5 Stats Every E-Commerce Professional Should Know

  • Strategy
  • November 29, 2018
  • by Krissie Leyland
  • 10 minute read

Do you want your online store to thrive in the world of e-commerce? Do you want to get ahead of your competitors? If you answered yes to both of these questions, it is critical that you start being driven by data and metrics.

Your online store holds data and metrics that represents your conversion rates, AOV and CLV and this data should be regularly measured. With this data, you can review your brand’s performance over an amount of time: prompting you to recognise how you can improve things like marketing, your websites user experience and more.

This article explains how to calculate and measure these metrics and how each one can boost your return on investment.

Let's begin with conversion rates in e-commerce..

What is a conversion rate in e-commerce?

A conversion rate in e-commerce is the percentage of users who take a desired action when visiting your online store. In order to accurately define e-commerce conversions, you need to understand your business goals. This goal could be to convert more sales overall or to convert more sales on a specific product, but it could also be an action such as visitors filling out a lead form.

The average e-commerce conversion rates are 1% – 3% but this statistic will fluctuate depending on the industry, the country or you are selling to, digital platforms you’re using and your site’s user experience on multiple devices.

It is, therefore, best to measure your own benchmarks with a tool like this one to analyse how your conversion rates are currently performing and try to meet or exceed your own metrics rather than focusing on industry averages.

Your conversion rate is the most important metric you can track and improve because you want to turn passing shoppers into paying, loyal customers.

Conversions can be divided into micro conversions and macro conversions.

  • A macro conversion is the ultimate goal of your e-commerce website, in e-commerce this is product purchases. This can be specific to a particular product or it can be an overall metric.
  • A micro conversion measures the early actions of a customer’s journey before they take the desired action of completing a purchase. This could be actions like subscribing to your newsletter, spending a certain amount of time on your product page or clicking “add to cart” button on a product.

Conversion rate statistics

Data from Econsultancy’s Performance Benchmarks tool provides us with these average conversion rates per sector from June 2018. You can see that online shopping has an average conversion rate of 1.30%, style and fashion: 1.40%, clothing: 1.40%, and retail averages at 1.50%.

Statistica argues that the average conversion rate by desktop is 3.78%, by tablet is 3.3%, and by smartphone is 1.29%.

How to calculate e-commerce conversion rates

This is the basic calculation for e-commerce conversion rates:

Take the total e-commerce transactions and divide that number by the total number of visits on your website. Then x 100 = conversion rate.

Example 1: (14 transactions / 100 visits) x 100 = a 14% conversion rate. Example 2: (2,000 transactions / 100,000 visits) x 100 = a 2% conversion rate.

How to increase your Conversion rate

Firstly, you need to understand exactly how shoppers are interacting with your e-commerce store. What are they clicking on first? Are they looking at a particular product for a long period of time before adding them to the cart? Are they looking at reviews just before they decide to add a product to the cart? And most importantly, how many visitors are converting into customers?

This will help you to get a better understanding of what you are doing right and where you can improve. Once you have this information, you can make the necessary changes in order to improve your online conversion rates. You can find this information by using Google Analytics.

Do your customers have to pay for shipping?

Apparently, 61% of people abandon shopping carts because of high shipping costs.

Do you have a remarketing strategy to bring your customers back?

Remarketing is powerful, it’s reminding potential customers about your brand via ads on popular channels such as Facebook. Moz says that remarketing makes your marketing up to 7x more effective, increasing both engagement and conversions.

Do you have live chat on your website?

Neil Patel says that by adding live chat to your website your conversions could increase by 45%. Giving customers extra help when they’re in the process of, or thinking about buying a product increases conversions.

Top tip: user-generated content increases conversion rates

One of the best ways to increase e-commerce conversion rates is to reuse user-generated content. UGC is content your shoppers have published about your brand such as positive reviews or photos of customers using your products in a positive way. We can call these customers “brand advocates”.

Brand advocates and user-generated content can help to influence new shoppers to trust your brand and products, reinforcing positive thoughts, persuading new shoppers to take a desired action such as clicking the “buy now” button.

What does AOV mean in e-commerce?

Average order value or AOV is another very important metric for e-commerce experts to be aware of. AOV in e-commerce is used to measure the average total of every order placed by a customer over a defined period of time.

AOV is used to drive decisions at the core of e-commerce businesses such as marketing, product pricing strategy, store navigation and more. Increasing your e-commerce AOV can dramatically accelerate your ROI.

AOV is critical for e-commerce managers and e-commerce managers should monitor their AOV on a regular basis to ensure ROI is increasing every month.

