Best Key Point Indicators (KPIs) for an Ecommerce Business

KPIs, or Key Performance Indicators, helps in recognizing how adequately something is functioning.  However, selecting the appropriate KPIs for eCommerce is a difficult task. Furthermore, many companies are not maximizing the value of crucial insights and analytics.


Many are unfamiliar with the phrase KPIs, which results in a good chance for businesses to digitize being wasted.


So, the question comes of what are these KPIs, and which ones do you need to keep watch of? 


There is no one solution that can fit all the requirements. There are, however, some KPIs that might be useful for a variety of online enterprises.

eCommerce KPIs Defined

A KPI, or key performance indicator, is a metric that measures how well an individual or a company performs following its main goals. 


In 2021, you will find a huge data for enterprise marketers to sort through. Browsers, values, devices, demographics, conversions, and so on – the list continues. 


Furthermore, technologies such as Google Analytics and others place a greater emphasis on giving the data that organisations require. However, it is hard to turn into targets that measure success without the use of helpful KPIs.

Importance of eCommerce KPIs


KPIs are important since they assist in the improvement of a company’s website performance. 


The indicators are consistently monitored and assessed, resulting in recommendations for improvement based on real-time data. 


Also, KPIs lead to improvements in data such as time on site, bounce rate, and other metrics rather than making decisions based on assumptions. 


This is why you should use tools like Google Analytics to track the KPIs of your eCommerce website. Furthermore, KPIs must be considered before making any conversion rate optimization or search engine decisions.


This is because website performance indicators give you unique, relevant, and precise information that can help you maximize eCommerce sales and drive appropriate revenue and visitors.


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Effective eCommerce KPIs to Track for Your Online Store

#1. Conversion Rate

Conversion Rate

What are the results of your CTAs? Are they sufficient to convince your audience to purchase your products, or do you need to put in more effort?


The conversion rate is here to define and showcase it all!!


Every online business needs to rely heavily on conversion rate. It is the rate that specifies the percentage of the target market audience that is performing desired actions. 


A high conversion rate implies that you are capable of convincing huge traffic to purchase your goods or services. 


On the other hand, a lower rate indicates that fewer clients are interested in purchasing from you. Or that your target audience isn’t sufficiently reached.


Knowing the buyer’s capacity who visited your site and presenting the patterns, you can improve the eCommerce performance. You may more effectively target web users in the marketing funnel this way.


The conversion rate of any online eCommerce store is determined by a variety of factors.


For example, some people may be happy with a conversion rate of 5%. Others may be hoping for a conversion rate of approximately 20%.


While your goal may be to improve your conversion rate, it’s also important to clarify a few things before making significant decisions. These may include:


  • In my industry, what is the average conversion rate?
  • Is the product rate priced too expensive, or is there another explanation for the low conversion rate?
  • Do I need simple solutions to make the buying process simple? 


Conversion rate optimization is something that eCommerce business owners should focus on to boost their conversion rate. 


CRO helps to evaluate the buyer’s journey and make adjustments along the way, resulting in a greater focus on key KPIs.


For advanced assistance, you can calculate the conversion rate using:


Conversion rate = (Conversions/Visitors) x 100

#2. Customer Retention Rate

customer retention rate

Naturally, your business will expand as you continue to reach out to new and potential customers. However, you cannot overlook the fact that customer retention is critical to long-term success.


Having clients back to your business indicates that your SEO efforts are paying off. Or it implies that repeat customers are critical to increasing client retention.


As a result, businesses must track their customer retention rate to see if their clients are interested in their products. Furthermore, a rating like this will help them in determining why clients stay or go.


All in all, this will help drive the new customers naturally. 

#3. Return on Ad Spend

return on ad spend

Return on ad spend, or ROAS is a measure that eCommerce companies leverage for executing online advertising. 


Furthermore, it allows you to assess the efficacy of an advertising campaign and make the necessary changes. One issue that frequently arises in the minds of business owners is: “What is the simplest approach to track ad spend across various channels?” 


You can leverage the free Google Ads and Facebook Ads dashboard to better view the metrics and calculate the ROI on ads on these platforms. 

#4. Cost Per Acquisition

cost per acquisition

The one critical key metric that one can not overlook in eCommerce is the CPA (Cost Per Acquisition). 


It is the key statistic that can be used to simply assess other KPIs to see if they are operating at reasonable levels.


As a result, if we are familiar with our CPA, we can predict our ROI with assurance and grow up the business effectively.

