In a retail world driven by an unquenchable thirst for meaningful data to improve sales and ROI, there have been profound changes recently.

Online competition for shoppers and completed transactions has always been fierce, but the last 18 months or so have rewritten the rules. Now, it isn’t enough to have conventionally slick advertising and promotions. Deeper discounts on product won’t cut it either, mostly because competitive discounting wars quickly become zero-sum games for brands.

If you’re an e-commerce retailer, the growth in online markets means that your need for actionable data and sound analytics has never been greater. You need reliable measures to figure out if your strategy and tactics are working, and how you can improve in the most important areas of your business.

The challenge: to recraft your online business to account for consumer evolution and the demands for greater sustainability, richer CX (customer experience), greater transparency, and ongoing brand stories that engage users.

A shotgun approach to data collection and analysis simply won’t work. Marketplace evolution means that you can’t just take a “set ‘em and forget ‘em” approach when it comes choosing performance indicators. Now, it’s all about tracking the best, most relevant key performance indicators (KPIs) you can identify.

And the way you address them will reflect a mix of your long-term and shorter-term business goals for the second half of 2021, and beyond.

Identify your targets; choose meaningful measurements to track; establish solid, consistent data sources; and determine your tracking and reporting intervals for each KPI.

Key Performance Indicators (KPIs): Lodestones for Success

Your Key Performance Indicators, or KPIs, are metrics.

That is, they’re measurements of specific aspects of your business’s performance.

There are many measurable performance indicators, but part of your task – or your goal – is to identify those KPIs that are the most relevant to your e-commerce business right now, and for the foreseeable future.

The relevance of any given KPI depends on the extent to which you can use the data it provides to refine your strategy and tactics over time.

Metrics Galore: A Buffet of KPIs


Choose Your KPIs Wisely

Your choice of the KPIs you’ll use will depend on several factors.

You’ll need to create a baseline for comparison with the your chosen KPIs, and you’ll have to be very clear about your objectives. Otherwise, you’ll spend more energy and time acquiring less useful data, and some of your initiatives may end up depending on luck rather than sound analytics and good strategy.

You’ll probably have multiple objectives. Your choices may relate to brand recognition and trust, traffic growth, increased leads, better conversion rates, and more. Big Hint: the more clearly and objectively you phrase the objectives you’re trying to reach in picking your KPIs, the greater your chances of reaching them.

Then there’s the question of strategy: given your objectives, which digital channels and marketing tactics are most likely to help you reach them? It’s important to be clear about both your objectives and initial implementation strategies when you’re choosing your KPIs.

After all, your strategy and tactics will elicit responses from e-commerce customers, and you’ll want those responses to be in the form of measurable, relevant indicators.

And you’ll need to have come to some realistic ideas about the levels of anticipated growth you hope to see over time.

The Best KPIs According to…?

We took a look at the best KPI options currently recommended by the likes of Apruve, Search Engine Journal, ContactPigeon, MOJO, The Blueprint from Motley Fool, and other sources.

The result: consistent overlap, but with some interesting variations, including variations in the number of KPIs you ought to be measuring.

The message: it isn’t about how many KPIs you select. It’s about the most relevant for your business objectives.

The chances are good that the KPIs you’ll pick will fall into some generic categories, including aspects of sales and marketing, service and customer relations, operations and “functionality criteria,” and project development/implementation. You’ll likely be watching things like:

  • Conversions
  • Revenues
  • Relative success in achieving both broad and specific marketing goals
  • Success in reaching advertising objectives
  • Customer service success in terms of customer satisfaction, fulfilment, dispute resolution, and so forth
  • Unit and organizational efficiency, timely and cost-effective problem solving, strategic navigation

And more. There’s almost always more…

In fact, you really have to “pick your shots” carefully. Databox offers a list of 23 KPIs it thinks are crucial for tracking and growing your success; Cloudways’ list includes 45 KPIs and other metrics it believes you can use to grow your business this year.


So Give Already – What Are the Hot Ones?

We’ve prepared a little list of our own for you.

We offer it with a caveat: you MUST be vigilant on an ongoing basis, and it’s important that you stay responsive to the data your key indicators provide.

If some of your KPIs aren’t giving you the data you need in order to make decisions about critical components of your business, you should be prepared to alter or replace those KPIs on the fly.

1. Organic Revenue & Transactions

Let’s begin with the obvious.

Organic revenues (or organic sales) are the revenues you generate through your existing core business, rather than from things like getting rid of a business line, or adding another unit to your existing business.

This KPI gives you a clear picture of month-to-month revenue growth from your core business. It’s always relevant, especially at a time when changes in consumer sensibilities, logistics, and supply chains are impacting every aspect of your retail activity.

In adopting this KPI, you may also want to consider measuring revenues from assisted organic conversions.

This term refers to what we might call “indirect” conversions – for example, those that happen when a user clicks an ad somewhere that leads ultimately to your site and to the desired customer behavior.

If you want to use assisted organic conversions as one of your KPIs, you can do it through Google Analytics.

