In the cutthroat world of e-commerce, stagnation means falling behind. How can you keep a pulse on your business and ensure you’re always progressing toward your goals?
Three words: key performance indicators.
What Are E-commerce KPIs?
Key performance indicators (KPIs) are metrics that help sellers track their progress toward specific business goals. In e-commerce, KPIs typically measure performance in business-critical areas like marketing, sales, and customer service.
For example, DTC brand Lovevery sells high-end toys individually, in bundles, and through several popular subscription models. Here are a few of the KPIs the company might track:
- To measure how much it costs to gain a new customer: Customer Acquisition Cost
- To reveal how efficiently they’re producing toys: Gross Profit Margin
- To gauge which subscription offers are the most successful: Customer Retention Rate
There are a ton of KPIs you can track. But which ones are the best for measuring your online store’s performance? Let’s dive in and take a closer look at some of the top e-commerce metrics.
Top E-commerce KPIs to Track
Benefits of Tracking and Analyzing the Right E-commerce KPIs
When you choose the right KPIs and consistently work on improving them, your online business can reach levels you only dreamed of.
Here’s how a solid set of metrics can help you grow.
- Stay on track and meet your goals. KPIs help you set goals and then prioritize the most crucial work to achieve them.
- Make better business decisions. Spotting trends in your data quickly gives you a competitive advantage and helps you make the right decisions at the right time.
- Catch issues before they blow up. Without tracking KPIs, significant business problems can sneak up on you and tank your profitability.
- Motivate yourself and your team. Using KPIs to track key milestones can be a huge motivator to stay the course and prove that your efforts aren’t wasted.
For e-commerce merchants and sellers, pursuing growth without carefully selecting the right KPIs will be, at best, frustrating. At worst, it could cause you to move away from your goals.
Here’s a closer look at the top e-commerce KPIs for marketing, sales, and customer service — plus, why they matter and how to incorporate them into your growth plan.
Top Marketing KPIs for E-commerce
1. Store Traffic Volume
This high-level metric tracks how many visits your e-commerce website or marketplace store gets over a given period of time. While it doesn’t mean much on its own, it’s a useful leading indicator. If traffic volume significantly increases or decreases, you’ll want to investigate why using a platform like Google Analytics, then take steps to increase your number of site visitors via search engine optimization (SEO) and other methods.
💡 Why Traffic Volume Matters
- See whether your digital marketing efforts are successfully driving shoppers to your store or e-commerce site
- More traffic gives you a bigger pool of potential customers to convert
📈 Formula for Store Traffic Volume
Traffic Volume = Total Number of Visits in Selected Date Range
2. Conversion Rate
Your conversion rate is the percentage of visits to your store that result in sales. Note that most sellers use visits (or sessions) rather than unique visitors.
💡 Why Conversion Rate Matters
- Helps you understand the customer journey and how different factors influence users’ intent to purchase
- Focusing on conversion rate optimization lets you earn more revenue from the same amount of traffic
📈 Formula for Conversion Rate
Conversion Rate = Number of Sales / Number of Store Visits
3. Social Media Engagement
An engaged social audience is a valuable asset for any retail business. Engagement measures the degree to which your audience interacts with your brand on social platforms.
💡 Why Social Media Engagement Matters
- Gauge whether your social content is hitting or missing with your target audience
- Higher engagement sets you up for wider organic reach and potential viral traffic to your store
📈 Formula for Social Media Engagement
Social Engagement Rate = Number of Reactions+Shares+Comments / Number of Followers
You’ll also want to calculate this for each social media channel so you can see where your community is most engaged, and which channels may need some effort.
4. Email Click-Through Rate (CTR)
Email CTR is the percentage of email recipients who click on a link in your email. While this is more of a vanity metric, it can help you understand what resonates with your audience, as well as optimizing days or times to send messages.
