How to set up e-commerce KPI Reporting part 1
This article is beginner-friendly and covers setting up KPIs and tracking them in e-commerce.
KPIs or Key Performance Indicators are easily measurable and provide visibility on e-commerce growth. I outline the importance of data-driven decisions and result tracking in almost every post, including 3 bonus e-commerce strategy tips, so an article on setting up e-commerce KPI reporting only seemed natural.
In this article, we will discuss the following steps:
Define your KPIs
Calculate your conversion rate
Create reports with Google Looker Studio
Dig Deeper with Advanced KPIs
Reporting frequency
Define your KPIs
In this part, we will cover the basics of getting started with KPI tracking. The fundamental indicators every e-commerce manager or analyst should track are:
Unique users
Bounce rate*
Number of conversions (orders)
Total conversion (order) value
Average order value
Conversion rate (per user)
Average session duration
*You can track bounce rate or engagement rate, depending on preference
Calculate your conversion rate
Conversion rate determines how many of your users convert to customers. To calculate your conversion rate, divide the number of purchases by the total number of visitors to your website, then multiply that number by 100.
If I have 1,000 unique visitors on my website and 45 purchases, the conversion rate will be: (45/1000)*100 = 4,5
IRP or Statista can help you benchmark industry and regional averages. There are a lot of varying conversion rates depending on markets, devices, and countries, but getting started with an industry-average conversion rate is best.
2. Create reports with Google Looker Studio
Now that you have defined the KPIs you want to track, it’s time to set up a reporting template.
Sometimes, the first step may be to create an Excel spreadsheet and manually enter all data from various platforms. While it can be a practical exercise, it increases your margin of error and is increasingly time-consuming as your business grows.
Tools such as Google’s Looker Studio (previously Data Studio) allow you to integrate all your data from various platforms in one place and transform it into a customizable dashboard, perfect for on-the-go reporting.
This means you can combine data from GA4, CMS, Google & Meta Ads, etc, and combine them in one seamless reporting format.
Google Looker Studio Report Template example. In the top right corner, you can edit the tracked period (03-09 February) and the data will update itself automatically.
You do need to take some time to set up your data sources and reporting templates. You can also start with a template made by Google with different YouTube tutorials. I will have a Looker Studio tutorial coming soon!
On Microsoft’s side, Power BI is a renowned option, which requires a bit more setup and elbow grease and can be quite overwhelming at first. So if you are just getting started, Looker Studio is a perfect option. If Excel reporting is your preferred option, you can export data from Looker Studio in an Excel format to keep as a backup.
3. Dig Deeper with Advanced KPIs
Be careful not to get lost in the metrics. The abundance of metrics to track may overwhelm and distract you from leveraging your data-driven strategy. Start simple, with clear metrics that actually matter like the ones presented in point 1.
As you progress, you can also start to track more advanced traffic KPIs such as:
Number of sessions
Sessions per user
Number of new users
New user to returning user ratio
Session conversion rate
Devices
Demographics: geography, age, gender
etc
When it comes to conversions, you may want to track the following metrics as you progress:
Number of new customers
New vs returning customer rate
Top countries
Top cities
Most viewed items
Most added-to-cart items
Best-sellers by order value (% of total orders)
Best-sellers by order quantity (% of total orders)
4. Reporting frequency
My advice when it comes to how often should you report is the following. Look at your platforms’ data daily to get an idea of your average users and orders, while taking mental notes. Provide a simple report weekly with the metrics presented in point 1. You might also add an overview of PPC, paid social, and other campaign performance - more on that in a separate post. Have a monthly report template for more detailed information and how the metrics progress.
Tip: I like to have a monthly reporting Excel spreadsheet with:
A column for each month
A line for each metric categorized by traffic, conversion, PPC, etc
This way I can see and compare results quickly across the months from a bird’s-eye view.