How to Choose the Right E-commerce KPI Metrics for Your Business

As an e-commerce business, it’s worth tracking KPIs to check that your website is operating effectively and generating sales. However, with so many different metrics to choose from, it can be difficult to know which ones are the most insightful.

In this blog post, we’ll break down some of the most essential e-commerce KPIs and explain how you can use them to improve your business. Read on to learn what e-commerce KPIs are and how to start tracking them effectively.

What are e-commerce KPIs?

Keeping a close eye on key performance indicators (KPIs) is crucial for businesses as it allows them to determine the health of their e-commerce operations to maximize and optimize efficiency and revenue.

These metrics measure various aspects of online shopping activities and performance, providing precious insights into how customers interact with a business’s e-commerce platform.

Why is it important to track e-commerce KPIs?

The information inferred from following online retail metrics can uncover possible problems that might be preventing a business from realizing its potential. With this data, companies can pinpoint opportunities for improvement and make more informed choices regarding their investments in e-commerce strategies.

Monitoring e-commerce KPIs also provides your business with insights into the current state of the online shopping landscape. These metrics measure performance, clarify customer profiles, track their spending habits, and determine consumer behavior trends.

Furthermore, e-commerce KPIs inform decision-making regarding marketing campaigns, website design and analytics, customer segmentation, and lead generation initiatives. Tracking the right e-commerce KPIs lets you quickly adjust marketing techniques while prioritizing tasks to maximize ROI (return on investment). A great example of this is SEO, where ROi is huge. Learn more about this here.

Without monitoring these metrics, a business runs the risk of drawing conclusions based on guesswork or intuition. E-commerce KPIs, on the other hand, provide accurate information that can be used to make smarter decisions and optimize operations.

Which E-commerce KPIs should you track?

The most important e-commerce KPIs to track include customer acquisition cost, customer lifetime value, website traffic, page views, cart abandonment rate, average order value, conversion rate, and total e-commerce sales/revenue.

  • Customer Acquisition Cost (CAC) is the amount of money spent to acquire a new customer, and is calculated by dividing total expenses (such as marketing and advertising) by the number of customers acquired over a certain time period.
  • Customer Lifetime Value (CLV) is the measure of how much value each customer has over their lifetime with your business. Customer lifetime value is a metric is often used to prioritize marketing budgets and set realistic customer acquisition goals.
  • Website traffic is the number of people visiting your website. The higher the number of visitors, the more successful your website is. It’s also a good idea to track what channel your traffic is coming from. This will allow you to answer questions like ‘Is my audience scanning a QR code to get to my website, or are they clicking on a Facebook ad?’
  • Page views measures how many pages the average visitor views when they visit your website, giving you insights into how engaged visitors are with the content on your site.
  • Cart abandonment rate is the percentage of visitors who add items to their cart but don’t complete their purchase. Tracking this metric can identify potential issues with your checkout process and uncover areas for improvement.
  • Average order value (AOV) is the mean amount of money each customer spends per purchase, revealing information about customer buying habits.
  • Conversion rate tracks the number of visitors who complete a desired action, such as making a purchase. This can be used to evaluate the effectiveness of campaigns and website design.
  • Total e-commerce sales/revenue is the sum of all money generated from e-commerce activities including subscriptions. This is a good way to measure the success of your efforts and provides valuable insights into how your business is performing.

Tips for setting up an effective e-commerce KPI tracking system

Online retail businesses need to have an efficient way of tracking metrics to continuously check that their operations are running smoothly. In order to create an effective e-commerce KPI tracking system, there are a few tips you should be aware of.

1. Define your e-commerce KPIs 

Wether you are selling escape rooms in SF or designer shoes in LA, dentify the metrics that are most informative for your e-commerce business with clear objectives in mind. These KPIs should align with specific goals and enable you to track the progress of your business operations.

2. Pick the right platform for tracking 

Choose appropriate software to track your e-commerce KPIs and confirm that it’s easy to use by trying it out before committing to a purchase or subscription. This will mean that everyone in the organization can access and review the KPIs regularly, allowing you to make better business decisions while you sell online.

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Choose appropriate software, such as Google Analytics, to track your e-commerce KPIs and confirm that it’s easy to use by trying it out before committing to a purchase or subscription. This will mean that everyone in the organization, including your Shopify website development company, can access and review the KPIs regularly, allowing you to make better business decisions while you sell online.

3. Understand your customer’s buying journey 

Analyzing customer data is key to understanding the buying journey of your customers and making informed decisions about your sales presentations. Such information will provide key details about what motivates them to purchase and how to improve your e-commerce website for higher conversions. At BrushGalaxy, for instance, customers are  often pampered with the most amazing free brushes first and then led to premium brushes as they complete the buyer’s journey. Someone who starts with free brushes will eventually feel the need for premium art brushes.

4. Track KPIs over time 

It’s crucial to keep monitoring metrics to verify that your e-commerce business is on track and performing as expected. Doing so enables you to collect a sufficient amount of data over a sufficiently long period to be able to draw meaningful conclusions. For example, if you have been sharing updates about your e-commerce business on Facebook and you wish to monitor their performance, you can employ a Facebook insights tool to track relevant metrics.

5. Establish an evaluation process 

Set up a system to review data over time so that you can measure whether or not your e-commerce goals are being met. This will identify areas for improvement and make necessary changes in order to drive increase lead conversions and improve your bottom line.

6. Take appropriate action

It’s vital to actually act upon the insights derived from your e-commerce KPI tracking system otherwise all of that tracking will have been in vain. Once identified, take appropriate steps to address any areas of concern so that your business can continue to run smoothly and reach its full potential.


E-commerce KPIs are important for businesses to track because they can provide valuable insights into how well the business is performing. Monitoring the right KPIs allows businesses to improve their bottom lines and make more informed decisions about where to invest their resources.

There are a variety of e-commerce KPIs that businesses can track, but some of the most common ones include conversion rate, average order value, and customer lifetime value. Successful businesses use metrics to improve their operations and make data-driven decisions that aid growth.

To set up an effective KPI tracking system, businesses should start by identifying which KPIs are key for their specific goals, setting realistic targets for each KPI, and putting in place systems and processes to collect and track accurate data on a continual basis.

If you’re not already doing this, there’s no time to waste – start tracking your e-commerce KPIs today and reap the benefits of collecting vast amounts of precious data.