9 July 2019
By Jon Akass
Jon is a Product Owner at Volo, and writes about how retailers and brands can improve their ecommerce performance.
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In the fast-moving world of fashion, a strong presence online is crucial for success. Ecommerce managers need to guide their businesses through the complex world of online shopping in order to stay relevant.
A big advantage of digital sales is data — with every purchase, every click, every page view, customers leave a digital trail that businesses can use to hone their message, products and delivery. Although a blessing to those who know how to use it, this data is a curse to businesses struggling to crunch the numbers and stay on top of the ever-shifting sands of big data analytics.
Becoming the true master of big data takes time and investment in analytics tools. But a little guidance can go a long way.
What we intend to deliver here is a crash course in ecommerce analytics — pointing out major categories of data and the critical data point you need to watch every day. By paying attention to the right things, you can cut through the noise and grab the insights you need to boost online sales.
Let’s get started.
If you’re going to have any success using metrics to improve online performance, it’s first vital to understand which types of metrics are important to your ecommerce efforts. You need to know which metrics have the most impact on SEO and sales efforts.
By grouping your metrics into major categories, it becomes simpler to focus your efforts and sift through the data to pick out information that is relevant to the goals at hand. Broadly speaking, there are three different types of metrics to focus on — primary metrics, secondary metrics and operational metrics.
#1 Primary metrics
A primary metric centres around your ultimate business goals. The best primary metrics are those with clear goals from which you can measure success, like customer conversions. Ideally, ecommerce managers should limit primary metrics to no more than one or two at a time so that they can focus solely on achieving that main goal to the best of their abilities. From there, you can later add more metrics and checking these can become part of your routine on a daily basis.
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A primary metric should always be measurable in the moment, ensuring you can check your product performance against your primary metrics on a day-to-day basis. Doing this daily will help you fulfil your short term goals, like looking at stock clearance while still focusing on your long term goals, such as your conversion rates. In addition to conversion rates, other important primary metrics includes basket size (or order size measured in currency) and order frequency. These metrics are helpful but can be difficult to measure within certain channels, like Amazon, so you may also want to check revenue per visitor, total daily revenue, average and granular cost-per-click, or campaign ROI.
#2 Secondary metrics
Secondary metrics are long term. These are the metrics that help you determine the ongoing health of your business, and include things like customer satisfaction. Unlike primary metrics, these results don’t need active monitoring unless there’s an actionable problem. As such, there’s much more scope for as many secondary metrics as you need to assess overall brand health.
For the most part, an ecommerce manager will only need to work to change these metrics when or if they directly begin to impact the primary metrics. Other examples of secondary metrics might be annual or quarterly growth rates, profit margins, or customer lifetime value. Secondary metrics could also be technically focused, for example, looking at site speeds or software bugs.
#3 Operational metrics
Operational metrics tend to be where most of the action happens. These are the helpful tools which allow an ecommerce manager to recognise how exactly they can drive their primary metrics and include focusing on things like which online features most often lead to an increase in conversions, basket sizes and order frequency. If you like, these are the driving force of your primary metric success, which then ensure your secondary metrics stay on the right path.
Examples of operational metrics might include feature engagement rates (which site features are most and least often used), feature bounce-rates or customer service complaints.
So, those are the types of metrics. But, which specific metrics should you focus on daily? The truth is that this varies from business to business. However, for apparel brands (and online retailers more generally) there are some clear outliers that everyone needs to understand.
#1 Conversion rates
You already know how much conversion rates matter for success. What you might not realise is that tracking these metrics is all about segmenting them for increased understanding.
Instead of looking at your conversion rates on the whole, separate these into operational metrics which you can apply to each of your online campaigns. Zooming in on things like conversion by traffic source can show you where most of your customers are coming from.
This kind of granular inspection will help strengthen your efforts on popular channels, as well as boosting your presence in areas where you’re getting less attention. Looking at traffic from devices is also vital in a world where mobile devices now count for around 27% of retail ecommerce.
#2 Basket size
The average basket size metric measures the number of items that are sold in a purchase. To get this metric, it involves dividing the number of invoices by the number of total units sold. This is a great metric to check daily to help your ecommerce team understand your customers’ preferences and needs.
This metric allows you to see whether how many items your customers purchase and what you can do to help entice them to spend more. For example, you could offer packaged deals, discounts or suggest other items that could be bought alongside their purchases. This will help increase the average basket size of your customers, leading to more sales.
