How to Measure eCommerce Success for My Online Store?
Reading Time: 13 minutesMeasuring eCommerce success is essential for each business owner. But it is crucial for new start-ups/business owners.
If you’ve recently launched your online store or looking to launch one, you might encounter the following concerns:
- When will people come to know about my store?
- Would they like my products?
- Will my marketing be on the right track?
- Will I be able to make sales?
- And, much more
The answer to all such questions talks about more sales and becoming successful.
We have divided this guide to measure eCommerce success for your new online store into TWO parts-
- Marketing and Visibility – Checks how you’re reaching your customers
- Sales and Revenue – Checks how you’re getting orders and revenue
Let’s begin with the first one-
A. Marketing and visibility
1. Increased Impressions
The first step towards success is getting your eCommerce store noticed. And, how’s that possible? With the help of impressions.
But, what are impressions?
Impressions are defined as the number of times people see your ads, your website in search results, or your post on social media.
Impressions from Ads-
Impressions from Organic Search-
An impression is one of the most important metrics to measure eCommerce success because that’s where people start noticing your brand.
When the new sites or eCommerce stores are launched, it is impossible to get impressions without any marketing efforts. Business owners run various campaigns to increase the impressions. And, to check the effectiveness of marketing efforts business owners measure growth in the number of impressions.
How to improve impressions on your eCommerce store?
- Start paid campaigns – Google and social media
- Incorporate social media marketing
- Go for content-driven commerce campaigns (Also, find out why should you use them)
- Implement location-wise eCommerce SEO Strategy
Use Google Adwords, Google Analytics, and Google Search Console to measure this performance metric of your eCommerce store.
2. Improved Overall Website Traffic
After impressions, it’s time to identify the clicks your eCommerce site receives. Yes, clicks are measured in terms of a number of people visiting your eCommerce store from various platforms, browsers, or devices.
It’s impossible to define the success of your retail store without the footfall. Similarly, it’s impossible to define the success of your eCommerce store without online visitors.
Until and unless you have visitors on your online store, you cannot sell your products and have customers.
What are the different ways to attract visitors or potential customers to your eCommerce store?
Here are they-
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- Organic Search through SEO – visitors from search engines like Google, Bing, etc.
- Referral through Affiliate and Content Marketing – visitors from places where your online store is mentioned
- Social Media Marketing – visitors from social media platforms
- Paid Campaigns – visitors from Google Ads, Social Media Ads, etc.
- Direct from Influencer Marketing – visitors directly landing on to your online store after finding your brand mentions on influencers’ social media posts
- Email Marketing – visitors from the newsletters you send
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How to improve your eCommerce website traffic?
- Prepare the right integrated marketing strategy aligned with your goals
- Ensure you plan the right messaging across all the channels
- Attach your message with the right kind of media
- Invest rigorously as competition is too much to sustain
- Tweak your strategy as per these performance metrics
Make sure you use these tips to optimize your different campaigns and drive noticeable growth in website traffic.
3. Enhanced Brand Visibility/Awareness
Another metric that can help you measure your new eCommerce store’s success is to identify whether people have started searching for your brand name or brand products.
Even top eCommerce brands keep on investing in brand awareness campaigns to increase their exposure to larger audiences.
How to measure brand awareness for your eCommerce store?
Here are a few ways-
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Look for Direct Traffic
When your audience directly enters your website URL in their browsers or using a bookmark is marked under the DIRECT traffic. Also, when Google Analytics or your web analytics tool is unable to track the source of the traffic, it adds it to the Direct channel.
Hence, the more people remember you or bookmark your eCommerce store URL, the more you will see an increase in Direct traffic.
Direct traffic is one way to measure brand awareness of your eCommerce store.
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Check out an increase in branded keyword searches
There are THREE ways to check the increase in the branded keyword searches-
Google Search Console
Is eComKeeda able to enhance their brand awareness? Let’s check out-
Woah! That’s an amazing click-through rate (CTR)!
Measure search popularity using Keyword research tools
Let’s identify which branded keywords trend for “sports shoes”-
Hibbett brand is more trending on Google Search compared to Nike. Hence, it clearly shows the success of Hibbett’s eCommerce store.
Look for competitive success using Google Trends
Now let’s compare the exact search terms to measure the success of branded terms of both Hibbett and Nike-
“Nike’s sports shoes” search query is more trending compared to Hibbet ones in the past 12 months.
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Track brand mentions on social media
Even social listening can help you track the brand awareness of your eCommerce store.
