The key e-commerce KPIs you should be tracking (with formulas and examples)

Every online shop measures the company’s success against specific metrics such as turnover or profit. However, there are many more KPIs in e-commerce that online retailers need to keep an eye on. After all, by using the right metrics, you can better understand where the business stands and which measures can actually help you achieve your goals.

In this article, we’ll reveal which e-commerce metrics are particularly relevant, how to calculate them and how you can improve them. With the right figures, you’ll always have a firm grip on the helm of your business!

Key points at a glance

  • Key Performance Indicators (KPIs) help an e-commerce business gain an overview of its own operations and the entire customer journey. By analysing the data, businesses can make informed decisions and steer their efforts towards achieving their targets.
  • In the e-commerce sector, alongside turnover and profit, the following KPIs, amongst others, play an important role: customer lifetime value, ROI, conversion rate, returns rate, average order value and bounce rate.
  • You can calculate any key performance indicator and improve it by taking targeted action.
  • Modern software and ERP systems such as those from collana diva now provide you with all the key figures in real time, thereby making your day-to-day operations easier.

What are the 10 most important e-commerce KPIs?

The 10 most important KPIs you should track for your online shop are: conversion rate, click-through rate, average order value, returns rate, customer lifetime value, customer acquisition costs, return on investment, customer retention rate, cart abandonment rate and bounce rate.

These are KPIs that measure the success, performance and customer satisfaction of your online shop. They can be divided into sales KPIs, which relate to turnover and orders; marketing KPIs; customer KPIs; and performance metrics for your online shop.

We’ll show you how to calculate and improve these.

1. Conversion rate (CR)

For many businesses, conversion rate (CR) is the most important KPI in e-commerce. This metric shows you how many visitors to your online shop carry out a desired action – usually a purchase. It therefore measures how effectively your shop converts prospective customers into paying customers.

A low conversion rate means that, although many people visit your shop, only a few actually buy anything. A high conversion rate is a sign of your success as an online retailer.

How do you calculate the conversion rate?

  
FormulaCR = (Number of conversions : Number of visitors) × 100
ExampleYour website had 4,000 visitors last month, 200 of whom made a purchase. CR = (200 : 4,000) x 100 = 5 %

How can you improve your conversion rate in e-commerce?

To optimise your conversion rate, you need to make the shopping process as simple and pleasant as possible for your customers.

  • Ensure that products are presented clearly and concisely on the website, with high-quality images.
  • When shopping online, look out for accurate descriptions and honest reviews.
  • Optimise the checkout process and adapt it for mobile devices.
  • Offer a range of payment methods so that customers can choose the one that suits them best.
  • Where available, use certificates and quality marks to build trust with customers.
  • Be transparent about information relating to delivery, returns and so on.
  • Encourage purchases through special offers and discount campaigns.

Even small measures can improve the KPI. Incidentally, according to eCommerceDB in 2024 at an average of 3.3 %.

2. Click-through rate (CTR)

This KPI tracks how many people click on a link or an advert after seeing it. It therefore measures how effectively your online marketing captures your customers’ attention and whether your message encourages them to take action.

If an e-commerce business has a low CTR, it attracts little attention. A high KPI, on the other hand, indicates that your campaign is achieving its objective and attracting visitors to the website.

How do you calculate the click-through rate?

  
FormulaCTR = (number of clicks : number of impressions) × 100
ExampleYour advert was displayed 8,000 times and 200 people clicked on it. CTR = (200 : 8,000) x 100 = 2.5 %

How can you improve the click-through rate in e-commerce?

To improve this e-commerce KPI, you need to tailor your adverts more effectively to your target audience and make them more appealing.

  • Use clear, compelling calls to action.
  • Use high-quality images or videos that grab people’s attention.
  • Try out different advert formats and messages (A/B testing).
  • Carry out an analysis of your target audience and find out what appeals to them.
  • Incorporate elements of social proof.

One Study by Wordstream shows that the industry average for this KPI is 2.69 % (Google Ads Search Network) and 0.51 % (Google Ads Display Network). A good figure lies between 2 and 3 %. The higher, the better.

3. Average Order Value (AOV)

AOV is a KPI that indicates the average value of a shopping basket in your online shop. In other words: how much do your customers spend on average? A high AOV indicates that shoppers are willing to spend more per order, which has a positive impact on profitability. A low value suggests that customers are making several small purchases.

How do you calculate the average order value?

  
FormulaAOV = Total turnover : Number of orders
ExampleYour shop generates €50,000 in turnover from 800 orders. AOV = 50,000 : 800 = €62.50

How can you improve the AOV in e-commerce?

Improve the KPI by providing better incentives to encourage buyers to purchase more products.

  • Offer relevant additional products in the shopping basket („Customers also bought …“).
  • Show higher-quality alternatives or premium versions.
  • Deliberately set the threshold for free delivery slightly higher to encourage customers to fill their shopping baskets with higher-value items.
  • Offer discounts on orders over a certain value.
  • Offer product bundles on your website.

