The 5 most important e-commerce metrics for rental shops

by Eliisa L.

29 May 2020
0 Comments

Running an online shop without following any metrics is like shooting aimlessly with your eyes closed. You might be lucky and hit the target, but you wouldn't know what caused it. Thus, you wouldn't be able to repeat the hit.

Quantitative metrics together with qualitative insight about your customers tells you everything you need to know about your shop’s performance - and how to improve it. So, tracking the right metrics will help you better understand your customers' behaviour and make informed decisions based on your improved understanding.

While there are a bunch of good tools you can use to follow and analyze your online metrics, Google analytics and Facebook provide a lot of information you need to get a better understanding of how your website and social media are doing.

However, it can be overwhelming to choose which numbers or percentages to follow. The good thing is, you don’t have to. The key is to know which metrics make the most significant impact on your business - and we’re here to help with exactly that.

Metrics vs KPIs 

Before we dive into the different metrics, let’s clear up some terms and how they affect strategies. As a business, you want to track both metrics and key performance indicators (KPI), but many people mix them up as they fall into the same category. 

Metrics are what you use to measure processes in all areas of the business, while KPIs are what you use to measure the success or performance of specific processes. So, while tracking website visitors is a good metric, tracking the number of bookings and reservations is a great KPI. 

KPI versus Metrics

Website Traffic

It’s important to know how many visitors enter your website - but following website visitors also allows you to understand your visitors. Knowing and understanding who the visitors are, where they’re coming from and how they found your site is a huge advantage. You can utilize this information to make decisions and plan marketing efforts according to what seems to work.

Device

Make sure your site is optimized on all devices. The most common occurrence we come across with smaller companies is that they focus only on desktop-optimization. This is a huge loss since 52.6% of all internet traffic is generated from mobile devices, meaning that they might be losing potential customers. In Google Analytics, you can easily find out how many of your website visitors are browsing your site using desktop and how many are using a mobile device.

Geography

Knowing where your visitors are located and what language they speak enables you to plan content and marketing campaigns better to match with your key audience. Most likely, a significant share of the traffic comes from the country where your company is located because of Google's local recommendations. Furthermore, the language and different language versions of your website have a significant effect on where people are visiting your site from.

Demographics

Google Analytics is even able to tell you in what age group your website visitors belong and what gender they represent. Planning your website content and offering based on your website visitors' demographic information is an effective way to boost up your online sales.

Channel, source, and medium

Every e-commerce manager should be aware of their most effective traffic channelssources, and mediums. Channels tell if the visitor has found your website via e.g. organic search, paid search, or social media. Other most common channels of traffic are direct, referral, and email.

Source split the channels into smaller pieces. For example, social media can be split into Facebook, Instagram, and Twitter.

Lastly, the medium can tell, for example, whether the traffic from a specific source was generated by a paid campaign or organically.

A useful tool, if you want to follow the performance of your different ad campaigns with Google Analytics, is the Campaign URL-builder. 


👉 Make sure your website is optimized for all devices.
👉 Promote your offerings & site on social media.
👉 Optimize your site based on your website visitors geographic and demographic information.
👉 Recognize your most successful traffic channels, sources, and mediums.

Sales Conversion Rate

Sales conversion rate is the percentage of people who visit your site that end up making a purchase. While it seems like an obvious thing to track, it’s a good indicator of whether your marketing efforts are really paying off as they should.

For example, a high visitor rate but low conversion rate could suggest that the visitors are expecting one thing and getting another, which drives them away from your site. This all might lead back to slow pages, inaccurate communications of the offering or just poor navigation on the site.

Website speed

There's no more effective way to make your website visitors leave the site than slow loading times. Therefore, make sure that your website hosting provides fast servers, compress large content such as images, and allow "lazy loading" which means that the content of the web page loads when the visitor scrolls down the page.

Inspect your page speed

Clear navigation

Don't let your website visitors get lost on to your website. Including too many links and call-to-actions per single page makes the website experience overwhelming and confusing. Internet users don't want to play Sherlock Holmes on your website. Therefore, make the navigation clear and highlight the call-to-actions that generate the most value for the customer. Remember, less is often more.

Attractive product information

One of your website's most important jobs is to provide sufficient and relevant information about the equipment and services you are selling. However, the content that is meant to inform the website visitor should also be attractive and selling to turn the anonymous visitor into a potential customer. Using high-quality images, detailed descriptions, and highlighting benefits rather than features will take you far in creating attractive product listings.

