Track these 13 eCommerce metrics to ensure your D2C business takes the fast track to growth.

Updated: Aug 16

Constant evaluation pushes you to success. It helps you appraise your approach and processes, highlight the problem areas and identify what's working in your favor. It's true to everything you do. It is especially relevant to your D2C eCommerce business that generates tons of data to analyze and make data-driven decisions. Running a D2C eCommerce business requires you to make decisions that have a significant impact on your business. So, when you have millions of metrics to deal with, you must recognize the ones you need to track periodically.

Metrics that matter

It’s time to hone in on the ones that are worth your attention and time. We have listed down twelve of them for you to focus on first.

1. Website Traffic

The number of visitors coming to your website defines the Website Traffic of your eCommerce website. By increasing the website traffic, you can attempt to increase your sales conversion rate, as more visitors mean more chances to convert.

To amp up your website traffic, you should:

2. Revenue Per Visitor (RPV)

Revenue Per Visit is one of the key financial performance metrics of your eCommerce site. It calculates the money your website makes every time a customer enters your eCommerce store.

You can arrive at this metric using the following formula: Revenue Per Visitor = Revenue/Visitors (during a specific)

3. Sales Conversion Rate:

As the term suggests, it is the rate at which your visitors convert into buyers. You can calculate the same by using the formula below:

e.g., During the past week, if you have had 5000 visitors to your eCommerce store, with 100 of them making a purchase, your conversion rate of the week is 2%.

Your website conversion rate is the most critical metric. It helps you determine the number of visitors you need to bring to your website to achieve your sales target. You can further sharpen this information by:

  • Setting conversion rate by channel (AdWords, SEO, Facebook, etc.)

  • Setting conversion rate by category of products (as categories have varying conversion rates)

  • Setting conversion rate by campaign (to measure its success)

  • Aiming to optimize your sales conversion rates in your campaigns

This metric will pick out the categories doing well so you can put more effort behind them or stop a campaign that is not getting results.

4. Customer Acquisition Cost

A customer spends money to purchase what you are selling. But before that, you invest in acquiring those customers. The cost of getting a new customer is your Customer Acquisition Cost.

To make your business profitable, this figure has to be less than the Customer Lifetime Value and the Average Order Value.

Average customer acquisition cost by industry:

  • Travel: $7

  • Retail: $10

  • Consumer Goods: $22

  • Manufacturing: $83

  • Transportation: $98

  • Marketing Agency: $141

  • Financial: $175

  • Technology (Hardware): $182

  • Real Estate: $213

  • Banking/Insurance: $303

  • Telecom: $315

  • Technology (Software): $395

5. Average Order Value

This metric gives you the average value of each purchase. To determine the figure for your business, you have to divide all of the sales' total value by the numbers of carts.

Once you are aware of this figure, you can think of ways to grow the value. You can try some of these methods:

  • Offer bundled products at a slight discount

  • Upsell to your existing customers

  • Suggest products that complement their previous purchases

  • Giveaway deals for purchases worth a little over your Average Order Value (e.g., If your AOV is Rs. 1500, give a trial pack to customers spending over Rs. 2000.)

6. Shopping Cart Abandonment Rate

Shopping Cart Abandonment Rate tells you the number of people who add items to their cart but leave your website without buying anything. The reason could either be that they are not yet sure about buying and are still contemplating, or they bumped into a hurdle that put them off.

Once you are aware of this number, you can strategize to bring it down by: a. simplifying your checkout process b. remarketing to them with better deals c. send emailers to prompt them to revisit and complete the process

Shopping Cart Abandonment Rate Stats

  • The global average shopping cart abandonment rate is 69.57%.

  • Being compelled to create an account is the second most common reason people abandon.

  • Optimizing the checkout process can increase conversions by 35.62%.

7. Checkout Abandonment

Here is another significant metric, Checkout Abandonment. It measures the number of people leaving your website right after they begin the checkout process. If you see this as a problem, you can address it with persistent pages, urgency messaging, saving customers' carts, etc.

8. ROI and ROAS

ROI measures the return on investment from the amount you spend on marketing and advertising your eCommerce website. There is a simple formula to calculate ROI:

ROI = (Attributable Sales Growth – Marketing Cost) / Marketing Cost

Return on Ad Spend (ROAS) measures the amount of gross revenue your business earns for each penny spent on digital advertising, such as Google Ads. ROAS can be calculated using the following formula: ROAS = Gross Revenue / Advertising Expenses e.g. If you spend Rs. 3000 on Google Ads and generate Rs. 30000 in revenue. In this case, your ROAS ratio is 10:1. It means that for every rupee you spend on ads, you earn Rs. 10.

Repeat Customer Rate

This metric, the percentage of your customers who have made multiple purchases, reveals that your product/service has the potential to retain customers. They are satisfied with it and trust you enough to purchase again. It is also referred to as Customer Retention Rate.

Customer Retention Stats

  • Increasing retention by just 5% can lead to doubling the profits.

  • Acquiring a new customer costs five times more than retaining an existing customer.

  • Loyal clients spend 33% more than new clients.

Quick fact: A customer is four times more likely to switch to a competitor if the problem they’re having is service-based.

10. Customer Lifetime Value (CLV)

The total amount your business earns from your customers over the length of their relationship with you, as measured by AOV, repeat transactions, and retention period. Equipped with this information, you can focus on these VIP customers by sending them an exclusive offer or put your efforts towards acquiring people with similar profiles.

Average Annual Customer Profit X Average duration of customer retention = CLV

11. eCommerce Churn Rate

While you work hard to track new customers, it is equally essential to record the customers you lose over a given period. This metric that traces this turnover of customers is critical to work on strategies to charm them and retain them. Remember, it is easier to resell to an existing customer than to win a new one.

12. Email Opt-in Rate

Even today, email delivers the highest ROI of all marketing channels, especially for eCommerce. It serves you to remarket and generate repeat purchases. Email being so critical, you ought to know if you are doing it well. Email Opt-in Rate signifies the number of email subscribers who received your email, opened it, and clicked to visit your website. Well-designed emails with engaging subject lines and strong calls-to-action, you can up your Email Opt-in Rate, aka Email Click-through Rate, to see a positive impact on your business. Email Opt-in rate - Industry Standards

13. Refund and Return Rate

The Refund and Return Rate is calculated as the percentage of the total transactions that were refunded during a period. e.g., In a week, you receive 100 orders. During the same period, you have 4 refunds (not related to the above orders). Thus the Refund Rate = 4/100 = 4%.

If you run a D2C eCommerce website, it is worth paying keen attention to the metrics mentioned above. Forget not to evaluate the metrics against their statistical significance.