However, what constitutes a good figure depends on your objectives, products and target audience.

4. Returns rate (RQ)

Returns can result in high costs for a business and are an indicator of customer satisfaction. The return rate (RQ) allows you to track how many orders are returned. A high RQ means that many customers are dissatisfied – for example, with the fit or quality – or that their expectations have not been met. A low rate, on the other hand, means that your products are popular with customers.

How do you calculate the returns rate?

  
FormulaRQ = (Number of returns : Number of orders) × 100
ExampleOut of 3,000 orders a month, there are 250 returns. RQ = (250 : 3,000) x 100 = 8.3 %

How can you improve the returns rate in e-commerce?

To improve your RQ, you should reduce the number of returns. To do this, you need to identify the reasons for returns and then eliminate them, or at least reduce them. The following measures are possible:

  • Please provide detailed, comprehensive and honest product descriptions.
  • Use high-quality, realistic product images and, where appropriate, videos to give visitors a better insight.
  • Provide size charts or fit guides to help customers avoid buying the wrong size.
  • Optimise the quality of your packaging and dispatch to ensure that products arrive undamaged.
  • Use customer reviews to improve your products.

Return rates in e-commerce vary significantly depending on the sector. For example, the The University of Bamberg’s European Return-o-Meter (2022), stating that this stood at 64.30 % in the fashion and accessories sector, whilst it stood at 4.96 % in the home furnishings sector.

5. Customer Lifetime Value (CLV)

This KPI allows you to assess the long-term value of a customer to your shop. A high CLV indicates that your customers return regularly and generate significant revenue over time. A low value, on the other hand, means that they only make one-off purchases or buy infrequently.

Why is this important? Because the CLV helps you assess how much you can invest in customer acquisition, whether your investment in marketing activities is worthwhile, and which customers you should offer special benefits to.

How do you calculate CLV?

  
FormulaCLV = Average order value × Purchase frequency × Customer retention period
ExampleFor the past four years, a customer has been purchasing items with an average order value of €60. She places orders on your website around five times a year. CLV = 60 × 5 × 4 = €1,200

How can you improve customer lifetime value (CLV) in e-commerce?

Measures that strengthen customer loyalty, increase the average order value or improve the customer retention rate help to boost this KPI.

  • Boost customer loyalty with loyalty schemes or exclusive discounts.
  • Keep the customer relationship active through newsletters or after-sales emails – feel free to include personalised recommendations (make use of the data you’ve collected).
  • Use cross-selling and upselling to increase the value of the shopping basket.
  • Ensure an excellent shopping experience so that customers are keen to return.

Through a loyalty scheme, customers with a Probability of 62 % You’ll also spend more money on your website.

6. Customer Acquisition Costs (CAC)

Acquiring new customers is a typical cost item for online retailers. The CAC breaks down these costs and shows what it actually costs you to attract a new customer to your online shop. This metric takes into account all marketing and sales expenditure required to convert visitors into buyers. A low CAC indicates that you are already operating efficiently. A high CAC, on the other hand, suggests that you need to optimise your customer acquisition strategy.

How do you calculate customer acquisition costs?

  
FormulaCAC = Cost of customer acquisition : Number of new customers
ExampleLast month, they spent €8,000 on sales and marketing and, as a result, gained 200 new customers. CAC = 8,000 : 200 = €40

How can you improve the CAC in e-commerce?

To reduce your customer acquisition costs, you need to make your marketing and sales activities more efficient:

  • Use data-driven marketing strategies to precisely target the right audience.
  • Focus on content strategies and SEO to attract visitors to your website in the long term.
  • Improve your referral marketing.
  • Optimise your campaigns through A/B testing and consistently track your KPIs.
  • Maintain existing customer relationships.

Always consider CAC in relation to CLV. A healthy business usually has a ratio of at least 3:1 (CLV:CAC). This means that, over the course of the relationship, a customer will bring in at least three times the cost of acquisition.

7. Return on Investment (ROI)

ROI is one of the most important key performance indicators across all sectors. It helps you assess whether your investments and expenditure are paying off. A high ROI indicates that your investments are paying off and that your shop is operating profitably. A low or even negative ROI, on the other hand, indicates that you are spending more than you are taking in.

How do you calculate the ROI?

  
FormulaROI = (Profit : Investment cost) x 100
Example

You invest €5,000 in a marketing campaign, which generates revenue of €20,000. After deducting all costs, you are left with a profit of €7,500. ROI = (7,500 : 5,000) x 100 = 150 %

This means that for every €1 you invest, you get €1.50 back.

How can you improve your ROI in e-commerce?

