = (Total number of interactions / Total number of followers) x 100

A low SMER indicates the need for improving social media marketing strategies. A high SMER depicts an increased interest of followers in a brand’s content.

Social media is a blessing for a brand’s marketing as it helps them gather a following of their target demographic. With SMER, brands can highlight content that increases their reach and improve content with low engagement.

8. Shopping Cart Abandonment Rate 

Shopping Cart Abandonment Rate (SCAR)  is the percentage of users that abandon their cart items and leave without completing the checkout process.

It can be measured by comparing the number of shopping carts created and the number of purchases completed during a specific period. 

SCAR = (No. of completed purchases / No.  of created carts)  x 100

On average, SCAR lies between 70% to 85%, depending on user device type. A low SCAR percentage indicates that a large portion of a brand’s visitors converted into customers. A high SCAR of an online store is an effective indicator of potential issues in the checkout process, e.g., a bug in the sales funnel or an overall poor user experience.

Knowing the abandonment rate helps businesses identify issues preventing customers from completing their purchase process. SCAR enables companies to understand their problems and work on solving them through sales conversion rate optimization strategies. 

Related Reading: The Repurchase Rate: How to Calculate It and Why it Matters for E-commerce

9. Average Order Value

Average Order Value (AOV) estimates the amount an average customer spends on a single order. It is the average contribution of one order to the total business revenue.

It can be calculated by dividing the total business revenue by the total number of orders during a specific time period.

AOV = Total business revenue / Total number of orders

Once customers are acquired, a company needs to know the average value generated by every new acquisition. AOV is an important metric for tracking an online store's revenue to make sure a customer spends more on a brand than a brand spends on acquiring that customer.

High website traffic with a low AOV indicates the lack of high-value customers. Keeping track of AOV can help businesses readjust their goals and strategies from time to time.

10. Bounce Rate 

Bounce Rate of an e-commerce website is the number of visitors that view a single page, e.g., a product page, and exit without taking any further action, e.g., opening a new page, checking out,  etc.

It can be measured by dividing the total number of single-page visits over the total number of website visits where the action was recorded.

BR = Total number of single-page visits/ Total numbers of website visits

In the case of e-commerce stores, 20%-45% is considered the benchmark for bounce rate. A high bounce rate denotes problems with website navigation. Every visitor is a potential customer, so online stores need to know if their visitors are having difficulties engaging with their website.

To lower their bounce rate, businesses should focus on making their website user-friendly and appealing. An easy-to-navigate online store is more likely to attract visitors to its product, resulting in a lower bounce rate.

Boost Ecommerce Sales By Understanding Your Customer 

Being a digital industry, e-commerce stores deal with loads of data daily. From opening an online store and building a brand name to product creation and servicing customers, many aspects of e-commerce require attention.

Thanks to the enhanced visibility of customer data, e-commerce stores can effectively keep track of data in all these aspects using the metrics explained above.

E-commerce metrics serve as a viewing lens for understanding your business’ performance and your customers. With an idea of a customer’s likes and dislikes, your brand can identify and tweak the problem areas in its strategies and drive profitable actions.

At, we pay special attention to e-commerce processes and integrations. If you have an e-commerce business and wish to improve your customers’ experience with better operational insights, contact us now.