As of 2021, there are anywhere between 12 million and 24 million e-commerce sites worldwide, and more are created daily. However, only 1 million of them manage to make more than $1,000 worth of sales in a year. Why is this? It comes down to many factors, and not tracking the right e-commerce metrics is definitely one of them.
In this edition of the NewsCatcher, we’re going to explain why it’s important to engage in e-commerce analytics. We’ll also share with you the key e-commerce KPIs that you need to track if you want to improve your organic e-commerce effectiveness. Let’s dive right in, and begin with a question:
Why is it important to track e-commerce metrics?
E-commerce businesses that consider themselves successful make data-informed decisions rather than relying on assumptions. And the first step to effective data gathering is agreeing on the right metrics and KPIs. They give you a good indication of how your e-store is performing. This ranges from telling you how much you sold during the day, week, or month, to showing the average value of all the items purchased during a specific time period.
Now, there are many metrics you can track, which can be a bit overwhelming. That’s why it’s important to focus on those that have the biggest impact on your e-commerce effectiveness. Take a look at our top recommendations below.
E-commerce KPIs – key metrics to track
Let’s begin with the first metric – the correlation between share of voice & market share.
Share of voice & market share
Simply put, ‘share of voice‘ is the overall reach and volume of information customers can see about your brand, as compared to your competitors. And while share of voice is a very popular e-commerce KPI on its own, it’s better when cross-referenced with your brand’s market share. 
To do this, start by looking at the number of keywords in your product listings, and check how highly they rank in search in e-commerce stores. Next, ask yourself – how do these numbers correlate with the revenue and volume of orders? In the end, having enough exposure is just one part of success – it’s also vital to get your items into customers’ baskets and sold!
Share of pages in the ‘top 5’ search results
In e-commerce, when we say ‘top search results’, we have two things in mind. First, your brand’s ranking on Google (i.e., whether a person sees your products at the very top of search results when typing your brand name or category into search). And second, we mean rankings on actual e-commerce sites like Amazon and Walmart (in other words, when a customer uses the search engine of these websites).
You might be wondering “how do these two differ exactly?”. It comes down to user intent and how far a person is down the sales funnel. Queries and terms entered into e-commerce sites are, at their very core, product-related. This means consumers are quite ready to buy. With Google, this isn’t always the case, as those searching may simply be seeking general information. For example, picture someone entering “hydrating face cream” into Amazon versus one entering “my face is dry” into Google. See how these two consumers differ in their awareness and decision-making paths? And with this in mind, just as the strategy and stage of the sales funnel differ across various channels, it’s also crucial to choose keywords for each platform separately. For this same reason, we don’t recommend comparing results from e-commerce platforms to those from Google.
Speaking of readiness to buy, let’s proceed to the next e-commerce KPI.
Number of sales coming from organic search
Another e-commerce metric worth tracking is the number of sales you get from organic search. You will be able to assess two factors:
- your reach, i.e., how many prospects view your content
- your conversion rate, i.e., the percentage of prospects who buy your product after seeing your content
If you notice that despite having a wide reach (that is, dominating the top search results for your brand’s category), the number of sales is low, this could indicate that your product listing content needs optimization. Alternatively, there might be usability issues with your e-commerce site that are stopping your leads from converting.
Glance views – product conversion rate correlation
Glance views is an e-commerce KPI first created by Amazon. It points out the number of times a particular product page was displayed. Contrary to impressions, it doesn’t indicate the number of people who viewed a specific element (most often, a link or visual advertisement).
How are glance views related to product conversion rate? The product conversion rate tells you how many consumers finalized their purchase after viewing the detailed product page. As a result, you know how many purchases come from glance views, and you can assess whether your listing has effective messaging and the right keyword optimization.
Let’s proceed to the final e-commerce metric in this piece:
Average Order Value (AOV)
Your average order value is one of the most important e-commerce KPIs that you can track. It gives you a lot of information about your customers’ buying patterns, online advertising spending, and product pricing. If you notice that your AOV is quite low, you can do three things:
- upsell – encourage buyers to add a more expensive item to the cheaper one, but pay a low fee for it
- cross-sell – offer products which are complementary to the ones they buy, for instance, a shampoo and a hair conditioner
- product combos – offer 3 products for the price of 2
A higher AOV indicates high effectiveness of the above mentioned strategies. In the case of returning customers, it also shows consumer trust – the higher the AOV, the higher the trust.
Before we wrap up this piece, here are a few key takeaways:
For starters, while we recommend tracking all five of the KPIs we’ve just discussed, remember that the metrics you monitor should be tailored to your goals. In the end, as the saying goes, “not everything that can be counted counts, and not everything that counts can be counted”.
Following that, to derive credible results, you need to treat KPI assessments as a continuous process. It’s not about ‘ad hoc’ measurements used to give you favorable numbers, but rather about collecting all sorts of insights – the good, the bad, and the ugly – and using them to refine your strategy.
Finally, when you decide on your e-commerce KPIs, make sure that they’re understood by the entire team. They need to be inclusive and easy to interpret – that way, you’ll be able to get internal buy-in, for the long run.
If you’re looking to learn more about e-commerce optimization, be sure to subscribe to the NewsCatcher. You’re also welcome to reach out – we’d love to give you a helping hand with your e-store at MolecularBBDO.