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#5. Customer Lifetime Value

customer lifetime value

CLV is another important eCommerce KPI. You can predict your customer’s lifetime spend by calculating this metric.


Assess your clients’ lifetime worth to better plan for the future and to drive your acquisition or marketing campaign. In most circumstances, you’d like to raise your CLV.




This is because selling things to a current consumer is easier than to a new one. The following are some suggestions for improving the CLV.


  • Bundling increases product demand.
  • Simplify purchasing procedures for your shoppers.
  • Add more information to your product listings.
  • Engage with customers and note out their actions.
  • Reward your loyal customers with loyalty rewards, exclusive discounts, and more.


Additionally, it’s critical to think about your consumers and products as you work to improve your Customer Lifetime Value. 


This is because bundling may not be effective for your company if any of the products on your list are expensive.


#6. Gross Profit

Gross Profit

Many firms overlook the Net Profit statistic, knowing that it is a vital indicator of an eCommerce company’s overall health.


As a result, determine how much money you’re bringing in and can spend on customer service and marketing activities.


Similarly, retaining net profit is an eCommerce KPI worth monitoring for large businesses.


Although it may not come with the same risks in terms of the business’s sustainability, you can bet that your sales department is considering it. 


Thus, it’s crucial to consider how major modifications such as discounts, rewards, offers, shipping, and campaigns can affect profitability.


Overall, these techniques can increase conversions but can harm the bottom line. As a result, focus on your profit margin and net profit when implementing all these techniques. 

#7. Website Traffic

Website Traffic

One of the obvious key performance indicators that an eCommerce site owner will want to monitor is website traffic. 




The more traffic you have on your site, the better are your possibilities of converting visitors into potential customers.


The goal of any eCommerce website is to increase site visitors. Furthermore, such traffic not only leads to sales but also raises your company’s visibility.


In this way, one of the most significant aspects – website metrics to measure – is your website traffic.  As a result, keep a close eye on your website traffic for sudden increases and drops, as well as other unexpected trends. 


You can also use Google Analytics to track if other social media platforms or recommendations are providing you traffic. 


Of course, knowing where most of your traffic comes from can help you figure out how to reach the vast majority of your site visitors. 


#8. Bounce Rate

bounce rate

The bounce rate of a website is the percentage of visitors leaving the site after landing on it.


This KPI can be applied to all visitors who leave the site without purchasing anything. However, a high bounce rate shows that the majority of visitors were unable to find what they were looking for. As a result, this makes an important metric for any online business. 


Relevancy is one key factor to keeping the bounce rate low and making the visitors spend more time on the site. 


For example, you have an online store offering “feather hats” for women and what all your SEO efforts focus on are the “hats” only. 


The term “hat” is a broad term. Also, it can indicate many things depending on the search and need of the person conducting it.


You can easily see how your bounce rate will be affected if you rank your site for the “hat” keyword and the majority of your visitors are men.


In reality, Google considers your website’s bounce rate when determining how to perform for specific keywords. As a result, you must focus on the KPIs.


Additionally, if you’re targeting broad keywords that are creating a high bounce rate, consider focusing more on long-tail keywords.


#9. Product Performance 

product performance

Product performance is also a critical KPI or business metric. 


Understanding the performance of each product you offer is critical for tracking business performance and customer satisfaction.


This can include considering the product reviews. These leave the most of the influence on the business success.




This is because over 80% of buyers believe that online reviews have influenced their purchasing decisions and practices.


As a result, keeping an eye on the type of reviews and the number of reviews is vital.


For example, if you sell a product on numerous platforms such as WooCommerce or Amazon, you’ll need to set a time to review it.


After you’ve gone over the reviews, make sure your staff or the department in charge of this takes care of any unsatisfied feedback.


In addition to the reviews, you must determine which of your goods performs better on third-party retailer sellers, 


Also, you can take control of your products on third-party retail sites if you understand and can monitor the success of your product.


Overall, evaluating all of these factors and working on reviews can assist you in improving your business, goods, and services.


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Of course, KPIs are confusing, annoying, and hard to execute.


However, investing time and effort into tracking all these KPIs will surely lead to success. So, work on analyzing your brand’s data and implementing the relevant insights that can help you move forward.


We realize how challenging it may be for businesses to track the performance and objectives of their eCommerce site.


Therefore, the Magentofx team, a Magento eCommerce development agency, is here to help you with eCommerce performance indicators. We can help you create consistent goals and improve your online store to match your SEO, digital marketing, and eCommerce abilities.


Call us today to see how we can help you manage your eCommerce business more efficiently!!