💡 Why Email CTR Matters
- Shows the effectiveness of your email marketing campaigns with a low CTR indicating potential issues with your content or your email list
- Optimizing CTR can bring more store traffic without increasing your investment
📈 Formula for Email CTR
Email CTR = Number of Unique Clicks / Number of Delivered Emails
5. Customer Acquisition Cost (CAC)
CAC reveals your total cost in sales and marketing expenses to get a new customer. This KPI is also called Cost Per Acquisition (CPA). You should have your overall CAC rate for your business, but you may also calculate it per channel as well.
💡 Why CAC Matters
- No matter how much you’re selling, an astronomical CAC can mean your business isn’t profitable
- CAC measures the effectiveness and efficiency of your sales and marketing strategies
- It keeps you focused on the numbers and enables data-backed marketing decisions
📈 Formula for CAC
CAC = (Cost of Sales + Cost of Marketing) / Number of New Customers
6. Return on Ad Spend (RoAS)
RoAS measures how much revenue you earn for every dollar you spend on advertising. In other words, it shows how efficiently your ads convert eyeballs into sales. There is some debate on whether it’s preferred to measure RoAS or TACoS (Total Advertising Cost of Sales).
💡 Why ROAS Matters
- Reveals the profitability of your marketing campaigns
- Helps you forecast expected sales from a given campaign budget
- Optimizing your creative and targeting for RoAS keeps you focused on the bottom line
📈 Formula for ROAS
ROAS = Revenue from Ads / Cost of Ads
Top Sales KPIs for E-commerce
7. Total Sales
Of course you’re tracking sales! But, like store traffic volume, we’ve included it in this list to make sure you don’t miss the forest for the trees. Changes in your total revenue can be a major signal of both challenges and opportunities.
💡 Why Sales Matter
- Combines every revenue stream — products, advertising, subscriptions, affiliates — into one metric
- Tracks growth trends and the overall health of your business
📈 Formula for Total Sales
Total Sales = Sum of All Revenue Streams
8. Add to Cart Rate
The add to cart rate is the percentage of store visitors who add at least one item to their cart. This is, of course, a great indication of buyer intent, as well as how interesting your products are to consumers.
💡 Why Add to Cart Rate Matters
- It reflects your shopper experience, including store navigation, organization, listings, and photos
- Increasing add to cart rate gives you a larger pool of shoppers to convert to sales
📈 Formula for Add to Cart Rate
Add to Cart Rate = Unique Visitors with Items in Cart / Unique Store Visitors
9. Cart Abandonment Rate
Shopping cart abandonment rate tells you the number of visitors who start an order, but don’t complete it. It captures any user who puts an item into their cart, but doesn’t purchase it. This is one of your greatest opportunities to optimize and convert more sales.
💡 Why Cart Abandonment Rate Matters
- Can point to friction during checkout, like expensive estimated shipping costs or a confusing process
- Reducing CAR reduces the risk of lost sales
📈 Formula for Cart Abandonment Rate
Cart Abandonment Rate = (Transactions Completed – Carts with Items) / Transactions Completed
10. Checkout Abandonment Rate
This metric is similar to cart abandonment rate, but comes further down in the customer journey. It only captures users who actually start the checkout process by entering information.
💡 Why Checkout Abandonment Rate Matters
- Helps you optimize your conversion rate by revealing where and why shoppers fall out of the checkout process
- Abandoned checkouts are your “closest to the finish line” potential sales
📈 Formula for Checkout Abandonment Rate
Checkout Abandonment Rate = (Checkouts Completed – Checkouts Started) / Checkouts Completed
11. Cost of Goods Sold (COGS)
COGS reflects the direct expenses associated with buying or making a product. It’s the cost of everything in order to get a product ready to sell. It may include fixed costs like overhead and storage, but does not include shipping to customers, management salaries, sales, and marketing costs. You may also see it expressed as an overall percentage as well.
💡 Why COGS Matters
- Reveals your profit margin per product
- Minimizing COGS as a percentage of revenue improves overall profitability
📈 Formula for COGS
COGS = Costs to Acquire or Manufacture Products
12. Gross Profit Margin (GPM)
Gross profit margin tells you how much money you have left after accounting for COGS. It offers a high-level checkup on your e-commerce store’s financial health.