Does your e-commerce store hold a good AOV score?

In the same light as conversion rates, average order value depends on many variables such as industry, target audience, platforms, channels used and more. This means “good scores” vary a lot per category.

For example, AOV for luxury retailers will be a lot higher than for fast fashion. Therefore, it is best to measure your individual AOV and try to meet or exceed those metrics.

For instance, these statistics from Statistica show us that online jewellery and watch sales in the United States grew 39% year-on-year between 2012 and 2017, but online consumer electronics sales only increased by 16%.

How to calculate your AOV

You can easily calculate your e-commerce average order value by dividing your total revenue by the number of orders over a given period of time.


Your total revenue for November was £20,000 and the total number of orders via your e-commerce store channels for November was 3,500.

  • 20,000 / 1500 = 13.33
  • Based on this data, your average order value (AOV) during November was £13.33.

How to improve your AOV

Offer free shipping

Shoppers will add items to their cart in order to qualify for free shipping. So by offering free shipping on orders over a certain amount, you are likely to increase your average order value.

Loyalty programs

Loyalty programs are a great marketing tactic used to motivate customers to keep coming back for more. By offering valuable incentives to your customers your average order value will increase. You could offer discounts on future purchases, free products, pre-orders, priority shipping and more.


Bundling products together, into one sale is a great way to increase your average order value. Customers are usually happy to get more for their money and will purchase more than they planned if it is in an attractive bundle of products.

What does CLV mean in e-commerce?

CLV in e-commerce stands for customer lifetime value, it is the value a single customer contributes to your business over the lifetime they are with your brand. It is the estimated amount of total purchases one customer will make with your business over that lifetime.

Shopify adds, ”lifetime value takes repeat purchases into account to calculate the value of any given customer acquisition. LTV of a one-time buyer would obviously be much lower than that of a customer who buys repeatedly from your site.”

Customer lifetime value CLTV formula copy

Why is CLV important?

Businesses with 40% of repeat customers generated nearly 50% more revenue than similar businesses with only 10% of repeat customers.

Customer Lifetime Value prompts e-commerce managers to remember how valuable customer retention and brand loyalty is. After all, it is cheaper to retain customers than it is to attract new customers: it costs up to five times more to acquire new customers! And, repeat customers spend, on average, 67% more than new customers.

In sum, the more you focus on increasing your CLV, the more money you’ll make and the less time you will spend acquiring new customers.

How to calculate CLV

  1. Divide your company's total revenue in a time period by the number of purchases over the course of that same time period.
  2. Calculate the average purchase frequency rate: divide the number of purchases over that same course of the time period by the number of unique customers who made purchases during that time period.
  3. Calculate customer value: multiply the average purchase value by 1, and subtract the average purchase frequency rate from that number.
  4. Calculate average customer lifespan: average out the number of years a customer continues purchasing from your company.
  5. Then, calculate Life Time Value: multiply customer value by the average customer lifespan. This will give you an estimate of how much revenue you can reasonably expect an average customer to generate for your company over the course of their relationship with you.

Top 3 tips to improve your CLV

Regular email newsletters

Email newsletters are a hugely effective way to delight your customers by providing exciting, valuable information to make them feel included and keeping your brand at the forefront of their minds.

You can use email newsletters to inform customers about new blog posts you’ve written or magazines you have been featured in, discounts, sales and events coming up. Make sure to include a good call to action such as “find the offer here” with direct links to your online store.

Promotional offers and reward programs

Offer exclusive discounts, free gifts or free shipping to returning customers only, personalised to their shopping habits at your store.

If you wanted to be really clever, you could offer a rewards program just for your returning customers which offers incentives for every product they purchase- earning them points or money off on their next order, giving them a reason to return again and again.

Social media love

If you spot your customers tagging your brand in photos of them wearing or using your products, ask them if you can share the photos on your social media channels and tag them in the image. This will make your loyal customer feel great and appreciated and at the same time, you are using user-generated content, building trust in new customers.


By understanding exactly why all of these key metrics are so important for your e-commerce business and knowing how to calculate your own, you’ll not only be able to track your own performance, you’ll also know where you stand with your competitors.

You should regularly measure these key metrics on a monthly basis and be driven by data so that you understand exactly what your business needs to focus on in order to boost your return on investment.

Written By

Krissie Leyland

Krissie is passionate about e-commerce, cutting-edge tech, the internet of things and Artificial Intelligence. Krissie is a keen surfer and spends her spare time travelling or at the beach.

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