What is KPI?
Posted Feb 17, 2016 by Lina Vashurina, Ecwid Team

Online Store KPI: What It Is and How It Works

KPI is short for “key performance indicators”. They help you understand where and how fast your business is moving, diagnose problems, and achieve goals. They work just like the speedometer and oil level sensors in your car, only with regards to your online store.

When you’re about to make a decision, we suggest you rely on numbers and data. Those figures will be discussed in this article.

What Is the KPI

There are a lot of performance indicators, which overlap and influence each other. For different types of businesses, there are different indicators.

This article will tell you about the performance of an online store, which aspiring entrepreneurs can use for performance reviews.

“Weak” indicators are collected easily, but few provide for an understanding of your business. For example, they can be misleading about the attendance at an online store. You can have a hundred thousand visitors a month, and zero sales, or 200 website visitors coming from the thematic forum and just one buying. It means there is no target traffic. But “strong” performance depends on “weak” performance. For example, if target traffic is dropping, it will affect your profit.

We have selected some KPI for your convenience and divided them into 3 groups:

Site Performance

Site performance includes everything that happens on your website: the amount of visitors, which pages lead to purchases in the “cart”, and why people leave.

To start you need to master the standard Google Analytics metrics. From that point you can collect more data.

With the help of analytics systems you can track:

  • the number of visitors (traffic) in a specific period. Pay attention to the dynamics (increase or decrease) and periods of activation visits. The indicator is useful for calculating the conversion.
  • traffic structure: how many visitors come to the site from different channels (social networks, mail, search engines, contextual advertising, direct referrals, etc.) in absolute numbers and percentages.
  • number of views per product. It is possible that visitors rarely browse the products you are betting on. In that case, it is necessary to make changes to the site: change navigation, add new photos of the products, reduce the price, etc.
  • the total number of orders in a specific period.
  • conversion: the ratio of orders to traffic as a percentage.
  • conversion for each channel: the number of orders by visitors from a certain channel compared to the number of visitors.
  • the proportion of new customers: the number of new customers during this period as a percentage.
  • pending orders (abandoned cart): the number of visitors that add a product to their cart, but do not complete the purchase.

Each KPI should be analyzed in order to understand in which areas you score high or low.

Sales Key Performance Indicators

Sales and everything connected to sales (shipping, returns, exchanges). This includes:

  • total orders: all orders received, not only through the website, but also through the comments in social media, offline, etc.
  • achieved orders: orders that have reached the destination.
  • the share of processed orders: the ratio of completed orders compared to the total number as a percentage.
  • causes of unfilled orders: this shows what problems need to be corrected first. The reasons are different: the buyer has not confirmed the order or decided not to buy, the product was not in stock, the transport company lost a parcel, etc.
  • delivery structure: the percentage of orders that are delivered by post or courier service. Here you can delve into the reasons for returns for each type of delivery.

Economic Indicators

This concerns the performance in terms of money and includes:

    • annual sales.
    • average order size: the amount of completed orders divided by the number of orders. Compare the average check for the different product categories or advertising channels, and draw conclusions about the effectiveness.
    • profit: income minus consumption. It is useful in further calculations.
    • the average profit per order: income divided by the number of completed orders.
    • the cost of advertising: the percentage of income that you spend on advertising.
    • the cost of attracting a buyer: the cost of advertising divided by each new customer over this period. Consider this for each advertising channel.

How to Use the KPI

Setting KPI tracking is a topic for another article. We have already started talking about it in the post about Google Analytics setting.

Here are a few methods of working with performance indicators:

1. Regular Monitoring (Preventing Problems)

When you are receiving tons of orders and your profits are growing, you don’t think about statistics. Bad idea. KPI Monitoring helps you to notice the weaknesses and take actions. Make sure you act on time, before it’s too late.

Let’s look at an example:

When the number of orders increase, so do the number of returns. It seems logical. But when you collect the statistics and see that the percentage of returns increase as well, you have to understand the reasons. What products often return? Why? Are there more returns after a courier service? You may decide to change the shipping company, modify the product, or improve your customer service.

2. Solving a Problem

Any problem in the online store depends on several factors. Analyze them, find the weak spots, and correct them.

For example:

The effect of advertising fell down. You invest more money, but the number of customers no longer increases. It is necessary to analyze the KPI on advertising channels: advertising costs, orders, conversion, average check, etc.. Identify the most unprofitable channel, and either discard it or think about how to make it more effective. It may be better to target advertising messages, change the entry point to the site, or alter the advertising message.

But what about the external factors? They should also be taken into account. What if your competitor is taking all your customers? Here especially it is necessary to analyze the performance indicators. Identify your strengths and improve them. To influence external factors, you have to  improve your company’s power. KPI will help you get there.

3. Achieving Your Goal

This is similar to the previous point. To determine the appropriate KPI goals, you have to work hard to improve each.

For example:

Your goal is to increase the conversion rates in the next quarter. Analyze the conversion rates for each sales channel and estimate an indicator of pending orders.

Unfinished sales are a vast field for improvements. You can set up a Destination Goals (Google Analytics) to see at what stage people leave. Also you will learn which sales channels are responsible for visitors drop the basket, which items are often overlooked, etc.

conversion funnel google analytics

If people leave your website when they are asked to enter personal data, you should improve the relevant page. Maybe it is not clear where they should enter data. If they leave the payment page, maybe you should add more payment methods.

In the Ecwid store you can find the available statistics on unfinished orders (for paid plans).


Use this KPI or add your own. For example, you can use additional indicators to assess the performance of employees, warehouse operations, delivery services, etc. Nobody will improve the online store for you, but the KPI monitor will help you choose the right direction for change. Good luck!

About the author
Lina is a content creator at Ecwid. She writes to inspire and educate readers on all things commerce. She loves to travel and runs marathons.
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