Here Are 8 Essential Metrics for Your E-commerce Business

Written by
Zachary Pestana
Last Modified on
December 19, 2023

If you’ve stumbled across this article, chances are you own an e-commerce company and want to know how to take your business to the next level. One of the most important steps to getting there is learning to stay on top of your metrics.

From product discovery, conversion, to retention metrics, there are dozens of different ways to measure the success of your company and monitor how it is being received by customers. But how do we choose which ones to prioritise and implement amongst the dozens that are out there?

We’ve gathered the top 8 essential metrics that every e-commerce business owner should know in order to achieve scalable and fast growth for your business.

What are e-commerce metrics?

E-commerce metrics are quantifiable measurements that assess your website performance consistently. These essential tools can be the difference between what makes a good e-commerce website and a great one.

While there is a long list of e-commerce metrics available, the key is to only focus on the ones that are relevant to you and what will create the most impact for your brand. It’s one thing to know how to set up an e-commerce website, but running a profitable one is another story.

What is the difference between Key Performance Indicators (KPIs) and metrics?

Many people think KPI and metrics are interchangeable. While they are both quantifiable measurements, they are still two very different things.

KPIs are measurable values that keep track of whether you’ve hit certain business goals and objectives. On the other hand, metrics measures how successful your progress has been in achieving those goals.

To put it simply, metrics measure the progress while KPIs measure the performance of that progress.

The 8 essential metrics to grow your e-commerce business


1. Website Traffic

No one in the right mind would want to be stuck in traffic at any time of day. But for any online business, that’s exactly what you want—traffic. Website traffic refers to the number of visits a website receives from web users. This can be measured in “visits” or “sessions” and is indicative of how long a user spends on your site.

Tracking website traffic can give you access to insights on your consumer’s behaviours and even reveal certain areas of improvement that you need to work on as well such as increasing brand visibility. Eventually, this will allow you to generate qualified leads and turn them into potential customers.

Some ways you can increase your website traffic significantly include:

  • Promoting your business through social media channels
  • Grow the number of subscribers to your newsletter
  • Optimising your website for search engines
  • Tapping into paid traffic sources such as YouTube advertising, Google ads, website banners, and other pay per click adverts

2. Email Marketing Metrics

Besides social media, email marketing is another great way to market your brand and remains one of the most profitable channels for businesses.

Every e-commerce business owner should make use of these metrics to gain insight to user activity and stay on track of how their website is performing.

While it is similar to website traffic, tracking your email marketing metrics will give you quality leads and show you which of your customers care enough to open your newsletter, who are more likely to be paying customers in the end.

3. Sales Conversion Rate

This is probably one of the most important metrics in the lot. While it is self-explanatory,

conversion rate refers to the number of users who actually purchase from your site, as opposed to the overall number of visitors.

While your e-commerce website could be gaining a lot of traffic from visitors, it doesn’t necessarily equate to a sale at the end of the day. This is a crucial metric as it reflects the effectiveness of your sales team at converting new leads and can be used to predict the success or failure of your business.

To avoid going on the wrong track, boost your conversion rates by:

  • Enhancing your ads
  • Keep your social media audience engaged
  • Optimise your website landing page

4. Customer Retention Rate (CRR)

One of the most common mistakes that business owners make is neglecting existing customers in pursuit of new ones. As much gaining new customers is good for your revenue, retaining old ones are just as important.

Repeat customers truly are the lifeblood of e-commerce businesses as it is more economical than acquiring new ones.

This metric can be directly translated into customer satisfaction. So remember: the higher this number is, the better you are serving your customers.  

5. Customer Acquisition Cost (CAC)

Now, let’s move on to bringing in new customers. Many founders think that the customer acquisition cost (CAC) is only made up of the marketing spend. But did you know that this also includes all your sales efforts?

On top of money you are spending on ads and marketing materials, this also covers equipment, tools, and even the salaries of your employees.

CAC puts the amount of money you’ve spent on marketing purposes next to the number of customers you’ve acquired during that same time frame. If your CAC value is higher than expected, chances are you’re doing something wrong. It is important to track your CAC to know if you are indeed making a profit with every customer you acquire, or actually making a loss.

6. Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) measures how valuable a customer is for your company across the entirety of the relationship. Not only does this look at how valuable a customer is through one sale, but the entirety of the customer life cycle.

Yes, you may be getting good revenue from one customer, but this may not be enough to breakeven. Think of it this way: would you rather make a massive sale from one customer in the course of a month, or make consistent fewer sales from multiple customers in the same time frame? The latter, of course.

Measuring your CLV is about understanding how much customers will buy from your store and coming up with new ways to retain them over time.

7. Shopping Cart Abandonment Rate

Raise your hand if you’ve had customers add products into their cart who end up abandoning it even before making a purchase. Cart abandonment touches on exactly that. While this is more common than you think, you’d want to ensure that your customers actually make a purchase instead.

This is a major metric as it can point to bigger problems on your website that are hindering visitors from completing the purchase. This can range from complicated payment processes, unexpected shipping fees, and other logistical issues.

Keeping track of your shopping cart abandonment rate can allow you to work on areas that need to improve on your site.

8. Average Order Value (AOV)

Just as the name suggests, the Average Order Value (AOV)  highlights the average amount of money your customers spend in a single transaction. The more products or money a customer spends in one session, the better the average order value, which ultimately leads to more profit for your company.

Analysing your AOV metrics can reveal which products are bestsellers on your website as well.

Some effective ways to increase AOV include:

  • Offering mix-and-match offers
  • Selling smaller, add-on products
  • Introducing bonus schemes or loyalty programmes

The Importance of Implementing Metrics For Your Business


Metrics are essential in every e-commerce business as they are indicators of how well your business is doing and how customers are engaging with your brand.

With the results that you acquire from these metrics, it can help you improve the quality of your product or service, engage with your audience better, identify certain areas that no longer serve your company, and drive the overall strategy and direction of your business.

Make these e-commerce metrics a priority and watch your business soar to new heights!

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About the author
Zachary Pestana
is a seasoned writer in market trends and business thought leadership. With a writing history at Incorp Global, MOQdigital, and AIESEC Australia, Zachary leverages his broad range of experiences to stimulate industry conversations and engage audiences.
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