Key Metrics to Track for improving your E-commerce business Performance

An e-commerce KPI dashboard is essential for growing your business. Here are four key metrics to track:

Channel-Wise Performance

With the rise of online marketplaces in India like Jiomart, ONDC, and Pharmeasy, along with existing marketplaces like Amazon, it's crucial for brands to know their performance across various marketplaces. Analyzing sales data from these platforms reveals which marketplaces generate the most revenue. For instance, in January 2024, ONDC crossed 6.75 million cumulative orders, with 3.56 million (52.8%) being mobility orders and 3.19 million (47.2%) being non-mobility orders, as reported by The Economic Times. Jiomart delivered 6 lakh orders per day in 2022, marking a 2.5X increase year-on-year. PharmEasy achieved 8.8 million orders recorded as of the financial year 2021. In 2024, Blinkit handled 65.3 million orders, a 66% increase from 2023's 39.2 million orders. Identifying trends on each platform helps businesses find the most strategic platforms and products for their target audience. This multi-channel analysis enables businesses to focus their marketing efforts effectively and identify areas for improvement.

Total Revenue

Monitoring total revenue is vital for understanding your e-commerce business's financial health. This metric shows daily and monthly revenue, providing insights into the performance of all SKUs and top-performing SKUs. Identifying areas for improvement in that particular marketplace is essential for optimizing performance. Understanding revenue patterns helps businesses make data-driven decisions to enhance product offerings and promotional strategies, boosting overall revenue. Tracking weekly and monthly sales performance aids in identifying trends and making strategic adjustments in terms of advertising and operations. According to McKinsey & Company, companies that strategically reduced underperforming SKUs by 10-20% experienced a 5-10% increase in overall revenue, attributed to their improved focus on higher-performing products.

Total Orders (Per Day)

Tracking daily transactions provides insight into product demand and consumer behaviour. By analyzing the total number of orders and the average order value, businesses can identify peak buying times and adjust their marketing strategies to maximize sales. Aggregating total orders into top movers and low movers helps in identifying trends and planning inventory management strategies effectively. This data also aids in creating cross-combos and planning promotions to increase sales. McKinsey's research underscores that integrating personalized recommendations can substantially boost Average Order Value by 10-30%, showcasing the transformative effect of customized marketing strategies.

Returns Report

Returns are an inevitable part of e-commerce, but understanding the reasons behind them provides valuable insights. A comprehensive returns report helps businesses identify the sources of returns and the reasons, such as damaged products or incorrect SKUs. By understanding these insights, businesses can take actions to reduce returns, enhance the customer experience, and maintain high service quality standards through improvements in packaging and service quality. As reported by the NRF, businesses that analyze return data strategically and implement targeted strategies have reduced return rates by 15% in six months, leading to better customer satisfaction and cost savings.

These critical metrics, when tracked and analyzed regularly, provide valuable insights into the performance of your e-commerce business and help in making informed decisions to drive growth and success.