See how Nike receives brand mentions except for complaints and queries-
@NikeSupport is a prime example of customer service done well. They constantly respond to followers on Twitter, whether it’s about their apparel, Fuel Band or other products. Every few minutes, you can watch them respond to someone new. #TwitterSmarter https://t.co/4vnpUDHtDS
— Amit Patel (@amitpatelHR) March 19, 2020
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Conduct surveys
Another way to track brand awareness is to conduct surveys among your existing customers and also with the ones that visit your online store.
Hire the right PR agency for the same that can help you do the same with the right process.
4. Higher Social Media Reach and Engagement
Track your social media success to measure your eCommerce success.
Here are a few social commerce statistics that prove why eCommerce businesses should market on social networks-
- In 2019, the number of social media users were around 3.5 billion, up 9% year-on-year, says a report on SmartInsights
- According to a 2019 study on Statista, social media users in Latin America spend an average of 3 hours and 32 minutes daily on social media.
- Around 34% of US consumers said they had purchased products through social media, as per an August 2019 study by Bizrate Insights via eMarketer
With the right social media marketing strategy, you can double the speed of bringing more customers.
Here are the social media metrics you must measure using Social Media Analytics-
- Volume
Volume helps you identify how many people are interested in your brand or products over social media.
- Reach
Reach helps you measure how far you reach to your target audience on social media.
- Engagement
Social media engagement defines whether people interact with your posts in some way or not- likes, views, comments, shares, etc.
How to improve social media reach and engagement?
- Choose the right social media platforms as per your target audience
- Plan the right social media marketing campaigns
- Create the most engaging social media content that inspires people to engage with your posts
- Advertise to increase the reach, attract new audiences, and persuade them to buy your products
That’s how you can optimize and improve the success of your social commerce.
5. Lower Bounce Rate
Bounce rate is one of those KPIs that help you understand the behavior of your eCommerce store visitors.
What is the bounce rate?
Bounce rate is the percentage of your website visitors that visited your website but exited the website without browsing further or spending more time on your website.
The formula of calculating bounce rate-
BR = total number of one-page visits / total number of visits entered into the website
The lesser the bounce rate, the better it is for your eCommerce website.
The average bounce rate for the eCommerce industry remains around 20 to 45%.
Bounce rate matters when it comes to measuring eCommerce success because if the visitors don’t browse more, they won’t buy.
How to improve the bounce rate of your eCommerce website?
- Increase the page loading speed of your mobile and web store
- Optimize your product pages
- Add attention-to-detail for each of your products
- Create persuasive product descriptions
- Include the right list of questions within the eCommerce FAQs of your online store
- Provide the right kind of offers at the right place
- Improve the site navigation
- Avoid hiding additional costs
Make sure you reduce the bounce rate to ensure your visitors stay on your eCommerce store for a longer period of time. This increases the likelihood of getting orders.
6. Increased Newsletter Subscribers
A simple yet essential metric to measure the eCommerce success is to see how many people subscribe to your newsletter or sign-up for your brand.
More user registrations mean more people are interested in getting the product or brand-related updates in their inbox. And, that’s what defines the success of your email marketing campaigns.
There are two ways you get newsletter subscribers-
- Either they register on your online store
- Or they specifically sign-up for your newsletter
An email newsletter sign-up pop-up from Nike
In both cases, it helps you identify how many people are interested in getting a newsletter from your brand.
How to increase the newsletter subscribers for your eCommerce brand?
- Place a super-exciting offer to store visitors on new sign-ups
- Integrate interesting pop-ups to ensure your visitors sign-up instantly
- Share insightful news/blogs/user-guide to inspire visitors to subscribe for newsletter
- Collect email addresses of the people that opt for guest checkout
- Plan a well-segmented DRIP marketing campaign
Increasing newsletter subscriptions for an eCommerce brand is tricky. But, if you use the perfect ways, it’s impossible to fail.
B. Sales and revenue
1. Increased number of orders/conversion rate
The most important thing to measure is how many orders you receive in a day, week, month, quarter, and a year.
Configure your Customer Relationship Management (CRM) and Analytics tool with your eCommerce store to efficiently track the orders you receive.
Track and compare today’s orders with yesterday’s, this week’s orders with last week’s, this month’s with last month’s and this year’s with last year’s.
This way it’s easy for you to identify which channels bring you more orders-
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- Ads
- Social Media
- Organic
- Referral
- Influencer Marketing
- Email Marketing
The number of orders is also termed as conversions, and the rate at which you get orders/conversions is the conversion rate.