In order to calculate your conversion rate, use the following formula:

metrics_conversion

So, if 1,000 people visited your store and only 10 bought something, the conversion rate would be 1%. If your conversion rates are looking low, don’t worry - the average conversion rate for the sports equipment industry is 3.1%. You still want your conversion rate to be high as possible, so here’s a few things you could try in order to increase the number: 

👉 Speeding up your site and optimizing it by using keywords.
👉 Improving the navigation of the website.
👉 Using high-quality images and well-thought-out descriptions of your products.
👉 Making sure your communications and promotions are accurate and clear.

Average Order Value (AOV)

AOV refers to the average amount of money spent on each purchase made in your store. Obviously, you want your customer to spend as much as possible while shopping on your website, so tracking this metric gives you the opportunity to benchmark and figure out what works best for your store and your audience in terms of increasing the shopping cart size.

Product recommendations

Product recommendations are a great way to grow the cart size. The most common way of sliding in some product suggestions are either on the product page, under the ‘’People also viewed these products’’ section, or during check-out.

Based on the gear the customer has either viewed or added to their rental order, you can make suggestions on what else they might need to make their experience even better. Keep in mind that the majority of up-selling happens with overlooked, smaller products that the customer might’ve forgotten - helmets, gloves, etc. Why not offer a coffee voucher for after they return from their outdoor adventure?

Product sets & Promotions

Who doesn’t love a discount? You can encourage your customers to get more by offering bundled equipment sets that include everything they need with a small discount. This does not only increase the order value, it also makes the shopping experience faster and smoother, as the customer doesn’t need to spend time figuring out what they need.

Highlight pro equipment

People naturally want to use the best equipment. Highlighting the benefits of pro-equipment helps customers understand the higher value of the product, making it easier to up-sell the more expensive products. For more on how to write eye-catching product descriptions in our product listings blog post

👉 Suggest relevant products and add-ons at the check-out.
👉 Offer products in sets with a small discount. 
👉 Highlight and promote the more ‘’pro’’ equipment for better performance. 

Shopping Cart Abandonment Rate 

Shopping cart abandonment measures how many people add something to their cart but end up leaving the site without completing the booking. This tells a lot about the different behaviours, and if there’s something off-putting in checkout process that's making the customers leave. There's a few ways that can help luring the customer to finish the order.

Re-marketing

Targeting your online ads specifically for those website visitors who have added equipment to the cart but never completed the order is an effective strategy to encourage these people to finish their booking.

Ask only relevant information

People are lazy by nature. Therefore, make the online booking process as simple and fast for them as possible and only ask details that you specifically need in order to prepare the equipment in advance.

Understandable content

This might seem a bit of repetitive but it cannot be highlighted enough that understandable and relevant content is essential for any successful e-commerce website.

👉Check your website navigation: make it simple and clear enough so the customers can shop smoothly.

👉Consider using re-marketing strategies like targeted ads and follow-up emails to bring back undecided customers.

👉 Make sure your copies are simple and encouraging.

 

Cost Per Purchase

Cost per purchase (CPP), cost per acquisition (CPA), customer acquisition cost (CAC) - the loved child has many names. However, the meaning is same: it measures how much you're paying for acquiring individual orders. Tracking your CPPs helps assess the effectiveness and profitability of your marketing efforts. Here's how it's calculated: 

costperp

As a shop owner, you want to make sure that your investments in online ads and campaigns aren't overweighting the generated revenue. It's also important to remember that CPP should always be measured with your AOV in order to get a better understanding of your success: If your average cost per purchase is 50€, and your average order value 100€ - you're doing well. However, if your AOV is equal or lower than your CPP, you still have work to do. Here's a couple of ways you can benefit the most from paid advertisements:

👉Understand where your target audience can be reached and create ads accordingly - no sense in using up campaign budgets on randomly selected channels.
👉Segment your campaigns based on different target audiences in order to get the best responses. 
👉Clear communication and multiple call-to-actions, reinforced by landing pages.

 

While all of the different metrics available are good to follow and use to reinforce your business, these are the best ones to start off with in order to get sufficient understanding of how your online store and site are performing.

For more industry-related news, trends and e-commerce tips in our latest e-books - download them here for free.⭐

Eliisa L.

The storyteller that spends her time in the studio, outdoors, or creating the best, most relevant content for rental shops.

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