Ecommerce Performance Analysis: Metrics and KPIs to Measure Performance

In this post, we’ll walk step by step through each stage of your funnel — from awareness to loyalty — examining how ecommerce data analysis can improve your marketing and drive more sales.

Converting visitors into customers (and subsequently into advocates) is no easy task, nor is it cheap. Part of the difficulty lies in understanding which campaigns, offers, and onsite tactics produce the best results—not just at the top of the funnel, but over the long term as well.

Given the multichannel nature of ecommerce, a new customer may have searched for your brand on Google right before making a purchase. That sort of one-two funnel is easy enough to track. But how can you be sure which ad made the initial and lasting impression that drove them to search?

In this guide, we’ll walk step by step through each stage of your funnel—from awareness to loyalty—examining how an ecommerce performance analysis can improve your marketing, drive more sales, and retain repeat customers.

What ecommerce performance analytics or KPIs are important?

Leading indicators you’ll need to look into differ depending on the stage of the funnel you’re investigating. Let’s walk through each stage and the metrics you’ll need to consider at each stage of an ecommerce performance analysis. 

1. Discovery

When most people hear “brand awareness,” they think one of two things:

1. That’s a waste of time and money, and it doesn’t work.
2. That’s only for big-name brands like Coca-Cola and Tesla.

Just take a moment to think about a local mom-and-pop shop or restaurant in your town. Where’s the first place you turn locally for something like a slice of pizza? Odds are a specific place immediately jumped to mind. Why? Brand awareness. It might not be the result of an ad campaign, but that brand is positioned—in your eyes—as the number one choice.

The vast majority of consumers have severe brand bias. More than ratings (social proof), free shipping, free returns, or discounts and sales, people are clicking on brands they recognize. It’s explained by the exposure effect, where people are drawn toward things, concepts, and people they’ve been exposed to more frequently. It’s why remarketing leads to more branded search traffic.

With brand awareness, we’re focusing on the very top of the funnel. You’re most concerned with the following questions:

1. How much new awareness are you generating?
2. What channels drive this awareness?
3. How effective is each channel?
4. How do new users engage with your brand?

Metrics to track this part of your ecommerce performance include:

• Impressions and reach
• Social media engagement
• Brand mentions or sentiment 
• Branded search volume 

Be sure to conduct ecommerce performance analysis like this for each channel your business invests in to better understand how effective each one is at generating awareness and how users from that channel interact with your site.

You may find that users from a specific channel, like Pinterest, have a longer buying cycle because you’re engaging them so early in the purchase journey, whereas a new user through search may be looking for the specific products you sell and be ready to buy.

2. Acquisition

The danger of a metric like brand awareness is getting lost in vanity metrics that don’t tell the whole story. You might go viral on TikTok and accumulate millions of views, but if those users don’t actually visit your website and convert, was it really as successful as you first thought? Creating thousands—or even millions—of impressions has to be balanced with acquisition costs both among new users, as well as over time.

The acquisition stage of your ecommerce performance analysis shows how well you’re capturing an audience, diverting them to your website, and capturing their data for future retargeting. 

Important key performance indicators (KPIs) to track at this stage of the funnel include:

• Traffic sources
• New users vs. returning visitors
• Time on site
• Bounce rate 
• Cost per click 
• Micro conversions (e.g., email opt-in or form submission rate)

Naturally, site-wide conversion numbers are a fantastic starting point. To do that, analyze your conversion metrics in the Shopify dashboard. These conversion metrics give you a baseline, but you can also run additional reports filtered by “traffic referrer” to see how sales and conversation rates vary by channel.

3. Conversion

A conversion ecommerce performance analysis focuses on the middle and bottom sections of your funnel. It’s used to get an idea of what behaviors—on-site actions like pages visited, searches, and so on—lead to a conversion.

By the end of this part of your performance analysis, you should be able to answer four questions regarding purchasing behavior in your online funnel:

1. What behaviors lead to conversion?
2. How effectively are we encouraging these behaviors?
3. What segments of our user base are driving the highest conversions?
4. What sales or marketing channels drive the highest conversion?

Like we did earlier, you will also conduct a channel analysis but this time, you’ll segment all users or purchasers while also inspecting your revenue channels.

The following KPIs are signals that show you how the buying process works and what features are most important for consumers before they commit: 

• Customer acquisition cost
• Behavior flow and engagement
• Conversion rate
• Cart abandonment rate

Another option is surveying web visitors to see what percentage are there to shop, browse, or perform another action like applying for a job or a wholesale application. This exercise helps to sort the convertible visits from the unconvertable again.

To get a more detailed sense of user behavior, heat mapping and visitor recording technology like Peep! integrates directly with Shopify so you can clearly see what triggers drive action on site.

Peep! can record user interactions on your site to pinpoint areas of friction.

Lastly, onsite search will open up a treasure trove of information straight from your users on exactly what they’re looking for. From here, you can begin to analyze the user flows for each channel based on total conversions, seeing which pages and channels were critical drivers.