How to calculate the conversion rate?
Conversion Rate (CR) = (visitors placing orders / total website visitors) * 100
If you don’t see an increase in the number of orders or conversion rate, you need to check what stops your audience to become customers.
How to boost eCommerce conversion rate?
- Highlight a product scarcity
- Showcase product popularity
- Invoke an offer scarcity
- Increase the page loading speed
- Improve your organic growth with SEO
- Keep your store content less but strong
- Have high-quality product pictures with zooming functionality
- Use easy filter options
- Include advanced search functionality using audio and visual search
- Have a mobile commerce app
- Allow customers to sign-up easily
- Let customers to checkout as a guest
- Incorporate user-generated content (UGC)
Increased orders or conversion rate is the topmost success factor for your eCommerce store because it decides whether you’re growing or going into losses.
2. Improved Cost Per new customer Acquisition (CPA)
One of the major metrics to measure eCommerce success is to see an improvement in CPA.
There’s an amount that you invest to acquire new customers, the average amount spent per customer to acquire is called cost per acquisition (CPA).
Having improved CPA implies better goodwill in the market. This means that people recognize your brand and trust your products. Having said this, you do not have to spend more on acquiring new customers.
How to calculate cost per acquisition (CPA)?
CPA = The total amount of the campaign / number of new customers
For example, you’re running a campaign of selling an iPhone 11X case using Instagram Shopping. You spend $500 in a month which helps you receive 25 customers.
Your CPA = $500 (total cost) / 25 (customers)
Hence, the cost per new customer acquisition (CPA) comes to $25.
How to reduce your CPA?
Keep a close eye on your CPA and if you feel it is increasing, here are the ways to reduce the CPA-
Hence, an improved CPA ensures you’re making success with your eCommerce store.
3. Improved Average Order Value (AOV)
Average order value (AOV) is the average of total every order placed during a defined time. It is one of the key metrics driving key decisions related to your commerce including, store layout, advertising spend, and product pricing.
Keeping a track on Average Order Value is important and needs to be done from time to time.
An improved AOV is the result of a better marketing strategy, product pricing, and the performance of your online store. Not just this, it also indicates that your buyers are happy and accepting the task done by your technical team.
How to calculate the average order value?
AOV = Revenue / Number of orders (conversions)
For example, in January 2020, you saw a revenue of $1,00,000 for 1,000 orders. Then your average order value becomes = 100000/1000 which is $100.
And, if your AOV in February 2020 is $105 or more, you’re noticing eCommerce success.
How to improve your Average Order Value (AOV)?
- Free or optimized shipping
- Cross-selling & Upselling
- Cashback offers
- Huge discounts
- BOGO & FOMO
- Vouchers
- Personalized products
- Low-cost add-ons
- Loyalty/subscription
- Bundles
- Cart bumps
Also, here is a video of example-based ways to increase your AOV-
Keep tracking and measure the success of your eCommerce store via the average order value (AOV).
4. Increased Average Order Size (AOS)
In retail or eCommerce, average order size means the average number of items (number of SKUs) purchased per order.
Most of the time order size is confused with the order value. But, the average order size (AOS) is completely different from the average order value (AOV).
You cannot always consider the AOS metric to measure the success of your eCommerce store because increasing the size of orders depends on your merchandising strategy.
For example,
- When you have a clearance SALE
- When you give Freebies
- When you give high quantity discounts
- And, more
But, it matters when it comes to B2B, new arrivals, and regular buying without discounts. This directly results in improving your customers’ score in your CRM.
As a seller, you must target both- improving your average order value (AOV) and average order size (AOS) to see real profits.
5. Enhanced Revenue per Click (RPV)
Revenue per Click (RPV) is one of the simplest and best ways to ascertain the performance of your online ads. Make a note of this performance metric for your eCommerce store.
How to calculate Revenue per Click (RPV)?
RPV = Goal Value (Revenue from Ads) x Conversion Rate (Ad Clicks)
If you see an enhanced RPV, you see an increased ROI on your digital advertising.
Not just this, attaining the better RPV implies your strategies and campaigns are moving in the right direction.
6. Improved Add-to-Cart Rate (ATC)
Every time a visitor lands on your eCommerce store, you want them to add your products in their cart and finally purchase them. But, buying is not always guaranteed. Hence, you want them to at least like your products and add them to their cart.
