Ecommerce | Anurag Gupta | Last Updated: 2019-05-16
The online marketplace is ballooning and a majority of merchants and vendors have already expanded the scope of their business to the online marketplace. Getting an e-commerce website design service and expanding the roots of the brick and mortar store in the realm of online commerce is the just foundation of your e-commerce business. And getting success in the e-commerce industry not just a matter of luck; it requires a lot of strategizing related to marketing, promotions, product catalog, quality analysis, etc., to ensure they stand out from the crowd. But that's not all! An e-commerce vendor also needs to measure various e-commerce metrics to know how his/her business is performing. Measuring the performance is imperative to scale the business to new levels and these e-commerce metrics would help you do the same.
One of the key metrics for e-commerce players is the conversion rate. Every advertising and marketing tactic they deploy is to boost the conversion rate. This is the king of all metrics as the main fight among e-commerce players is to get more conversions; the more conversions they get, the higher would be their revenue. Conversion rate in e-commerce is the number of browsing visitors that convert into paying customers. If your traffic flow is good but your sales targets are still not being met, there are high chances your conversion funnel is blocked. Estimating the conversion rate can help identify how many visitors are actually buying things from your online store and what percentage of your web traffic is simply escaping away. There are many tricks like push notifications, discount offers, and email tricks for conversion rate optimization.
Shopping Cart Abandonment Rate
Getting a visitor to browse through the products, select the desired one, add it to cart, and then abandon the cart is one of the scariest nightmares for any e-commerce vendor. Shopping cart abandonment rate is the number of visitors who abandon an e-commerce portal and do not complete sale despite putting an item in the shopping cart. This last minute change of mind could be because of extra details asked, a payment page that seemed unsafe, longer delivery period, complicated checkout, or high shipping charges.
Estimating the shopping cart abandonment rate can help in analyzing the factors leading to the abandonment and working on them to get more sales.
Average Order Value
Average order value can be calculated by dividing the total revenue earned by the products sale with the total number of purchases made by the online shoppers. Knowing the average order value is imperative for any e-commerce store to boost the revenue and even drive repeat purchases. In case the average order value comes out to be pretty low, it is a hint that the online vendors need to incorporate new tactics to increase it.
Estimating the average order value can help in creating new techniques to increase revenue by upselling other similar products or products brought together, selling products in bundles on a discounted price, giving away attractive discounts on minimum spend.
Customer Retention Rate
With more than 32% of e-commerce players considering customer retention a priority, the goal of an e-commerce business shouldn't be limited to getting more orders. Rather, it should be to build a loyal customer base and get repeat orders from them. This can be calculated by dividing the number of returning customers with the total number of customers buying from you. Majority of e-commerce business owners aspire to get repeat business from their buyers but unfortunately fail to do so. This rate would point towards the strength of the relationship you have with your customers and whether you have built the required reputation and trust in them to get repeat orders.
Estimating the customer retention rate could help in devising new strategies like giving away special discounts for next purchase, offers for the next order, staying in touch through newsletters, etc., to boost repeat business.
Return & Refund Rate
When you are in the online marketplace, especially connected to the clothing industry, getting item returns and return orders is a normal sight. For any online vendor, knowing the return and refund rate is as important as the conversion rate. It is calculated as the percentage of the products returned to the total sales in that particular period. Return and refund requests are a sign that although customers are liking your products at first but are not satisfied with them after seeing in person. It might be because the quality is not at par; the actual product is different from one shown in the pictures, incomplete details provided, etc.
Estimating the return and refund rate of the business is imperative to know what is wrong with the product. You need to work on the quality, provide accurate product details like fabric, size, fit, item description to avoid getting more returns.
Improving e-commerce business is based on getting more customers, getting them to place orders of larger quantities, and getting them to make purchases again. The metrics discussed above are directly or indirectly related to this and by calculating and studying these metrics, one can ensure that their e-commerce revenue grows stronger.
Your email address will not be published. Required fields are marked *
Web Design | May 17, 2021
Its been over 2 decades since the internet has become an inextricable part of our lives. It began as an e...
Ecommerce | May 17, 2021
Businesses turning digital is not an unprecedented concept. In the last decade, there was a whopping 45% ...
Web Design | Dec 29, 2020
It is common that many website owners complain about the security of WordPress. The idea is that an open-source scrip...