You can increase your ROI by making more efficient use of your investments whilst maximising your profits. The following approaches will help you to do this:

  • Focus on measures with clearly measurable results.
  • Check your expenditure regularly and identify which channels are actually generating revenue.
  • Optimise processes in the areas of warehousing, dispatch and customer service to reduce costs.
  • Use automation to work more efficiently and save costs.

 

8. Customer retention rate

This KPI enables you to see how many customers remain loyal to your shop and keep coming back to buy from you. This is important because you can generally generate more revenue from regular customers. A high customer retention rate is desirable here, as it is also an indicator of customer satisfaction.

How do you calculate the customer retention rate?

  
FormulaCustomer retention rate = (Customers at the end of the period – New customers during the period) : Customers at the start of the period × 100
ExampleAt the start of the year, your shop had 1,000 customers. Over the course of the year, you gained 300 new customers, bringing your total customer base to 1,100 by the end of the year. Calculating the customer retention rate shows you what percentage of your original customer base has remained loyal. Customer retention rate = (1,100 – 300) : 1,000 x 100 = 80 %

How can you improve customer retention rates in e-commerce?

To improve this KPI, you should nurture your relationships with your existing customers and offer them incentives to make repeat purchases. Measures such as those recommended for CLV therefore work well here too. This allows you to improve two KPIs at once.

Investing in regular customers pays off, as Studies show. Whilst sales to new customers are successful in only 5–20 % of cases, the success rate for regular customers is 60–70 %.

9. Cart Abandonment Rate (CAR)

In some cases, prospective customers add items to their basket but do not complete the purchase. It is precisely this bounce rate that the CAR measures. A high figure means that many potential buyers abandon their purchase – often due to obstacles in the checkout process. A low figure means that everything is fine and you have nothing to worry about.

How do you calculate the CAR KPI?

  
FormulaCAR = (1 – completed purchases : shopping baskets created) × 100
ExampleLast month, 1,000 shopping baskets were created in your shop. Of these, only 400 resulted in a completed purchase. The CAR shows how many people abandon their shopping baskets. CAR = (1 – 400 : 1,000) × 100 = 60 %

How can you improve the CAR in e-commerce?

As most problems occur during the checkout process, you should analyse this and remove any obstacles:

  • Offer a streamlined checkout process without too many extra steps.
  • Please offer a range of payment methods.
  • Please provide clear information on delivery charges, delivery times and returns policy.
  • Use email shopping basket reminders to bring potential buyers back to your site.
  • Optimise your website for mobile devices so that everything runs smoothly, even when you’re on the move.

Did you know? In Germany, the average shopping basket abandonment rate stands at 65,7 %. In the price range between €1 and €30, it is as high as 77 %, as the uptain Half-Year Report 2024 revealed.

10. Bounce rate (BR)

The bounce rate is seen as an indicator of whether your website is meeting visitors’ expectations. This KPI measures how many visitors leave the shop immediately after visiting it. Reasons for a high bounce rate could include visitors not finding what they were looking for, or technical or content-related barriers. The lower the figure, the better.

How do you calculate the bounce rate?

  
FormulaBR = (number of bounces : total number of visitors) × 100
ExampleLast month, 5,000 people visited your online shop. 2,000 of them left the site straight away without viewing any other pages. BR = (2,000 : 5,000) x 100 = 40 %

How can you improve the bounce rate in e-commerce?

To achieve a low bounce rate, you should provide a technically sound, well-structured website with relevant content.

  • Make sure loading times are short.
  • Optimise the design for mobile devices.
  • Make sure that product pages are compelling, with clear information, images and prices.
  • Please avoid pop-ups or other distracting elements.
  • Use internal links and recommendations to draw visitors’ attention to other products.

How can you measure key performance indicators in day-to-day e-commerce operations?

Use modern systems to measure metrics and KPIs. Otherwise, manually collecting data can lead to errors and high costs. Shops with different business models, for example, rely on ERP systems.

An ERP system consolidates data from various areas – from procurement and sales to warehousing and accounts – and provides you with the key performance indicators in real time. This means you can see how your business is performing at any time and react immediately if KPIs start to go off track.

Keep track of your e-commerce KPIs with ease using collana diva now

With collana diva now You have real-time access to your company’s key e-commerce KPIs – from conversion rates and return rates right through to customer lifetime value. This allows you to see at a glance whether you are meeting your targets, where there is room for improvement, and which measures are worth implementing.

Thanks to automated reports, you’ll save time and be able to focus fully on what really matters: growing your business successfully. The only thing you need to do? Book a no-obligation consultation with our experts!

Share this article

X
LinkedIn
Facebook
WhatsApp

Our latest news

E-commerce KPIs under control: Achieve measurable growth with diva now

Do you want to view your key performance indicators – from conversion rate to CLV – in real time and improve them in a targeted way? Together, we’ll set up KPI dashboards, automated reports and workflows in diva now that enable you to make clear decisions and make your growth measurable.