The draw of eCommerce for the consumer lies with convenience and choice. With just a few clicks of a mouse, consumers can have pretty much anything they want.
The power of eCommerce for brands is more singular: it lies with data. With just a few clicks of a mouse, e-commerce marketers can see what people are shopping for, how they are browsing and how to reach them. With DTC e-commerce combined with new visualizations and data dashboards, there is more opportunity to use customer data than ever before.
Using data is nothing new for most e-commerce brands. For nearly two decades, brands have used data to drive sales, reach their audience and upsell. But some efforts are more successful than others, and the success largely comes down to choosing the right data to focus on.
Now that it’s nearly 2020, every eCommerce brand should be using key metrics in both advertising and storefront efforts.
McKinsey & Company pulled no punches in their report on CPG brands using data: winning brands “make bigger and more frequent adjustments to their SKU portfolios and are more likely to weigh profitability, feedback from the customer and sales team, and supply-chain complexity” in their product and inventory decisions.
If success in tracking metrics for e-commerce is dependent on choosing the right data, how can e-commerce brands make sure they are focusing on the right information?
“There are so many different data points you can consider,” Frank Puma of ad agency Mindshare told eMarketer. “Data will mean different things for every client, depending on what they have. But realistically, you need to focus on the key data points that matter for the job at hand.”
In other words, finding the metrics that work best for your brand depends on your brand focus, your past successes and what you want to get out of your marketing and sales efforts.
Figuring out the focus of your brand will determine what kind of engagement you want from customers. Looking at past successes will help you make tweaks to your storefront based on what you know to work.
According to the eMarketer report, marketers identify customer engagement, brand loyalty and customer retention as the most important metrics for marketing success in DTC e-commerce.
But those are the overarching metrics; how do advertising, storefront and shipping metrics affect customer engagement, loyalty and retention?
Marketing efforts - from the top of the funnel to the bottom — are ultimately what drive revenue for e-commerce businesses. For DTC brands in particular, advertising can set the tone for customers before they ever buy a product.
There are dozens of different marketing metrics you can track across many different channels and platforms. But these are five specific metrics that best infor customer lifetime value (LTV) — or the engagement and retention we mentioned above.
Marketing Attribution. Look at where your traffic is coming from. Is it organic or paid? Mobile or desktop? Was it on first contact with a paid ad or after a prolonged drip campaign? Understanding attribution for e-commerce will go a long way toward building LTV in customers.
Click-through Rate. Look at your average CTR for your emails, social campaigns, paid search ads and more. CTR is how many clicks you receive divided by how many impressions your ad had. In other words, it’s an indication of how well your marketing efforts speak to your audience. If your impressions are high and your CTR is low, you can look at shifting your message.
Brand awareness. If your long term goal is customer loyalty, your audience should be engaging with your brand organically. Look at direct traffic and branded keywords to determine how aware your audience is of your brand. You can also utilize social listening tools to see if your brand is receiving any community mentions and shares.
Once you reach your audience successfully, the tracking shouldn’t stop. Bringing consumers from the top of the funnel to the bottom requires a dedication to a customer’s entire journey. Which means looking at your e-commerce storefront for ways to improve their experience and boost your sales in the process.
With marketing and sales so closely intertwined in DTC e-commerce, these overlap with advertising metrics. However, they go beyond a simple conversion rate. Conversion is important, but it doesn’t give you the full picture for how your storefront is performing and your opportunities for e-commerce optimization.
With that in mind, these are the top three metrics to track for your e-commerce storefront.
Bounce Rate. How many consumers in your audience are landing on your website only to bounce again after just one page visit? If your bounce rate is particularly high, prioritize making your e-commerce storefront as user friendly and engaging as possible to encourage your audience to stick around.
Cart Abandonment. You’ve brought someone all the way through the funnel only to see them abandon their cart at the last moment. This typically means your checkout process is too complex, your prices are too high, or your storefront isn’t engaging enough. You can also shift your pricing strategies to find the best possible price for your audience and to avoid surprising customers once they go to check out.
Average Order Value. If your average order value is lower than the cost of acquiring a customer, you may have a problem in the long term. Look at ways to boost AOV with product suggestions, upgrades and customizations, and product bundling.
Even with these e-commerce metrics narrowed down, the average e-commerce brand will still have a lot to keep track of. With marketing, eCommerce and fulfillment platforms typically kept separate, how can you keep straight what is working and what isn’t?
To start, you shouldn’t treat each of these categories as a metrics silo — your advertising metrics affect your cart abandonment which can affect inventory accuracy. They are all interconnected. Change your mindset toward how metrics work together, and your profitability will change as well.
Having the platforms separate doesn’t mean your metrics have to remain that way too. You can use a profit analytics dashboard, for example, to bring together the most relevant metrics for advertising, sales and fulfillment. Monitoring your profit and marketing performance in eCommerce shouldn’t be hard — and a single dashboard for all your metrics makes it easier.