With the number of online stores growing by the day, it’s becoming harder for brands to stand out. But the top-grossing stores on Shopify have one thing in common – no, it’s not the deals and discounts they’re offering. It’s how they use their data and what eCommerce metrics they track.
The most successful eCommerce brands you see today, are basing their business decisions off of concrete data. They look into their store and marketing analytics to be able to truly understand what the market needs.
Yet, even they sometimes miss out on market opportunities that can increase the number of sales their Shopify store bags.
Because they’re missing out on the metrics that really matter while using eCommerce analytics.
These metrics have more to say about your customers and your product performance, than those you’ve been measuring!
New to eCommerce analytics? Check out our eCommerce Analytics Masterclass to get started.
eCommerce metrics you should be measuring in 2020
1. Average acquisition cost
As the digital landscape grows, a typical online store tries to reach shoppers via multiple platforms. This includes having to run both organic and paid campaigns on social media platforms and search engines. But what often happens is that brands end up paying for traffic that doesn’t convert. That’s why it is important to measure the average cost of acquiring a customer across each platform.
Average acquisition cost = Total amount spent on acquiring customers/ Total number of customers acquired in that budget
2. Repeat purchase ratio
Acquiring new customers is great. But with the increasing competition in the Shopify ecosystem, it is more important to retain your existing ones. After all, acquiring a new customer is 5 times more expensive than engaging and retaining an existing one. But how many times have your customers come back to your store to make a repeat purchase or buy more? The repeat purchase ratio tells you exactly that.
Repeat Purchase Ratio = Number of repeat customers / Number of total customers
3. Product return rate
You’re making sales, yes. But have you ever realized that the number of return requests your Shopify store gets could be impacting your revenue? These returns could have various reasons – but the most dangerous ones are when the product does not match the consumer’s expectations or them not finding enough value in them. That’s why the product return rate is an important eCommerce metric to keep track of.
Product Return Rate = Number of units Sold that were returned / Total number of units sold
4. Loyal customer rate
Loyal customer rate is an eCommerce metric that simply refers to the number of customers who make a repeat purchase from your store over a defined period of time. The metric reflects how well you’ve been able to keep your customers engaged and motivated to buy more from you.
Loyal Customer Rate = Number of repeat Customers / Total customers
5. Time between purchases
Keeping a shopper engaged is not just about reminding them of your brand. It’s about being able to pull them back and nudge them to make another purchase from your store. How frequently a consumer purchases from your store speaks a lot about how loyal they are to your brand. That’s why you need to measure the time between purchases.
Time Between Purchases = Sum of individual customer purchase rate / Number of repeat customers
6. Net promoter score
Focusing again on consumer loyalty, net promoter score helps you gauge how strong a relation your brand has with its customers. It is an alternative measure of the level of customer satisfaction that your brand is able to deliver. This is claimed to have a direct impact on your revenue growth.
Net Promoter Score = % of Promoters – % of Detractors
7. Revenue per visitor
Another one of the important metrics in eCommerce analytics is the revenue you generate every time a shopper reaches your website. It is the most effective number to measure when it comes to estimating the value of each visitor to your store.
Revenue Per Visitor = Average order value x Funnel conversion rate (Purchases/Add to cart)
8. Gross margin return on investment
When you’re running an online store, you’re required to keep a certain amount of stock of the products you’re selling. The gross margin return on investment analyzes your store’s ability to turn inventory into cash above the cost of the inventory. As market trends are changing faster than ever, this is an important eCommerce metric to track so that you can avoid stockouts or losses on overstocks.
Gross margin return on investment = Gross margin / Average inventory cost
9. Best performing products
The usual metrics that you’ve been measuring – conversion rate, cart abandonment rate and all the above, vary from one product range to the other. In fact, they vary from one product to the other too. That’s why it’s important to make this a part of the metrics you measure. This is where product analytics comes in.
Now going through each of your products in every category, looking into your store data and then Google Analytics can be tedious. That’s where using a Shopify analytics app like RevTap comes into play.
You can connect your Shopify store and Google Analytics to this smart app, and it generates clear product segments for you so that you can understand your products and their performance with ease.
10. Shopper analysis
While most won’t consider this within their eCommerce metrics, the data around your shoppers have a direct impact on your store’s growth. For instance, if you know that your store gets deal shoppers more, you can plan frequent sales to lure them into making purchases. Similarly, if you identify a certain segment of customers making purchases on full-price, you can smartly engage them with an exclusive deal.
Simply put, conducting a shopper analysis needs to be a part of the metrics you’re measuring. Use the data you’re putting together to create clear segments of your customers. But categorizing every customer into a different bucket based on the purchases they make is a time-consuming job.
Here too, plugging in RevTap comes handy. Using your store and Google Analytics data, the app creates 24 segments of your customers – cart abandoners, big spenders, refunders, VIP customers and more. Customer analytics, solved!
Turning data into more sales and revenue
The goal of using eCommerce analytics is to be able to understand your market better. You don’t just know how many sales you make in a month, but also who your customers are, where they are coming from, what kind of purchases they are making and what motivates them to buy from you.
That’s why this 2020, go beyond measuring just the cart abandonment rate. Turn your store and marketing data into opportunities to generate more revenue.
New to using data or just getting started with eCommerce analytics? Join our masterclass today.