An Introduction to Ecommerce
Ecommerce is ever-changing.
The digital world is continuing to grow and with consumer confidence at an 18-year high, online shopping has successfully integrated itself into our tech-driven lives. You can buy almost anything off the internet with a click of a button.
With ecommerce thriving comes increased competition.
The most successful ecommerce businesses are metrics-obsessed and look ahead to the future. In short, to succeed in this growing industry, you’ll need to acknowledge the recent ecommerce trends, understand your business health and make key decisions guided by data.
Luckily, that’s what you’ll learn in this guide. We’ll give you the 101 on ecommerce trends, why KPIs are important for your success, what ecommerce KPIs you should be tracking and how to monitor your online store performance.
Keep reading to learn more, or use the chapter links below to jump to what matters most to you.
Ecommerce in 2019
Every year, there are innovative changes that can help grow our businesses and new challenges that we may look at as hurdles. With technology snowballing and rising customer expectations, online stores with a forward-thinking approach to ecommerce excel and win. Want to keep up? Here are 7 ecommerce trends to consider.
- Take it to social
- Mix in multi-channel selling
- Make payment processing faster
- Be loud and clear with voice search
- Chat, chat, chat with customers
- Personalize the shopping experience
- Make friends with mobile
1. Take it to social
Social media platforms are more than just advertising channels. People anywhere in the world now have the ability to quickly and conveniently make a purchase on their favourite social platform. Examples of social platforms that have improved their technology for this trend to be possible include: Instagram, Facebook, YouTube, and Snapchat. These platforms have rolled out buy buttons, shoppable posts, product tags, stickers, codes and more to make shopping timely and productive. If your customer base is online, it’s on social media at least one-third of that time.
2. Mix in multi-channel selling
Similar to what's mentioned in social selling, people aren’t just using one channel to make purchases online. According to The 2018 Omnichannel Buying Report, 87% of consumers in the United States shop offline. 78% make purchases on Amazon, 45% in a branded store online, 65% in a brick-and-mortar store, 34% on eBay, and lastly, 11% on Facebook. These numbers prove just how profitable it can be for ecommerce businesses to cater to the needs of multi-channel shoppers. Consider using popular channels such as: eBay, Amazon, and Google Shopping, on top of your own online store. And don’t forget about social media!
3. Make payment processing faster
The final stage in the customer’s journey. How simple or tricky the payment process is could make or break a sale. Unfortunately, if the experience at this stage isn’t effortless or you’re missing the key payment channel in the minds of your customers, you could end up without a sale. According to the Baymard Institute, almost 70% of shoppers abandon their carts. This suggests that even after researching and choosing products by adding them to their cart, a majority of shoppers still don’t complete the payment process. This exact report also found that 28% of cart abandonment occurs because of a long or complicated checkout process.
For these reasons, it’s important to consider adding new payment options. Digital wallets including Google Pay, Paypal, and Apple Pay allows customers to make purchases through electronic transactions creating a smooth shopping experience. More and more, the majority of people believe digital payments will overtake cash and cards. Other payment options to remove friction include accepting multiple currency options, saving credit card information, and providing flexible payment plans.
4. Be loud and clear with voice search
Shopfiy stated that over 20 percent of search queries are made via voice now, and field experts are predicting 50 percent of search to be completed using voice by 2020. The introduction of voice devices such as Amazon Echo and Google Home, has added a whole new level to how people interact with brands and make purchases through voice-activated online browsing. Voice commerce is any transaction with a business that occurs using a voice device. According to TechCrunch, by 2020, voice commerce will generate a total of $40 billion in sales in the U.S. alone. So how can you play around with this trend? First, make sure your ecommerce site and/or mobile app is responsive. Second, get creative. Can Alexa help recommend a product or guide a visitor through their buying journey? Think about how you can stand out against your competition while creating a positive experience for your customers.
5. Chat, chat, chat with customers
Ultimate user experience and customer service is everything these days. More and more, businesses are finding new ways to connect and interact with their customers at different steps of their buying journey. From targeted ads and mobile text messages, to chatbots and Facebook Messenger, it seems like the opportunities are almost endless to get in touch with your customer base.