💡 Why GPM Matters
- Tells you whether a product’s sales cover its costs
- An unstable GPM can signal inconsistent products or poor inventory planning
- Healthy gross profits can help you secure e-commerce funding
📈 Formula for GPM
Gross Profit Margin = (Revenue – COGS) / Revenue
13. Net Profit Margin (NPM)
NPM shows how much revenue you have left after accounting for COGS plus other expenses, such as operating expenses, taxes, interest, and one-time payments.
💡 Why NPM Matters
- In-depth look at your business’s overall profitability
- Tracking NPM over time shows your operational growth and efficiency
- Investors and e-commerce lenders will likely be interested in NPM
📈 Formula for NPM
Net Profit Margin = (Revenue – COGS – Operating and Other Expenses – Taxes – Interest) / Revenue
14. Average Order Value
AOV tells you the average amount customers spend per order in your store.
💡 Why AOV Matters
- Uncovers buying patterns, e.g. whether people are buying high-priced items
- Helps measure the effectiveness of marketing and pricing strategies
- Points to potential opportunities for upselling
📈 Formula for AOV
AOV = Revenue / Number of Orders
15. Revenue Per Visit (RPV)
RPV reflects the average revenue generated from each visit to your store. It’s essentially a function of your AOV and conversion rate.
💡 Why RPV Matters
- See how effectively your store converts website traffic into sales
- Helps predict how traffic-driving campaigns and tactics will impact your bottom line
📈 Formula for RPV
RPV = Total Revenue / Number of Visits
RPV can also be calculated by multiplying your AOV by your conversion rate.
16. Average Inventory Level
Stock levels tell you how much inventory you’ve got on hand. More complex models also reflect how much inventory is inbound at various stages of the supply chain.
💡 Why Inventory Level Matters
- Stock levels help you identify seasonality and other buying trends
- Reveals which products are top sellers vs. slow movers
- Helps optimize stock levels and reduce cash flow issues due to excessive inventory
📈 Formula for Average Inventory
Average Inventory = (Beginning Stock + Ending Stock) / 2
While looking at your Average Inventory, you’ll also be interested in your Inventory-to-Sales Ratio. This formula conveys how much capital is invested in inventory compared to how much you make on the products’ sales. Your goal is to have a lower ratio (meaning efficient cash to inventory).
Inventory-to-Sales Ratio = Average Inventory / Net Sales
Top Customer Service KPIs for E-commerce
17. Customer Satisfaction (CSAT)
CSAT is a measure of how happy your customers are, and can include many different factors. It’s a high-level metric that incorporates a variety of customer experiences and interactions with your business.
💡 Why CSAT Matters
- Satisfied customers are more likely to be repeat customers
- They’re also more likely to provide referrals, reviews, and testimonials
📈 Formula for CSAT
A sophisticated customer survey tool will incorporate many factors and even open-ended comment analysis to aggregate a CSAT score for you. If you need a manual measure, here’s an easy shortcut:
CSAT = Number of five-star reviews / Total reviews
18. Net Promoter Score (NPS)
NPS is another metric that can include many factors, but it usually hinges on customers’ responses to the key question, “How likely are you to recommend us to friends and colleagues?”
💡 Why NPS Matters
- Simple yet effective way to keep a pulse on customer sentiment
- Helps you compare your performance to competitors and industry standards
📈 Formula for NPS
Customers answer your NPS question on a scale of 1 – 10. Those who respond with 9 or 10 are promoters. Those who respond with 6 or below are detractors.
NPS = % Promoters – % Detractors
19. Lifetime Value
LTV calculates the average lifetime net profit from a single customer over the entire relationship. Because many factors influence LTV, it’s important to reassess this metric every couple of years.
💡 Why LTV Matters
- Helps forecast how much profit you’ll make from marketing activities
- You can allocate funds to each audience segment according to their revenue generation
- In tandem with CAC, it’s a powerful gauge of your efficiency in terms of marketing, sales, and customer service
📈 Formula for CLV
Customer Lifetime Value = (Average Transactions per Month * AOV * Average Gross Margin * Average Customer Lifespan in Months) / Number of Customers in Period
20. Customer Retention Rate
Retention is the percentage of customers who return to make repeat purchases with your business. You can almost count this as a “brand loyalty rate”.