4. Customer retention

Your funnel doesn’t stop at conversions. Or at least it shouldn’t. Creating loyal followings and turning customers into brand evangelists should always be of utmost priority. Not only does customer satisfaction increase your customer lifetime value, allowing you to spend more on customer acquisition, it also fuels free affiliate marketing from the words of happy customers.

The loyalty aspect of your ecommerce performance analysis should focus on answering five questions:

1. How effective are you at retaining customers?
2. How many of your customers are you at risk of losing?
3. On average, how often do customers purchase?
4. What stops first-time purchasers from making a repeat purchase?
5. How can you improve your customers’ experience?

Happiness and delight are difficult emotions to quantify. But with a combined approach, you can get a strong idea of how evangelical your buyers are. The main KPIs to track are:

• Customer lifetime value (CLV)
• Repeat purchase rate
• Product reviews
• Net Promoter Score (NPS)

Another great metric to look at is your average time between purchases. This will show you if you need to either:

1. Decrease the time in between purchases and cross-sell more often
2. Increase average order value (AOV) by offering bundles or ways to increase the standard value of a product

If you have high purchase values or average order values, you need fewer purchases per year for each customer. Conversely, if you have a low average order value, you’ll need people to purchase more often to maintain a high LTV.

Finish off your analysis with a qualitative voice-of-customer survey. This type of customer feedback is an open-ended question that your customers or visitors can answer in their own voice. 

As Avinash Kaushik says in his book Web Analytics: 2.0: “It cannot, no matter how much you torture the data, tell you why something happened.” Only your visitors and customers can tell you why something happened, so engage them in a conversation through reviews and surveys.

Pura Vida Bracelet’s monthly subscription is dubbed the “Bracelet Club”.

Pura Vida Bracelets faced this problem when looking to scale its ecommerce business. With products averaging around $6, it’d take countless new users to reach huge sales if a customer had small order values or didn’t purchase frequently. 

To combat this, the company instituted the Pura Vida Monthly Club, helping to increase the frequency of purchases by selling three bracelets via a monthly subscription for $14.95. To help drive average order values, they also instituted free shipping when customers spend $25 or more. 

What commerce performance metrics should you track?

Net sales

Net sales is the total revenue you’ve generated once you’ve accounted for any refunds, discounts, or taxes. It’s a top-line metric that shows your profitability and customer behavior. 

For example: if you have $500,000 in gross sales revenue but just $105,000 in net sales, are you providing too generous of a discount to all customers, rather than just first-time visitors? Do most customers end up returning their item? Are you selling in regions that sabotage your profits after paying sales tax, import fees, and duties for your overseas customers? 

Net sales can also help justify the amount you’re spending to produce or manufacture products because it doesn’t include the cost of goods sold (COGS) in the calculation. Subtract the COGS from your net sales to get your gross profit: the dollar amount you’re left with after paying for all of your expenses.

Conversion rate

Conversion rate is the percentage of people who’ve completed an action. Most commonly, we apply the metric in terms of sales: out of everyone who visited your website, what percentage of them became paying customers?

A high purchase conversion rate indicates that your site is effectively guiding visitors toward making purchases, while a low percentage may suggest issues with user experience, website design, or product offerings. Combine this metric with other data points—like heatmaps, session recordings, or funnel analysis—to pinpoint friction and overcome it as part of your CRO analysis. 

Since your site’s conversion rate directly impacts sales, improving it is one of the most effective ways to grow revenue without necessarily increasing traffic. Just a 1% higher conversion rate on a site that usually processes $85,000 in daily sales could net over $26,000 in extra revenue per month—without investing thousands of dollars into marketing campaigns that acquire new customers. You’re simply maximizing value from the traffic you’re already generating.

Purchases aside, you can apply the conversion rate formula to almost any other action on your ecommerce website. What percentage of people completed your email pop up form? Added a product to their shopping cart? Shared the page with their friends on social media? 

These micro conversions can paint the bigger picture in your website performance analysis. Even if someone didn’t buy a product during their first session, they might’ve made a smaller commitment—like signing up for your email list or adding a product to their virtual wishlist. That still should be considered a win, albeit a smaller one. The shopper has shown intent to buy in the future.

Traffic

Traffic is the total number of visitors who visit your ecommerce website. It’s not to get confused with pageviews—that’s the amount of times each individual URL on your site is accessed. You might have 66,000 monthly visitors that contribute 200,000 pageviews. 

Website traffic is a fundamental KPI in a business performance analysis because it’s the starting point for generating sales. Social commerce excluded, people can’t buy from an ecommerce business if they don’t visit the website. The more traffic you drive to your ecommerce store, the more people you have to virtually sell to. 

Traffic analysis also helps you determine how effective your marketing efforts and advertising campaigns are. By tracking traffic sources (organic, paid, social, referral, etc.) and the conversion rate of visitors from either channel, you’ll determine which platforms are driving the most visitors and adjust your strategies accordingly.