Speaking of chatbots, Gartner predicts that 25 percent of customer support will be integrated with virtual assistants by 2020. With machine learning in full effect, chatbots are getting smarter. With customers expecting quick informative answers to their questions, chatbots can swoop in to save the day while saving your customer support team’s time. If you haven’t played around with your own chatbot yet, do it! Check out Drift or Intercom to get started.
6. Personalize the shopping experience
43% of people prefer companies that personalize their shopping experience. According to Accenture, 33% of people have also ended their relationship with a business for having minimal to no personalization. The days where personalization was just about recognizing a customer by name have disappeared. Now, personalization is about creating an individualized and unique shopping experience for each of your potential customers. How? By analyzing known personal information about your potential customers such as: demographics, browsing actions, buying history, and others.
Using this information, you can target messaging and your product selection to customers all around the world, based on what they like/don’t like, their location, and what they’re interested in. Personalized product or cart recommendations are now judged as mainstream on ecommerce sites and should likely be an aspect of your shopping experience. Other examples of personalization opportunities include: behaviour-based emails, weather-sensitive content, geo-location targeting, and product category-specific discount codes.
7. Make friends with mobile
The convenience of shopping right at your fingertips. With 62% of people accessing the internet using their mobile phones and the number of smartphones users projected to reach 2.87 billion globally by 2020: shoppers can now browse and purchase products, whenever and wherever they want. In terms of jumping into this revolution for your own online store, ensure mobile is user-friendly. As mentioned above, experience is everything. Whether it be a mobile app or mobile-friendly website, make sure it is optimized for the user as well as search. Push notifications for discounts, special offers or reminders provide an interactive way to promote your ecommerce store and engage your potential customers. And this last one may be obvious, but typing in details on mobile is the worst, so make sure the mobile checkout/purchase steps are seamless and easy to complete (see trend #3).
Why You Need KPIs In Ecommerce
As mentioned, the most successful ecommerce businesses are future-forward (testing out some of the trends) and metrics-obsessed. It is this obsession with measuring and optimizing performance that allows their online stores to grow so quickly.
But, they don’t optimize every single metric available. They only optimize the right metrics. And this is where KPIs come in.
KPI (Key Performance Indicator) is: A measurable value that demonstrates how effectively you’re achieving your key business objectives. KPIs help establish the underlying strategic goals of your business and set targets you can work towards to achieve success. Without KPIs, it’s difficult to gauge progress over time.
Businesses use KPIs at multiple levels of their organization to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the business, while low-level KPIs may focus on processes in departments such as sales, marketing, support and others.
So… why is this important for ecommerce? Imagine a brick-and-mortar store. But not just any brick-and-mortar store. One that comes equipped with a special tracking device.
One that allows you to see how many people have visited your store, which products were purchased most often, how close visitors got to checking out – even the marketing campaigns that caused visitors to arrive in your store in the first place.
These are the sort of details you can grasp from ecommerce.
Running an online store gives you data that traditional businesses could only dream of. So it only makes sense that you would create a distinct set of KPIs to drive actions and measure your online store success.
Top 50 Ecommerce KPIs
In a world that’s focused online, it’s no wonder ecommerce is booming. We know that managing an online store isn’t easy, and with a ton of viable data, it can be hard to know which metrics to focus on. This curated list of the top 50 ecommerce KPIs will help you stay on top of the most important data to drive your store to success. This list includes sales, financial, customer service, marketing KPIs, and even some metrics specific to Black Friday and Cyber Monday.
- Cost Per Order: The average advertising costs that go into generating a single sale.
- Coupon Conversion: The number of coupons being redeemed by customers.
- Items Per Order: The number of items purchased per order.
- New Customer On First Visit: The number of users that buy items on their first visit to your site.
- Product Views Per Session: The average number of products a potential customer views during their session on your online store.
- Returning Customers: The number of customers that keep coming back to your online store.
- Revenue From New Visitors: The total amount of revenue coming in from new visitors.
- Revenue from Repeat Online Customers: The total share of revenue that is coming from repeat customers.
- Revenue Per Visitor: The total amount of revenue generated by a single visit to your site.
- Shipping Error Rate: The number of shipping errors that have occurred.
- Shopping Carts Abandoned: The number of users adding products to their shopping cart but not checking out. The lower the number, the better. If your cart abandonment rate is high, the checkout process may be tricky or take too long.