💡 Why Customer Retention Matters
- It’s usually cheaper to retain them than to acquire a new one
- Repeat customers present an opportunity to build a long-term customer relationship
📈 Formula for Retention Rate
Customer Retention Rate = (Customers at End of Period – New Customers) / Customers at Beginning of Period
21. Churn Rate
If you have subscribers or recurring sales, churn rate is a great KPI to measure how many customers have left your brand.
💡 Why Churn Rate Matters
- Key indicator of customer satisfaction
- Can help you recover lost customers and revenue
- You can double down on tactics associated with lower churn.
📈 Formula for Churn Rate
Churn Rate = (Customers at Beginning of Period – Customers at End of Period) / Customers at Beginning of Period
22. Return Rate
Your return rate shows how often customers send items back to your store after receiving them. You want a low return rate, of course, but it is also a learning opportunity.
💡 Why Return Rate Matters
- Reveals whether your products are hits or misses with customers
- Highlights issues with production, product descriptions, or photos
📈 Formula for Return Rate
Return Rate = Number of Returns / Total Fulfilled Orders
23. Customer Service Tickets
This is simply the volume of support requests submitted by customers via channels like email, chat, or marketplace messaging. If your business is growing, you can also measure the number of tickets as a percentage of completed orders (shown below) for a more accurate reflection of support needs.
💡 Why Ticket Volume Matters
- Indicates whether customers are having positive or negative user experiences
- Identifies service areas for improvement
- Helps you allocate staff and resources to customer support prior to introducing a new product or growth initiative
📈 Formula for Service Ticket Rate
Customer Service Ticket Rate = Number of Service Tickets / Total Completed Orders
24. Average Resolution Time (ART)
This KPI measures how long it takes, on average, to resolve each customer service ticket. This is an average metric. Some inquiries will be solved quickly whereas others might take longer. You’ll want to keep an eye on these long-term tickets as well.
💡 Why Resolution Time Matters
- Quickly resolving issues increases customer loyalty and satisfaction
- Measures the efficiency of your support staff and processes
📈 Formula for ART
Average Resolution Time = Total Time to Resolve Tickets / Number of Tickets
Pro Tips: How to Choose and Track E-commerce KPIs
This list is extensive. Different businesses will prioritize different KPIs. Chances are, you will track all of these metrics at different points in your brand’s journey. Don’t get overwhelmed trying to monitor (or fix) all of them at once.
Set SMART Goals
When it comes to choosing the most important KPIs for your business, the best place to start is by setting your goals and then working backwards to identify which metrics will help you track your progress toward those goals.
We recommend keeping your goals SMART:
- Specific
- Measurable
- Achievable
- Relevant
- Time Specific
Researching industry benchmarks for each KPI can help you set realistic and helpful goals.
Focus on Actionable Metrics
Resist the temptation of vanity metrics that make you feel good but don’t actually help you make decisions. If you’re making the effort to track a KPI, it should have a direct impact on how you run your business.
Streamline KPI Tracking with the Right Tools
You’ve already got your hands full with running your store. Put team members in charge of tracking the specific KPIs relevant to their work, and invest in e-commerce analytics tools that automatically track your most crucial metrics for you.
If metrics are applicable to the company, make sure they’re publicly available. Allowing everyone to keep an eye on key metrics will help keep them front-of-mind when planning future initiatives.
Refine KPIs When Needed
Over time, you might find that your original goals and KPIs evolve. For example, if a warehouse rebuild makes meeting a KPI impossible, you’ll need to adjust your targets and strategy so you can continue to move forward and grow.
Pave Your Path to a Data-Driven Future
As you scale your e-commerce brand, the right KPIs will prove crucial to your continued success.
For the right mix of metrics, don’t overdo it. Focus on the core growth levers for your business and choose the top three to five KPIs that truly reflect your performance in each of those areas.
Remember, time invested in setting clear goals and tracking them is never wasted — but your decisions are only as good as the data they’re based on.
