Selling and advertising products online is never been as easy as it is today.
Whilst we all love the convenience of setting up an e-commerce business rather quickly, it can sometimes be a double-edged sword. This is because, thanks to the popularization of online marketplaces, the competition nowadays has become fierce.
Standing out in a sea of sellers can be challenging. Luckily, though, data and analytics can help you stay relevant.
In this article, we’ll discuss six of the most important sales metrics to keep track of and leverage for your success.
1. What Is your Revenue and Number of Orders?
The first approach to tracking your e-commerce business’s performance is to see what is currently selling. Gaining insight into your customers’ purchasing habits can help you identify those elements of your strategy that are paying off and which ones could do with an improvement.
Along with keeping track of your company’s overall revenue and the number of orders over a period of time (days, weeks, months, years), you can also benefit from calculating your Average Order Value (AOV).
Simply put, AOV consists of the average profit derived from a single order. Naturally, different items listed on your e-commerce platform will come with different price tags. To get this number, you simply divide the total revenue by the number of items sold.
2. Which Days and Hours Have the Most Revenue?
You can further improve your business strategy by tracking what moments of the day are driving the most profit. Recent data points out that the average consumer will make most of their online purchases on Mondays and Thursdays, with the highest traffic recorded between 8 and 9 pm. Friday nights and weekends are usually quieter as people tend to enjoy their family time and leisure activities away from screens.
While these rules apply to e-commerce in general, your market niche might work on a slightly different timeline. For this reason, it is important to see what times and days are most popular among your target audience. Knowing when your platform reaches peak traffic can help you oganize and leverage resources according to your company’s specific needs. For example, you want to make sure customer support is readily available at those times when you are likely to experience high volumes of queries.
3. Which Payment Methods Are the Most Popular?
We live in an era of infinite payment options. Depending on both location and personal circumstances, people will often have a favorite method. With the abundance of e-commerce platforms and sellers all around, it is all too easy to miss out on a sale just because you weren’t offering the desired form of payment. Forced to abort mission at checkout, your customers or prospects might even think twice before trying a new purchase in the future.
What payment methods are best for you will come down to variables such as what countries your e-commerce ships to and the shopping habit of your target audience. Regardless, tracking the most successful payment option will give you a clear indication of what is working and what is no longer serving your business.
4. Which Shipping Methods Are the Most Popular?
Shipping can easily be considered the backbone of e-commerce. As well as having a huge impact on customer satisfaction, choosing the right shipment carrier can make or break your shopping cart abandonment rate, delivery times, and overall brand perception.
Keeping track of your target audience’s preferences in regard to product delivery will give you the necessary data to make important decisions and adjust your resources and logistics accordingly.
5. What Is your Average Basket Value?
By average basket value, we refer to the number of items purchased by your average customer.
There are several ways this data can help your e-commerce thrive. We have listed three for your convenience:
- It provides you with key information on sales trends: since basket size can vary depending on whether customers are buying a high number of items or simply more expensive items, basket value helps paint a picture of what influences your store’s performance.
- It familiarizes you with your customer base and its needs: really understanding who is drawn to your product or service is paramount to the success of your e-commerce endeavors. Paired with other analytics (age group, background, etc.), measuring your average basket value can shed a light on what drives your prospects toward a specific product.
- It helps you manage logistics and inventory more efficiently: your business’s average basket value gives you information that can help you manage inventory better. Not knowing what items are being sold regularly will affect your ability to restock in a timely fashion – potentially resulting in missed opportunities down the line. Keeping in the loop of what items sell quick will help you never run out or cause shipping delays.
6. Where Are you Best Customers Located?
When we talk about running an online business, it is tempting to assume you shouldn’t care about physical locations. However, this is not always the case. For e-commerce specifically, the location of your customer base is often even more important than your own business.
If a considerable segment of your target audience is linked to one geographical area, natural word of mouth is more likely to occur – potentially leading to referrals, client acquisition, and retention.
And not just that. Knowing where your prospects are browsing from can help you optimize shipment logistics and leverage them to maximize profit.
The Bottom Line: Why Sales Metrics Matter in E-commerce
As you have observed from the previous examples, making metrics-informed decisions can help your e-commerce thrive even in the most fiercely competitive environment.
Along with providing you with clues in regards to store performance, number of sales, and item value, metrics have a direct impact on the logistic and managerial sides of your business.
Since blindly chasing metrics can at times be overwhelming, it is important to get crystal clear on what data is relevant, actionable, and beneficial to your end goal. You want to refrain from collecting poorly organized or hard-to-read data that can get in the way of how effectively you run your store.
Lucky for you, tools such as Razzo can help you make the best out of your small to medium-sized Magento shop.
Razzo is specifically designed to pull relevant data out of your e-commerce platform and show it to you in an easy and digestible way. It works by connecting it to the Magento 2 REST API and, within minutes, it collects your pre-selected metrics and converts them into user-friendly charts and graphics.
Whether you are just starting off or are an experienced Magento seller, Razzo helps you tune into your e-commerce business’s strengths and areas of improvement, allowing you to make you informed decision on what’s best for your store – in turn positively affecting your ROI.