Top 10 Shopify KPIs Every Brand Owner Must Monitor
Published: October 27, 2023 | E-Commerce Strategy, Tips & Tricks
As an e-commerce brand owner, monitoring your business’s performance is crucial to its success. Key Performance Indicators (KPIs) are metrics that help you track your business’s progress towards specific goals. In this article, we will discuss the top 10 Shopify KPIs that every brand owner must monitor to optimize their e-commerce business.
Shopify is one of the most popular e-commerce platforms, with over 1.7 million businesses using it to sell their products online. Shopify provides a range of features and tools to help businesses grow and succeed. However, to make the most of these features, it is essential to monitor your business’s performance using KPIs. In this article, we will discuss the top 10 Shopify KPIs that every brand owner must monitor.
Top 10 Shopify KPIs
- Conversion Rate: Conversion rate is the percentage of visitors to your website who complete a desired action, such as making a purchase. A high conversion rate indicates that your website is effective in converting visitors into customers. To calculate your conversion rate, divide the number of conversions by the number of visitors to your website and multiply by 100.
- Average Order Value (AOV): AOV is the average amount of money spent by customers on each order. A high AOV indicates that customers are spending more money on your website. To calculate your AOV, divide your total revenue by the number of orders.
- Customer Lifetime Value (CLV): CLV is the total amount of money a customer is expected to spend on your website over their lifetime. A high CLV indicates that your customers are loyal and continue to make purchases on your website. To calculate your CLV, multiply your AOV by the average number of purchases per customer per year and the average customer lifespan.
- Cart Abandonment Rate: Cart abandonment rate is the percentage of visitors who add items to their cart but do not complete the purchase. A high cart abandonment rate indicates that there may be issues with your website’s checkout process. To calculate your cart abandonment rate, divide the number of completed purchases by the number of carts created and multiply by 100.
- Traffic: Traffic is the number of visitors to your website. Monitoring your website’s traffic can help you identify trends and patterns in visitor behavior. You can use this information to optimize your website and improve your conversion rate.
- Bounce Rate: Bounce rate is the percentage of visitors who leave your website after viewing only one page. A high bounce rate indicates that visitors are not finding what they are looking for on your website. To calculate your bounce rate, divide the number of single-page visits by the total number of visits and multiply by 100.
- Customer Acquisition Cost (CAC): CAC is the cost of acquiring a new customer. A high CAC indicates that your marketing and advertising efforts may not be effective. To calculate your CAC, divide your total marketing and advertising costs by the number of new customers acquired.
- Customer Retention Rate: Customer retention rate is the percentage of customers who make a repeat purchase. A high customer retention rate indicates that your customers are satisfied with your products and services. To calculate your customer retention rate, divide the number of repeat customers by the total number of customers and multiply by 100.
- Inventory Turnover: Inventory turnover is the number of times you sell and replace your inventory in a given period. A high inventory turnover indicates that your products are in high demand. To calculate your inventory turnover, divide your cost of goods sold by your average inventory value.
- Net Promoter Score (NPS): NPS is a measure of customer loyalty and satisfaction. Customers are asked to rate their likelihood of recommending your business to others on a scale of 0 to 10. A high NPS indicates that your customers are satisfied and likely to recommend your business to others.
In conclusion, monitoring your e-commerce business’s performance using KPIs is crucial to its success. The top 10 Shopify KPIs that every brand owner must monitor include conversion rate, AOV, CLV, cart abandonment rate, traffic, bounce rate, CAC, customer retention rate, inventory turnover, and NPS. By monitoring these KPIs, you can optimize your website and improve your business’s performance.
If you want to learn more about e-commerce, CRO, conversion rate optimization, UX optimization, e-commerce innovations, KPIs, Shopify, SaaS platforms, and how to optimize your e-commerce business, reach out to geekspeak Commerce today!
