“eCommerce sales increased 17.8% in the US in 2016 holiday season. – Emarketer”.
2017 holiday season is already here. It is the time of the year where the mood sets in for consumers to spend, one of the involuntary actions performed during holiday seasons.
As an eCommerce brand, you’ll be prepping for the shopping frenzy with marketing creatives, email campaigns, newsletters and discounts. Good luck with those!
However, tracking is one of the overlooked priorities that need to be set right to derive valuable intelligence on how well your campaigns are performing, which idea is spearheading sales and which one to re-strategize. A full-on eCommerce agency can get tracking done or even a fine SaaS tool would help (more on this later).
Statistics have that holiday season guarantees at least a 30% increase in sales. To make it merrier, tracking crucial eCommerce metrics is a necessity and so here we are with a gist.
Average Order Value indirectly educates customers’ purchasing behavior. It is the average eCommerce dollars customers spend when they purchase from your website.
Average Order Value in some way is the starting point that concludes your total net profit. Increasing AOV is the most effective and cost-free way to improve profit. With more discounts, customers often tend to buy more. However, the discounts have to be smartly placed as more discounts can actually take a toll on the overall profit.
Total Revenue / Number of Orders Placed = Average Order Value
Gross Profit Margin tells you how much money generated through sales actually remain with the brand.
Gross Profit Margin informs the performance of each product in terms of how much profit margin it yields, whether the shipping or procurement cost is too high, or the discounts are making a dent in profit margin.
The first metric to know to derive Gross Profit Margin is the Gross Profit. To know your Gross Profit, subtract the overall cost of products (including procurement / manufacturing cost, shipping etc) with revenue earned by selling the products.
This translates to Gross Profit = Overall Sales Generated (Revenue) – Overall Cost
For instance if you buy products worth $1000 and sell it for $1500, your Gross Profit would be $1000 – $1500 = $500.
Now, divide the Gross Profit figure ($500) by overall revenue figure ($1500). Which means $500 / $1500 = 0.33. Now multiply the result by 100 which means 0.33 * 100 = 33%. This is the Gross Profit Margin percentage.
Gross Profit Margin = Gross Profit / Revenue * 100
Holiday seasons are sure to bombard your servers with unexpected amount of traffic. Though performance optimization is the key here, getting to know the traffic resources can be fruitful.
Organic search, paid marketing, email campaigns, social platforms, mobile traffic and direct visits are the most common gateways that pull traffic. Without stopping with just the traffic numbers contributed by each platform, dig deep to know which platform directs consumers who actually convert.
Excavate the conversion metrics for each platform through your analytics tool.
By knowing the traffic source that provides better conversion, you can zero in on platforms that need to be focused more.
Conversion rate shows your business’ performance by revealing how many visitors have actually performed the action you have envisioned. In eCommerce domain, conversion means a successful checkout.
Apart from showing positive after effects of your marketing efforts, conversion rate throws light on other issues that might turn away your visitors. Loading time, UI flaws, irrelevant suggestions, inappropriate upselling pop-ups and it could be more.
Number of website sessions divided by successful checkouts reveals your eCommerce conversion rate.
Website Sessions / Successful checkouts = eCommerce Conversion Rate
Your job doesn’t end with tracking metrics only till sales. If you do so, you’ll be missing an important takeaway that a holiday sales marathon would leave you.
It’s the post sales effect. However, it simply can be determined by tracking one single metric which is return rate. You can calculate both the number of products returned and the total value of products returned.
Do not stop there. Actually the work gets much deeper here as finding the reason behind the return is the actual benefit you get. It may be of a poor checkout experience, poor page loading speed, shipping flaw, broken packages or anything else.
Give your customers their chance to write down positives or negatives about their experience with your brand in the form of reviews. Track reviews and you’ll get to know what has gone wrong.
These are the metrics you can focus on for effectively restrategizing or coming up with new plans for the next holiday season. To track these, you’ll need Google Analytics Expertise.
eCommerce agencies that cater to CRO requirements could be a fine thought for outsourcing the tracking job on your brand’s behalf. In certain cases, eCommerce tools like TargetBay or advanced analytics tools like Kissmetrics would be handy.