E-Commerce Insights

Essential eCommerce KPIs for Online Business in 2022

KPIs are a vital part of any business strategy on the road to success. However, the significant influx of data from online purchases might make it challenging for eCommerce brands to identify which KPIs should be paid close attention to for better business performance. This article will provide the most essential eCommerce KPIs that are crucial for measuring the progress and success of any online business.

What are eCommerce KPIs?

KPIs, or Key Performance Indicators, are quantifiable measurements that help evaluate the overall progress of a business. Ecommerce KPIs refers to many data points relating to sales, marketing, operation, and strategic initiatives to gauge the successes and shortcomings of online business over a period of time. 

For instance, an eCommerce merchant might set a KPI of generating 2000 new customers by the end of this year. This is an example of a good key performance indicator as it mentions both the quantifiable target of new customers and the timeframe for the target to be completed. 

KPIs and metrics are sometimes used interchangeably as both of them are quantifiable values to measure business performance. However, bear in mind that metrics are simple data points to track business progress while KPIs relate to a specific business goal and reflect how successful the business is in achieving that goal. Therefore, a KPI is a metric, but not all metrics are KPIs.

Why eCommerce KPIs matter?

The ultimate goal of any eCommerce business is to deliver an excellent shopping experience, increase conversion rate and multiply revenues. Nevertheless, these goals might be challenging to achieve if online brands do not establish specific goals for different business aspects. Therefore, KPIs play an important part in the development of any eCommerce business: 

  • Increase online sales: Once eCommerce KPIs are set, it’s possible for store owners to track sales-related KPIs such as conversion rate or customer lifetime value. Analyzing these data can help store owners take proper action to influence visitors and customer behaviour to generate more sales leads. 
  • Gain data-driven insights: It’s apparent that data is indispensable to every decision you make as a business owner. Ecommerce KPIs reveal profound insights based on real-time data.
  • Adjust business strategy: Utilizing a combination of effective KPIs helps identify urgent problems to immediately tackle and recognize awaited opportunities to grasp. KPIs analysis is the base for business owners to make adjustments on business strategy.  
Data analysis

What makes an effective eCommerce KPI?

Each area of business requires its own set of desired KPIs that are suitable for business development strategy. This case is especially true when it comes to eCommerce business. There are some key factors to determine an effective KPI that provide useful and actionable insights into business performance:  

  • Relevant to business goals: Chosen KPIs must align with business goals. They should directly impact the bottom line and support overall business strategy as well.
  • Measurable: Effective KPIs should be quantifiable and easily calculated, rather than focus on generalised questions.
  • Attainable: An effective KPI must be possible to achieve in the given timeframe. Also, eCommerce merchants should focus on the consistency of the selected KPIs in a particular stage of business growth. 

Types of eCommerce KPIs

There are many KPIs that vary depending on diverse business operations. Ecommerce KPIs are normally divided into five main categories:

  • Sales
  • Marketing
  • Customer service
  • Project management
  • Manufacturing

Essential eCommerce KPIs for online business

Though the number of eCommerce KPIs is almost infinite, there are some essential key performance indicators that online stores should carefully consider to measure business performance:

Ecommerce KPIs for sales

1. Conversion rate

Conversion rate is a term familiar to any online business owner. Simply put, conversion rate is the percentage of customers that buy things at your online stores. Conversion rate helps store owners identify which channels are most suitable for promoting certain products and determine the effectiveness of different campaigns for better strategic decisions in the future.

Conversion rate =  (the number of purchased customers/the total number of visitors) x 100% 

For example, if your site received 50000 visitors and 5000 orders last month, the conversion rate is (5000/50000)x100% = 10%.

2. Shopping cart abandonment

Shopping cart abandonment is the percentage of orders that customers had added to the shopping cart but failed to complete their purchase for whatever reasons. Shopping cart abandonment rate can reveal why customers decided not to continue purchasing your products, so you can make adjustments at your stores for a better conversion rate next time.

Shopping cart abandonment rate = (abandoned transactions/the number of shopping carts created) x100%

For example, if your store had 300 shopping carts created but only 40 purchases, the shopping cart abandonment rate is (260/300)x100% = 86.67%

3. Customer lifetime value

Customer lifetime value gives eCommerce brands the average profit by customers. This is the amount of revenue gained from a customer after subtracting the cost of acquisition and servicing. This can be analyzed to develop strategies that not only attract new users but retain existing ones to spend more as well. 

For example, if a typical shopper visit once per month and spend $50 per time for an average lifetime of 3 years, the customer lifetime value is $50 x 12 months x 3 years = $1800

Ecommerce KPIs for marketing

4. Site traffic

Website traffic refers to the overall number of visitors to your online store. This KPI is the backbone of any eCommerce business because it reflects all marketing efforts over a certain period of time. 

5. Traffic source

No matter what marketing strategies your online store is using, it’s always essential to know where the traffic comes from including both organic and paid search, such as from campaigns, social media, other sites and so on. 

6. Bounce rate

Bounce rate is the percentage of users who leave after browsing only one page. Bounce rate can be found out by dividing the number of one-page visits by the total number of visits to the online store. This number should be kept as low as possible.

social media KPIs

Ecommerce KPIs for customer service

7. Customer satisfaction score (CSAT) 

Customer satisfaction score (CSAT) is a customer loyalty metric to gauge how satisfied a customer is with a certain product, service or overall shopping experience. Online merchants can measure this metric by asking customers to fill out surveys and record their responses with a numeric scale from 1 to 5 or a short answer. Some frequent questions to ask customers to measure SCAT are:

– How satisfied are you with our products?

– How would you rate your overall satisfaction with the goods you received?

– To what extent our products and services meet your expectations?

– How likely are you to buy again from us?

– Do you have any other comments or suggestions for us?

8. Net promoter score (NPS)

Besides CSAT, Net promoter score (NPS) is another KPI to measure customers’ satisfaction with the brand and products. NPS gives profound insights into customer relationships by revealing how likely customers are willing to recommend your brand to others. 

Ecommerce KPIs for project management

9. Budget

This KPI sounds simple but highly crucial for any type of business in general. Budget refers to the amount of money you allocated for a specific project. An ideal budget should be realistic, and repeatedly over budget might be a warning sign that the project planning needs immediate alteration. 

10. Return on investment (ROI)

Return on investment KPI is one of the most important metrics that online brands should take into account. ROI demonstrates the amount of return generated on a particular investment. ROI data helps store owners evaluate how well an investment has performed.

ROI = (the profit earned on an investment/the cost of that investment) x100%

For instance, an investment earning $300 profit with a cost of $300 would have an ROI of (300/300) x100% = 100%


There are many key performance indicators that are indispensable to business development. Evaluating proper KPIs can help online merchants gain a profound understanding of business performance to make better decisions regarding strategic factors. Ecommerce store owners should equip themselves with a well-designed and regularly monitored set of KPIs to routinely evaluate business progress and make critical adjustments when needed. 


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