- Shopping Cart Conversion Rate: The number of shopping carts started versus the number of shopping carts that progress to a successful order.
- Shopping Cart Sessions: The number of shopping cart sessions on your site.
- Shopping Session Length: The average amount of time a single visitor spends on your site.
- Unique Online Buyers: The number of unique buyers that have visited your site.
- Average Order Value (AOV): The AOV is the sum of generated revenue divided by the total number of orders. This KPI can give you a better understanding of your customers’ spending habits, including which products fit their price range best, and will also help you identify opportunities to upsell or promote special offers.
- Cost of Goods Sold (COGS): How much you’re spending to sell a product. This includes manufacturing, employee wages, and overhead costs. This KPI can be used to make production more efficient and increase profits by decreasing avoidable costs.
- Gross Profit Margin: How much profit you make on each dollar of sales before expenses. This ratio is calculated by looking at the difference between production costs (excluding overhead, payroll, and taxes).
- Inventory Turnover: How often you are able to sell off your entire in-stock inventory in a given year.
- Net Profit Margin: How effective your business is at generating profit on each dollar of revenue you bring in. This KPI is a measure of the profitability of your business and is key in making both short and long term financial decisions. Understanding this KPI may even give you an advantage in a pricing war with your competitors.
- Number of Sales: Breaking number of sales down can reveal key details about your online store and how it compares to the ecommerce industry. For example, hourly and monthly sales can help you in gauging your marketing or customer service efforts in near real time, quarterly sales can reveal seasonality, and annual sales can provide a longer view into your site performance.
- Average Resolution Time: The amount of time it takes for a customer support issue to be resolved.
- Chat Sessions Launched: The number of live chat sessions launched tells you how many users engaged with the tool to speak to a virtual bot or customer service rep.
- Churn Rate: How quickly customers are leaving your brand.
- Customer Lifetime Value (LTV): How much a customer is worth to your ecommerce business over the course of their relationship with you, or, the estimated amount of total purchases a customer will make over the lifetime they are with your brand You want to increase this number over time through strong relationships and loyalty.
- Customer Retention Rate: How many active returning customers you have during a given time period. This KPI is the percentage of customers you have relative to the number you had at the start of that period of time. Customer retention rate will help you monitor one-time purchase habits for specific products and their categories, so you can then look for ways to bring these customers back to your store with discounts, upsells and others to increase the value of their purchase.
- Customer Satisfaction: The quality or your support team’s efforts. It is important to monitor your satisfaction status, as the opinion of your customer base can make or break the success of your ecommerce business.
- First Response Time: The average amount of time it takes a customer to receive the first response from your customer service team in a query.
- Live Chat Count: The number of live chats.
- Net Promoter Score (NPS): How likely customers are to recommend your brand to someone in their network.
- Number and Quality of Product Reviews: The description is in the name of this KPI. Product reviews are key for a few reasons. They provide social proof, they can help with marketing efforts, and they give you valuable feedback for your business to consider.
- On-Time Delivery: The timeliness of your deliveries.
- Bounce Rate: How many visitors exit your site after viewing only one page. If this number is high, you’ll want to look into why visitors are leaving your site instead of exploring it.
- Conversion Rate: The percentage of visitors to your site who make a purchase and convert into actual customers. To determine your conversion rate, take the total number of sales divided by the total number of visits to your site.
- Cost Per Acquisition (CPA): The amount you pay for a customer acquisition, lead or sale. This is defined by you based on your marketing efforts.
- Customer Acquisition Cost (CAC): CAC combines the cost of your marketing efforts and the revenue your site is bringing in. This KPI highlights your bottom line and allows you to measure how effective your paid advertising really is. The higher the number, the more expensive it is for you to acquire new customers. CAC can be broken down by specific marketing channel so you can see which channels are most effective and worth putting in extra dollars for, and which ones are the least effective and should be minimized or further optimized.
- Day Part Monitoring: The time of day that visitors come to your ecommerce site. This is helpful in understanding if you are optimizing your marketing channels such as social media and email.
- Email Open Rate: The percentage of subscribers that open your emails. If you have a low email open rate, you try testing new subject lines or cleaning your list for inactive subscribers.
