7 Ecommerce KPIs to Track Your Business Growth

A key performance indicator (KPI) is a measurement of your performance in a specific focus area that helps you understand the health of your business. An example of a common KPI is the number of sales you make per month. KPIs help guide your business growth and can always be adjusted based on your online store’s performance. 

Many different metrics can provide insight into the health of your business, but the most important ecommerce metrics for you to monitor will depend on your goals. These seven important metrics give strong overall signals of your store’s performance:

1. Sales over a set period

2. Web traffic sources

3. Revenue and sales by product

4. Conversion rate

5. Shopping cart abandonment rate

6. Average order value 

7. Number of new and repeat customers

If you already sell products on your Squarespace website, you can view these and other ecommerce metrics in your Analytics dashboard.

1. Sales over a set period

Tracking your total number of sales is a must both for tracking your growth and staying on top of your inventory. At a minimum, it’s helpful to track sales monthly. You may find it helpful to track weekly sales if you’re selling at a high volume or you need longer lead times to keep products in stock.

When you have a clear understanding of how much you sell over a set period of time, you can feel more confident buying supplies in bulk, investing time in developing your next digital download or online course, or hiring production help.

Every few months, take a look at your sales over the last three, six, or 12 months to see if you notice any useful trends. For example, if you notice more sales during certain seasons, you could increase your marketing of certain products during those times. 

Squarespace users can visit the Sales by Product panel for a clear picture of current sales.

Read our guide to managing your store’s inventory

2. Traffic sources

Learn which sources, like organic search or social media, drive the most traffic to your website. Focus on qualified site traffic—people who land on your website and stick around to browse. You can figure this out by comparing the clickthrough rate from a specific source to the bounce rate for the same source. 

When you understand how your audience is finding your ecommerce store, you can build a strategic marketing plan to increase the number of visitors you get. 

You can choose to promote your business on channels that are already performing well or invest in finding and engaging your audience on underperforming channels. Some simple steps can go a long way toward attracting more website visitors.

1. Connect your social accounts to your website so you can automatically share content posted on your ecommerce site and vice versa.

2. Use your social media channels to help new customers discover you and share store news with your current customers.

3. Add a Newsletter Block to your website so interested site visitors can sign up for your newsletter or email updates.

4. Once you’ve built out your mailing list, use Email Campaigns to promote your products, run sales, or tease upcoming releases. 

5. Optimize your website copy for SEO by including common search terms for your products in product pages and descriptions.

3. Revenue and sales by product

While total revenue is important, more detailed revenue and units sold metrics show you which products in your online store are already selling and which are less popular. Use this information to decide where you want to focus your marketing strategy. 

For example, you can promote products that are already popular to drive more sales or run a discount on less popular items to move inventory. If you run a paid marketing campaign, create trackable links so you can measure your return on investment.

These metrics can also help you find opportunities to adjust your business plan. You could take a product that’s selling less and try a few experiments:

1. Update the product description and marketing to better match a product that’s selling well.

2. Promote a limited-time sale on the product.

3. Try cross-selling or upselling the product by showing it as a related product on listings for similar items that are selling well.

Compare the total number of sales you get from each of these methods. The most popular method may give you some idea of whether it was the product itself holding customers back or it was something else, like price, lack of awareness, or marketing.

Read our guide to managing small business finances

4. Conversion rate

Conversion rate is a measure of whether a site visitor takes actions like making a purchase or signing up for a mailing list. For online business owners, it can help you understand which products convert visitors into customers. 

Start by checking out the current number of customers you convert on your website. That will help you set a baseline and future benchmarks to strive toward. From there, you can set goals to increase conversion rates for your ecommerce website and make user experience updates to support those goals. 

Decide which updates to make by looking at the path your visitors take once they land on your site. If you see a high number of customers dropping off between your homepage and your store’s landing page, you may need to make your site navigation clearer. If you notice a high bounce rate after customers visit specific products in your online store, consider improving the item details and images on those product pages.

Squarespace users can use the Purchase Funnel tool to understand customers’ paths to purchase and view conversion rates for individual products in the Sales by Product panel. If you connected other selling channels or use Point of Sale, you’ll see those channels too. 

Learn more about turning site visitors into paying customers

5. Shopping cart abandonment rate

Shopping cart abandonment falls under the umbrella of conversion rate metrics, but it’s one of the more important KPIs to track. If a potential customer goes through the process of shopping your store, choosing products, and getting to checkout only to abandon their cart, that person is part of your target audience. It’s worth looking into the abandoned cart data to see if there are specific reasons people are exiting at that point.

According to research by Baymard Institute, common reasons people abandon their shopping carts include:

• Shipping fees or other extra costs

• Account required to check out

• Shipping times

• Complicated checkout processes

You can combat these concerns in a few ways:

• Lower your shipping costs or fold them into the total cost of an item so customers aren’t surprised by the increase at checkout.

• Make your shipping speeds clear and offer an option for expedited shipping.

• Simplify the checkout process by adding buy now, pay later options or one-click checkout options so customers can skip some of the manual checkout steps.

• Send an automated cart recovery email that comes with a coupon.

See our example abandoned cart emails

6. Average order value (AOV)

Your online store’s average order value is the average revenue earned per order. It’s calculated by dividing revenue by the number of orders (Revenue / Orders).

Higher AOV not only shows the average amount of money you’re bringing in per order but proves that customers are interested in more than one product in your store. Consider adding products to your store at varied price points to increase the average order value. 

You can combine this strategy with a discount offer to encourage customers to add additional items to their cart. For example, offer free shipping for orders over a certain amount. This is also another opportunity to cross-sell related products to encourage customers to continue browsing your store.

Learn more about why average order value matters

7. Number of new and repeat customers

Bringing in new customers is a priority for every business, but customer retention is how you build a business that lasts. On top of tracking the number of brand new customers you bring in over a specific time period, track returning customers and which products get repeat purchases. 

Increasing the number of repeat customers you get is a strong signal for growing customer loyalty for your business. If you’re not currently seeing return customers, think about ways you can engage with your community and give them reasons to come back.

Depending on your products and business, that might mean improving the customer experience on your site, interacting with customers on social media, or running regular promotions and releasing new products.

How to choose your ecommerce KPIs

The most important KPIs for your business will be unique to your products and stage of growth. To set your KPIs:

1. Set your business goals. What are your main goals for the quarter or year?

2. Review the KPIs listed above. Does each one apply to your business and goals? 

3. Decide if there are other things you want to measure. For example, someone selling a service might want to measure customer satisfaction. If you’re focused on scaling up, you might be focused on profit margins.

4. Get an understanding of your current performance. This sets the baseline for comparison going forward.

5. Set performance goals for the future. Working from your baseline, decide what you’d like to see change, in what amount of time, and how you plan to support those changes.

If your primary goal is to increase traffic to your website, focus KPIs on traffic sources and develop existing marketing channels. If your goal is to generate more revenue, you might start by reviewing top-selling items in your store, then determine a revenue goal based on metrics like AOV.

When you set your KPIs, balance achievable metrics with stretch goals that will help you prioritize your time and energy. Not quite ready to set KPIs? Learn more about how to measure your website traffic and performance.

This post was updated on June 7, 2023.