Plus, when you know what the “norm” looks like traffic-wise, it’s easier to identify seasonal sales trends and peak seasons. Knowing that you have a 25% increase in site traffic during the Black Friday Cyber Monday weekend, for example, gives you the heads up to plan inventory, website design, and promotions accordingly. 

Gross sales

Gross sales is the total amount of revenue you’ve brought in before any expenses or deductions. It’s also known as turnover and is the starting point to assess how much money is coming into the company from all sales combined.

Gross sales isn’t necessarily the best metric to look at in isolation. But when you compare it against other ecommerce KPIs—including net sales, COGS, and operating expenses—you’ll uncover how profitable your business is, where the market is heading, and get a stronger grasp over the business’ cash flow. A significant gap between gross sales and net revenue might mean you’re giving away too much profit on discounting, for example. 

You can also break down gross sales per product or category to assess how well a particular segment is performing. Say you have a single product bringing in 90% of your gross sales.

The business would be risky—issues in the supply chain when sourcing that product might lead to a stockout, which would leave you with only 10% of your typical revenue. A smart strategy would be to expand the product line or diversify products within the same best selling category. 

How to measure commerce performance with Shopify’s analytics

Tailor your dashboard to your needs

Shopify collects data about how people interact with your ecommerce website to show the data you’ll need to accurately measure performance. 

But the sheer amount of data collected can seem overwhelming, and not all of the key ecommerce metrics on offer are critical to a full-scale ecommerce performance analysis. You also might need to benchmark website performance over a certain period of time, rather than the default real-time reports that Shopify analytics creates.

We make it easy to drag and drop your most important ecommerce business metrics into a curated reporting dashboard. Go to Analytics to find your key metrics at a glance, and customize the interface with the most important KPIs identified for your business, depending on the funnel stage you’re exploring. 

Analyze your data

You’ll find preconfigured dashboards inside your Shopify analytics. Use these to combine metrics or dimensions to get the exact level of granularity or intersection of sales data you're looking for.

Custom reports help you understand trends or patterns in your performance analysis, like viewing conversion rate and sessions in a single view. Both KPIs don’t paint the full picture in silo, but combined, they’ll highlight any gaps in the user experience that’s sabotaging your revenue. 

If you make modifications to a prebuilt Shopify report based on a specific analysis you need to do and return to, you can save that CRO report and display it on your dashboard for future reference—no fiddling required.

Build data exploration from scratch

Explorations are custom reports that you’ve built from the ground up inside your Shopify analytics. Start with a blank canvas in the Analytics tab and add in the metrics or dimensions you want to see. You can then save it to your dashboard for easy referencing by yourself, teammates, or stakeholders in the future. 

Say you’re analyzing the conversion stage of your conversion funnel. Stakeholders might be putting pressure on you to improve the site’s conversion rate, but in order to do that, you need to consult metrics like cart abandonment or bounce rate. 

Because Shopify tracks everything that happens on your ecommerce website, this subset of metrics can easily get lost. But a custom exploration collates your most important metrics on a single screen that’s digestible for stakeholders. The exploration becomes a vehicle for you to easily prove the successes of your CRO campaigns and fight for more budget. 

Run your own performance analysis to plug the gaps in the customer lifecycle

Conversion funnels are a law of nature. Just as gravity explains how water falls down a mountain, a funnel is our way of explaining why and how visitors interact with our website. Data analysis is just our way of tracking and explaining it. Users build awareness over time and steadily travel down your funnel from conversion to brand evangelist.

But it’s not always that simple. Understanding which factors, channels, and tactics worked requires a deep analysis at each stage of the funnel. To better improve both the user experience and your bottom line, stay on top of your online funnel, keep a repository of your analysis, and constantly refine your ecommerce data analysis.

FAQ on ecommerce performance analytics

What is ecommerce analytics?

Ecommerce analytics is the data you’ve collected about your store’s performance or customer behavior. You can use these analytics to predict trends, spot upcoming threats, and capitalize on campaigns or strategies that are working well.

How do you measure the performance of an ecommerce website?

1. Conversion rate
2. Cart abandonment rate
3. Cart recovery rate
4. Bounce rate
5. Average order value
6. Customer acquisition cost
7. Net Promoter Score (NPS)
8. Refund rate 
9. Traffic acquisition channels
10. Email opt-in rate

What is the most popular ecommerce analytics tool?

Google Analytics is one of the most popular tools to track website analytics, though most ecommerce platforms (including Shopify) have advanced analytic tracking capabilities to monitor revenue-related metrics like orders, revenue, refund rate, cart abandonment or recovery rate, and average order value.

What is performance in ecommerce?

Ecommerce performance is a way to monitor how effective your business is. It takes a bigger picture look at your website activity, digital marketing data, and customer or order-related information to gauge how well your business is performing.