- Email Click Through Rate: The percentage of those who actually clicked on a link after opening.
- Exit Pages: Which pages your customers lose interest on your ecommerce site. This KPI will help you make improvements to the content on those pages.
- New Leads Generated: The number of new leads that have been added to your system during a specified time period.
- New Visitors Vs Returning Visitors: New visitors are first time visitors to your online store site. Returning visitors are those who have been to your site before. Marketers can use this KPI to help gauge success of advertising campaigns. If you’re running a retargeting campaign for example, returning visitors should be higher.
- Return on Ad Spend (ROAS): The revenue generated from your advertising efforts divided by your marketing costs.
- Site Traffic (or Mobile Site Traffic): The number of visits to your ecommerce site. More site traffic means more visitors are hitting your store.
- Social Media Engagement: How actively your followers are interacting with your brand on social platforms.
- Social Media Followers: Whether you’re on Facebook, Instagram, Twitter or a combination of a few social platforms, the number of followers you have is helpful in gauging customer loyalty and brand awareness.
- Time on Site: How much time visitors are spending on your website.
- Traffic Source: Where visitors are coming from or how they found your ecommerce site. This will provide information about which channels are driving the most traffic. Examples: organic search, paid advertising or social media.
- Unsubscribes: The number and rate of unsubscribes for your email list.
- Visits To Purchase: The average number of site visits before a purchase is made.
How To Track Ecommerce KPIs
Before tracking your KPIs, it’s important to ensure you’ve customized your KPIs to your online store’s situation, and have made them actionable and attainable to help achieve your ecommerce business goals/objectives.
Dashboard software empowers you to turn data into insights for easy KPI tracking and monitoring, on a daily or monthly basis. Dashboard software gives you the ability to connect or enter all of your data into an organized system for faster and more accurate data collection. It allows you to use visualizations so you can better understand your data from a number of KPIs, all in one place.
“The flexibility of the dashboards allow me to make informed decisions about the state of my business on a minute by minute basis.” – Eureka Supplements
Visualizations display your data in an easy-to-read, colourful way. It’s definitely a better way to get your team understanding your numbers and gaining deep insights, rather than in long presentation formats. On top of data visualizations, you can receive instant reports on performance, and alerts when a KPI is over or under achieving, giving you a competitive edge in this changing space.
“Your dashboards give us actionable insights!” – Headphone Zone
Using Klipfolio to Track Your KPIs
How To Build an Ecommerce Dashboard
- Connect your data
- Select your metrics
- Build your dashboard
- Share your masterpiece
- Gain more confidence
Upload your spreadsheet or choose another integration such as Dropbox or Google Drive to get started, the choice is yours. Once you upload your data, Klipfolio does the rest.
All you need to do is let Klipfolio know what you want to track so figure out what’s most important for you and your team to track. If you need a push to get started, Klipfolio makes it easy to get up and running with pre-built dashboards Klips and PowerMetrics.
Pretty much everything is customizable in Klipfolio. Move your data around to create a dashboard that makes sense to you, change colours, and add some vibrant graphs, charts, or indicators.
Emails. PDFs. Web links. Presentations. TV dashboards. There’s no shortage of ways you can share and view your Klipfolio dashboard with your colleagues. Sharing your metrics and KPIs becomes a routine part of your workday with no need to scramble in preparing for conversations, big and small.
Practice makes perfect right? With tons of resources (see below) and a friendly Support team, Klipfolio is here for you every step of the way.
“We all love Klipfolio. The tool is powerful enough that it sells itself without our org. The dashboard TVs, automated snapshots, and ease of access anywhere has made Klipfolio extremely visible to all teams. More teams want to build boards.” - Revinate
Read, watch, and learn. Klipfolio and these other expert resources give you everything you need to get up and running, as an online business and KPI reporting wiz.
Here's what you need to remember.
With new technology popping up around every corner, the digital world is growing and growing, fast.
In order to keep up, the most successful ecommerce businesses are metrics-obsessed and look ahead to the future. In short, to succeed in this industry, you’ll need to recognize the recent ecommerce trends, understand your business health and make key decisions guided by data and your KPIs.
Use tools, analytics, and other resources to stay in-the-know, and then track your progress to tweak your ecommerce strategy when needed. Enjoy the challenging journey and get that win!