Twenty-four million. That’s roughly the estimated number of eCommerce websites that are floating on the internet today, with many more popping up every single day.
Now, that’s a huge number. A number that represents the kind of competition your eCommerce website is facing or is about to face, that’s if you are just joining the bandwagon.
However, that should not deter you. In fact, it is also estimated that no more than one million of these eCommerce websites sell more than US$1,000 per year.
This goes to show that there’s indeed more than enough space for your eCommerce website to flourish.
Here’s another statistic that will wet your eCommerce appetite – it is projected that 95 percent of all purchases will done be through eCommerce by the year 2040, this is according to Nasdaq.
Now, that’s a relief, right?
But wait, don’t celebrate just yet! You will still need to do a bit of work on your platform to make it successful.
You see, an eCommerce business should be guided by the state of its performance. You should know which levers to push for growth.
To measure the impact of your sales and marketing activities, you need to be guided by the right performance metrics. These metrics will help you to know your customers better, maximize conversions and increasing the value of what you are offering.
Here’s the thing. To create an online store and grow your ecommerce business is the easy part. The internet is filled with sites, tutorials and templates that can guide you on how to create a killer online store.
However, measuring your eCommerce website success is actually where the rubber meets the road.
In this article, we highlight some of the key strategies that will guide you to effectively measure your eCommerce business performance and grow your site.
4 eCommerce Metrics that Will Help You Measure Your eCommerce Success
1. Sales Conversion Rate
What site managers and business owners should seek to know is, ‘how does our conversion rate compare?’. You may have a lot of social followers and page views but that’s OK. If the people who do visit your website actually buy, you’re better off than having a few million social media followers who just like your photos but never make a purchase.
The conversion rate equates to dividing the number of sales by the number of unique visitors/visitors’ sessions. The conversions get more useful when broken down by different categories of visitors with diverse intent and different relationships with the business.
2. Site Speed
Fast load times are key to the success of your online business. This will tell you how engaged your customers are with your content. If customers stay longer on-site, then the chances of them converting are higher.
To improve your eCommerce site’s speed you need to:
- Compress images: Optimize every image on your website. The quality of the image is measured in pixels per inch. The higher the number of pixels, the sharper the image. Consistent image dimensions will enable the website to load fast.
- Reduce redirects and redirect chains: Each time a page redirects to another page annoys a customer because they have to wait for the request-response cycle to complete. This slows down the site and gets on your visitor’s nerves prompting them to look elsewhere.
- Use Content Delivery Networks (CDN): CDNs minimize the distance between your website visitor and your server. CDNs will boost the speed of your website response time. This, in turn, will wow your visitors with excellent user experience.
3. Traffic Source Analysis
Your traffic sources give you the finer details of exactly where your consumers are coming from and how they arrived at your site. Knowing the source helps you to identify which sources are the most lucrative, hinting that you should invest more in them.
Correctly identifying traffic sources will also help you know which ones need optimization and which you should abandon completely.
The chart below is a clear indication that, as a business owner, you can’t rely on one source of traffic. If one source generates traffic today, it doesn’t mean it will tomorrow, too! Plus, what happens if the source goes away? For instance, if the bulk of your traffic comes from Facebook and Facebook goes bankrupt in a moth, how will you make sales?
4. Shopping Cart Abandonment Rate
If you have a high cart abandonment rate, then you definitely need to optimize your checkout process. Data compiled from 33 different studies on shopping cart abandonment the rate put the average at over 68 percent.
In simple terms, for every 100 visitors to your store, 68 of them walk away. This is a high number of abandonment that should prompt you to quickly adopt strategies to reduce this behavior and recapture lost customers. Here are some handy tips:
- Build trust in the buying process by reassuring your customers that their personal and financial data is secure.
- Reduce price shock: Each cost the customer incurs in the purchasing process should be clear and transparent even as they browse through your product lineup.
- Make navigation easy by avoiding too many clicks. Create categories that are easy to identify and organize the products to make selection easy.
- Reach out to customers when they abandon carts and ask if there is any way you can help then complete the transaction. They will appreciate you took the time to help.
- Add social proof: As a business owner, you do not want customers to regret spending their money. After a purchase, always follow up for a product review. You can feature the reviews on product pages.
There are hundreds of eCommerce metrics that you can measure. But not all of them speak about your bottom line. Focus on those that do!
Forget about traffic numbers and focus on traffic sources, for instance. Useless visits won’t pay your bills. Neither will social media followers, unless they are hyper-targeted and loyal buyers that you can easily turn into brand ambassadors.
After all, this is what eCommerce success is all about: sales, not vanity metrics!