2. Customer Acquisition Cost & Lifetime Value

You could use these two KPIs separately, but they’re often paired, and for good reason.

Customer Acquisition Cost (CAC) is your cost to land a new customer successfully. It includes the resources and funds your business expends to get the job done.

Obviously, you want the value of that customer and his or her transactions over time to far exceed the related CAC, and that’s why it’s important to measure Customer Lifetime Value (CLV).

You might think of CLV as a direct reflection of the strength of your customers’ brand loyalty and willingness to engage in transactions that maintain or increase their ongoing value to your business. It reflects your attention to customer interactions in all their forms.

3. Conversion Rate

Your conversion rate is, at its simplest, a percentage based on the ratio of number of sales to number of visitors. For instance, if you had 1500 visitors last month and 65 of them completed a sales transaction on your site, your conversion rate would be an astonishingly good 4.3%.

“Thank you, Captain Obvious.”

You’re welcome. But there’s a little more to it, especially as you may want to consider conversion rates by channel and device type. Also, you might be interested in conversions that involve other types of shopper action.

For example, you might want to know what percentage of visitors out of a monthly total subscribed to a newsletter or became account holders, especially as the result of tactics designed to drive those behaviors specifically. You can see how a conversion rate based on a specific newsletter subscription strategy would be useful in fine-tuning the strategy for better results.

4. Monthly Marketing KPIs

You might think of this has a subgroup of KPIs you can employ collectively to measure the success of key aspects of your marketing efforts. It could include KPIs for some or all of:

  • Monthly lead generation, especially relative to specific sources, with separate indicators for per-lead costs, conversion costs, and conversions
  • Measured organic search traffic, with added indicators for leads generated from that traffic, inbound links, and various other SEO-related KPIs
  • ROI as a profit percentage based on gains above all related marketing costs
  • Measured customer loyalty in the form of “net promoter score” (NPS)
  • Measures relating to the costs and relative success of paid advertising
  • Social media tracking for traffic, leads, conversions, audience growth, and engagement
  • Mobile site traffic and success measures

5. Monthly Sales KPIs

As with monthly marketing KPIs, you may have a cluster of sales-related indicators – monthly go-to measures that drive sales strategy. At the very least, you’ll be concerned about:

  • Profit margins, both gross and net. If you don’t get to keep enough of the money your sales are bringing after you’ve paid all your monthly costs, you can’t grow your business effectively. Obviously, you’ll also have to use monthly sales revenue as a KPI…
  • Whatever is going on in your sales funnel. That includes indicators for active qualified leads, conversions from those leads, and conversion time/cost, among other possibilities.
  • Your net sales, so that you can follow monthly average growth and change marketing strategy and tactics as necessary.

6. Cart Abandonment

Do you get depressed or angry when you think about shoppers loading items into their shopping carts and then walking away without completing a transaction?

Stop that.

Nobody likes losing sales, but the truth is that your cart abandonment rate can provide insights into a range of areas, from obvious elements like page layout and design to navigation problems, difficulties with payment tools, and issues with the cart itself.

Frustrated customers may leave a cart behind just because your site updates inventory too slowly and they discover you’re out of stock for a desired item only when they move to your checkout.

Not cool.

It’s easy to figure out your cart abandonment rate: it’s your monthly completed transactions divided by the number of shopping carts visitors actually create, X 100.

At the link above, Motley Fool offers some practical tips to help you make sense of your cart abandonment rate once you’ve calculated it. You should take a look…

7. Inventory Turnover

How many times can you sell out your inventory on hand over a year?

Given the relationship of this information to supply-chain issues (including post-pandemic logistics), the dangers of traditional discounting schemes, and the impact of over-supply and unpredictable markets on your brand, we think of inventory turnover as a critical KPI for any retail business.

You figure out your inventory turnover by subtracting the cost of your sales from your total sales, and then dividing by the amount of inventory you have left at the end of the year. Your inventory turnover reflects your success (or lack of it) in making sales and growing your revenue.

We could keep going, as we’re also very keen on KPIs like average order value, revenue per visitor, bounce rates and visitor time on site, and of course, net profit, but we’re pretty sure you get the point.

Ready, Aim…

At the most basic level, our advice and that of other sources in this area is simple: identify your targets; set your objectives; choose and implement the most relevant KPIs.

Then, USE the data they provide.

The success of your related analytics, regardless of which KPIs you choose, depends several things:

  • your ability to measure accurately the data for each indicator;
  • your ability to get real-time or very timely data for each KPI; and
  • your reliance on KPIs that enable strategic action in the context of your e-commerce business. Obviously, you can use the KPIs we’ve mentioned, but only if they’re relevant to your objectives. So many choices…


If you haven’t thought about your KPIs in quite a while (or at all), now is the time. You don’t have to leave everything to chance, so take control of those aspects of your business that are within your grasp.

And if you find you’re having issues with inventory turnover, cart abandonment, and conversion rates, get in touch. Our solutions may be just what you need.