The centrality of data:
Running an ecommerce business can be a profitable or loss-making venture, depending on how you strategize and handle things. If you want your eCommerce store to generate consistent profits, it is essential to understand, monitor, and analyze critical data from your online store. If you have the required expertise, you can do it yourself or you can contact an agency to get result-oriented digital eCommerce solutions.
Identifying crucial metrics:
Every business has different goals, so you have to set your KPIs/Key Performance Indicators accordingly. But there are certain metrics that are common and important in most eCommerce businesses. To help you get started, we’ve listed out some of the most important metrics that you should be analyzing on a timely basis for the best result. Take a note of all the metrics discussed below, and start using them to make data-backed decisions at the earliest.
- Conversion Rate:
One of the most important metrics you cannot afford to ignore is the conversion rate. It lets you know how many visitors turned into paying customers. You can find this metric displayed in your eCommerce platform’s dashboard. Alternatively, you can also calculate it by dividing the number of purchases by the number of total visitors for a set period. You can dive deep into this metric by finding out the conversion rate based on the traffic source, device type, fresh vs. old customer, and more. The insights you’ll get will help you to reassess your strategy for the better.
The eCommerce analytics list can never be complete without revenue. If you want to maximize your profits, don’t look at the revenue figure as a whole and segregate it to get meaningful data. You can segregate revenue to identify the sources or platforms that bring in the most sales. If you’re using email campaigns, social media platforms, blogs, paid ads, and more ways to generate revenue, it is essential to find out which method brings the most sales. You may want to scale the methods that brought the highest revenue and reassess your plans on the least sale generating method. It requires a lot of logical thinking, prior experience, market knowledge, and more, so it is best to take the help of eCommerce consulting services.
- Product-wise conversion rate:
If your store has various products, it is important to scrutinize the product-wise information. Doing so will let you know about your product-wise inventory status, the best performing products, and the worst-performing products. You can use these insights to make changes to your current inventory plan. Hiring someone with expertise in the eCommerce marketplace can be a huge plus for you and make things a lot easier. You can also check product-wise cart abandonment rates and come up with ways to boost conversions. If your eCommerce platform doesn’t offer in-built responders to get back abandoned carts, it’s time you get it implemented by professionals at the earliest.
- Average Order Value:
Knowing the Average Order Value (AOV) is crucial to understand the purchasing capacity of every buyer. You can use this metric to create better strategies for growth and even increase the AOV for higher profits. Let us understand AOV with an example. If your website earned a total revenue of $ 25,000 last month, and the total number of sales was 760, the AOV will be $ 32.89. So on average, every order on your store fetches you revenue worth $ 32. 89, and you should look for ways to increase this figure.
- Percentage of repeat customers/ returning buyers:
Repeat customers are a boon to any business; hence, it becomes crucial to keep an eye on any figure related to them. Since these customers have liked your products and made repeated purchases, you can significantly increase your profits by pushing more products to them and offering special discounts exclusive to them. If done correctly, insights gained from this one analytic can help take your business to another level.