#3 Order frequency
Order frequency is a metric that calculates the average number of times a customer makes an order within a given time period. This is a great metric to help you track the purchasing behaviour of your customers and see how often they buy from you.
You can change the time frame that is set to calculate this metric so depending on what information you’re looking to gather, this can be a versatile and helpful measure. However, a year’s time frame is a good baseline to follow so you can see customer buying habits more clearly.
This will help you to adjust your campaigns based on how often people shop. For example, do people purchase more frequently during certain periods of the year that may be off-season? If you can find these patterns, you can change your ecommerce campaigns and offer certain discounts or free delivery and increase sales.
While we have covered the metrics that are worth checking on a daily basis, that doesn’t mean you should neglect every other one. Here are some metrics that are worth checking on a regular basis, so you have a greater understanding of your ecommerce campaigns.
It’s worth considering individual product performance. However, this is difficult to track for many brands, as you need the right tools to do this, such as an ecommerce platform which provides analytics capabilities. This is a pressing primary metric for any fashion retailer, so it is worth investing in the right tools you need to make it a priority.
When you list products online, each one is sure to see varying rates of success. It’s vital to track conversions coming from each of your products. That way, you’ll know whether your trainers or tops need more attention in their product images and listings, especially if traffic shows that customers are viewing said products but simply not converting the way you might hope.
Tracking product performance will allow you to focus efforts on high performers (driving revenue) and develop new strategies for struggling products — making sure that everything in your catalogue performs to its best capability.
Shopping cart abandonment
Lastly, look at shopping cart abandonment. This can be a very telling metric that, if monitored as a project to focus on improving, can help you understand why a conversion hasn’t taken place. After all, you’ve already driven the traffic, and customers are obviously interested enough to near completion. Examples of what can impact shopping cart abandonment are low product reviews, complex form fills or confusing prices.
You can track shopping cart abandonment in the background and maintain it every now and then using an ecommerce platform with a conversion funnel or by manually checking visitor flow. This can help focus on what’s causing abandonment, and work on retargeting those customers who walked away.
New vs. returning customers
Given how essential returning customers are to success, it’s also worth tracking just how many returning customers come to you time and again. This is perhaps one of the best secondary metrics you can hope for, and it will go a long way towards keeping your primary metrics on track.
Reselling and upselling are critical to every industry, and fashion is no exception. When selling to returning customers, there are far fewer acquisition costs, and shoppers often make larger purchases. You need to make sure that you have good customer service, experiment with different re-engagement strategies and listen to customer feedback. Building a loyal customer base is one of the best ways to grow your brand in the long run.
Of course, judging whether customers are returning isn’t always easy. On average, in fashion, 10% of customers return for more. One of the best ways to test this is to use an ecommerce platform with customer satisfaction capabilities. Or, you may want to check traffic from outreach efforts like email newsletters. Either way, this is a way to test who’s coming back and whether you need to work harder to create those ongoing relationships.
Everything in business comes back to revenue, and the fashion industry is no different. If you aren’t making money, you’ll struggle to produce quality products and effectively compete with other brands.
Again, making the most out of revenue metrics is all about segmentation. That way, you can judge how much money you’re making from each of your traffic sources. This provides operational metrics which can show you where you’re doing well and where you need to double up your efforts.
You also need to understand your average order value (AOV) and the monthly volume of orders broken down along product lines and channels. This will allow you to gauge ROI and the amount of advertising spend you can accommodate for certain products, along with the value of pushing different products across different channels.
For the most part, AI-driven ecommerce platforms are the best solution to aid this process, allowing you to directly track your retail ecosystem on the whole in one easy step. Otherwise, you should make sure to compare revenue results from every avenue directly.
The regular tracking of various types of ecommerce analytics is vital for success. It provides you with actionable areas of focus, which could boost your online sales and visibility to no end. Of course, keeping track of data like this isn’t always easy across multiple channels. Particularly with third-party marketplaces, it can be challenging to collect the data at all. Then categorising, sorting and tracking all of the individual streams creates a headache.
This is where technology comes into play. Ecommerce platforms that deploy AI driven analytics are more accessible than ever. Coming out of the data science shadows with easy to use interfaces delivered on subscription models, these platforms make the collection and analysis of data far simpler.
By investigating these solutions, you can supercharge your ability to generate and analyse data, freeing time to take actions based on your new information-rich decision-making power. However you do it though, one thing remains certain; regularly checking your metrics is the most important way to the top.
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