And, Add-to-Cart rate (ATC) means the percentage of users who add at least one item in their cart while they’re browsing on your eCommerce store.
Increased ATC rate implies visitors are not just spending time on your online store, but are also liking the products and adding them to cart to finalize the purchase.
How to calculate the Add-to-Cart rate?
ATC = (Sessions while viewing and adding cart items / total sessions) * 100
Here is the latest report on region-wise and device-wise add-to-cart rate for the following regions-
How to increase the Add-to-cart rate?
Here are the ways you can increase your add-to-cart rate-
- Improve your eCommerce site’s navigation
- Add Advanced Search functionality with voice and photo search
- Make your products look amazing
- Select the right pricing strategy
- Improve your marketing strategy to enhance the ATC rates from specific channels
Inspiring people to add your products to their cart brings them closer to making a purchase. Hence, enhance your Add-to-Cart rate to make your eCommerce store successful.
7. Lower Cart Abandonment Rate (CAR)
Your eCommerce store visitors have landed the products to their cart. Now, what if they don’t purchase? Now, that’s what we call cart abandonment.
And hence, the lower the cart abandonment rate, the more successful your eCommerce business will.
As of May 2019, Statista reports that 69.57% of online shopping carts were abandoned and the purchase didn’t take place.
How to calculate the shopping cart abandonment rate?
CAR = 1 – (Total number of completed purchases / shopping carts created) * 100
The shopping cart abandonment rate differs from channel to channel, device to device, segment to segment.
The CAR for the fashion eCommerce brands differs from the CAR of the home furnishing brands. Also, the CAR from email campaigns would be different compared to the remarketing advertising ones.
How to reduce the abandonment cart rate?
- Send emailers
- Set-up remarketing campaigns
- Add offers to speed-up buying
- Put the right message with the right CTA
- Try giving them a guest checkout
- Lessen the checkout steps
- Get security badges to build trust
- Use these 13 unavoidable conversion hacks
8. Increased New & Repeat Buyers
The success of every business depends on how they acquire more new customers and how their existing customers give them more repeat business.
Similarly, in retail and eCommerce, you want your existing customers to buy more from you and you keep on acquiring new customers.
How to calculate new & repeat customer rate?
New Customer Rate = Total number of customers who have purchased first-time / number of total customers
Repeat Customer Rate = Total number of customers who have purchased more than once / number of total customers
Also, you can use your Analytics tool or open your Analytics section within your eCommerce platform. Within the same, open the customer report and filter it on- first-time and returning customers. This way you can find out how many customers bought first-time and how many bought it more than once.
How to increase the new customer rate?
- Run paid advertising campaigns
- Go for influencer marketing
- Implement SEO
- Do social media marketing
- Use traditional offline marketing
- Co-branding with bigger brands
How to increase the repeat customer rate?
- Launch subscription or loyalty programmes
- Remarketing advertising campaign
- Newsletter (Drip marketing)
- Offer special discounts and store credits for existing customers
- Target integrated advertising for channel and device-specific returning audience
- Improve customer experience
9. Improved Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is one of the topmost metrics to measure eCommerce success.
The technical definition of Customer Lifetime Value (CLV) is- CLV (also referred to as CLTV) is the average amount a customer spends in your business or on your products during their entire lifetime.
HubSpot defines CLV as-
How to calculate Customer Lifetime Value (CLTV)?
Here is the formula by PixelUnion–
How to improve customer lifetime value?
- Begin with the onboarding process with a perfectly made, offer-based welcome email
- Continue sharing the right kind of content based on their customer journey
- Go Omnichannel to improve customer experience
- Get a customer appreciation strategy
- Provide personalized browsing experience
- Set up a cross-sell and upsell strategy
Make sure you do everything to enhance your customer experience, which has the power to influence your customers to spend more throughout their life.
10. Profitability
In the end, what all organizations are looking for is profitability at a shorter or longer duration. Some organizations re-invest their profit in future growth. And some look for that to attract investors. There is no organization on earth that does not consider this as one of the key KPI for running a business.
Digital commerce is started to cut down the cost, improve ordering and increase reach. This sums-up in increased profitability. If this is not happening, then you must check the above parameters and find where the profit is going down.
It depends on the multiple parameters like the size of the project/business, type of business model, category of goods, country, taxation, policies for return/refund and capacity of a business owner to stay invested.
For the SME, if the business does not show any profit margin in 18 months, she shall look for stop-loss methods and start looking for other sales channels to increase sales or to continue investing in eCommerce.
