It’s critical to find effective ways to track your ecommerce KPIs. Staying on top of your valuable data means understanding your customers. It means effectively managing your inventory. And it means identifying the products that drive revenue. Fortunately, since you’re juggling hundreds of campaigns, thousands of products and millions of customer journeys, there’s certainly no shortage of data from which to gain actionable insights. But we probably don’t need to tell you that KPI tracking is easier said than done! As the amount of data we utilise grows (growing at a rate of 40-60% per year), it’s becoming more and more difficult to keep track.
Fortunately, there’s a brilliant solution: AI automated KPI monitoring.
In this article, we look at the key challenges and limitations of tracking ecommerce KPIs manually. Then we’ll outline how AI automation solves these key ecommerce business challenges.
4 key ecommerce KPIs
We’ve previously written about the 4 key ecommerce metrics you should be tracking on the Millimetric blog. But just to recap, you should (at least) be monitoring:
- Conversion rate: This rate is the ratio of sales you make per 100 visitors. It’s a helpful indicator of marketing success and the traffic you attract
- Average order value: Average order value(AOV) lets you know more about your customers’ behaviour. It also helps you understand what products to include in marketing campaigns, which products should be kept in inventory and your overall sales tactics
- Bounce rate: Bounce rate lets you know about the ‘stickiness’ of your website. It also indicates any technical issues you could be having
- Page/sessions: The page/session KPI lets you know more about the flow of your website. It also lets you know if there’s any page where you’re losing visitors. These are key metrics to understand to improve ecommerce SEO
Let’s have a look at some of the challenges and limitations of ecommerce KPI tracking today.
Firstly, it has to be said that monitoring KPIs and analysing the data to uncover insights is a huge undertaking for most businesses. A whopping 65% of businesses report having too much data to analyse today. While traditional BI tools might help the process, a significant amount of time and resources are still required to understand the data. This is especially true for ecommerce business with millions of metrics to keep track of.
This is an issue that tends result in one of three scenarios:
1. If you don’t have a data analytics team focused on tracking ecommerce metrics, then your employees end up spending huge amounts of time analysing data (on average 3.55 hours a week, in fact). This is time that could be better used coming up with creative, strategic solutions to business problems.
2. If you do have a data analytics team, then they end up spending all their time analysing data and crunching ecommerce metrics for other departments. This uses up time and resources that could be going towards innovative, data-driven projects that help your company stay ahead.
3. You simply have too much data to track, and some – maybe a lot – of it falls through the cracks and damages your revenue.
Manual KPI tracking overlooks critical anomalies
There are millions of ecommerce metrics, but when you’re limited to manually tracking KPIs it’s impossible to keep track of all of them. It’s natural to focus on the key metrics that you decide are the most important. But as a result of this selective analysis, around 60%-73% of all data goes unused for analytics. While not all metrics are created equal, and some ecommerce KPIs are certainly going to impact revenue far more than others, you could still be missing out on very important metrics by only focusing on the ones you think are going to be the most critical.
For example, one of our clients, a digitally-native personalised gifts retailer based in Germany, found that they were experiencing significant revenue leakage and they couldn’t identify the cause. None of the ecommerce metrics they were focusing on were showing anything unusual. However, once we integrated their data with Millimetric’s automated KPI monitoring platform, we found that a high page loading time on the checkout page was causing a huge percentage of users to drop off. By failing to identify this anomaly in their metrics, they risked losing €120k a month. Yet it simply wasn’t on their radar. Anomalies like this can go hidden in your metrics if you aren’t keeping an eye on certain ecommerce KPIs.
Manual KPI tracking is reactive, not proactive
Ecommerce is a competitive industry, to say the least. So to succeed you need to be fast. Very fast. But this is difficult to achieve when you’re manually tracking ecommerce KPIs. This is because you’re only able to be reactive. Reporting on KPIs normally happens on a weekly (or even monthly) basis, so analysis of KPIs isn’t generally done until reports need to be made. This means that issues in your data can go unnoticed until the data is crunched – often after the problem has occurred and damaged revenue – so you’re playing catch-up to fix problems that have already hurt revenue.
This is a problem that effects even the biggest players in ecommerce. For example, in 2019 Amazon accidentally priced down a mop by 90% in their ‘deal of the day’, then had to disappoint buyers by cancelling their orders. The retailer explained: “Despite our best efforts, with the millions of items available on our website, pricing errors can occasionally occur.” Customers were not impressed.
With manual KPI monitoring, even your best efforts can mean you miss revenue-damaging glitches. You are unable to proactively detect these issues as they happen.
Manual KPI tracking is static
Many traditional KPI tracking BI tools, like Google Analytics, have handy alert features that let you know when your ecommerce metrics have gone above, or below, a certain threshold. In theory, this helps you stay on top of a number of metrics at once. However, these alerts are based on static numbers – and we don’t need to tell you that nothing in ecommerce is ever static. Products are added and removed, prices go up and down, and seasonal changes have a huge impact on traffic, to name just a few examples of the many moving parts of an online retailer. Using static alerts means you will become overwhelmed by the number of alerts coming your way. Or you’ll be spending loads of time adjusting alert thresholds. These are the last things you want to be dealing with when you’re already trying to run a busy store.
Tackling the limitations of KPI tracking with AI
If humans could constantly crunch data, checking for fluctuations, anomalies and untapped digital performance opportunities, none of the challenges we’ve listed would be a problem. But we can’t. We have other pressing work matters. Many of us don’t have the data literacy skills. And we aren’t built for repetitive, frankly dull tasks like this.
Fortunately, AI and machine learning can take repetitive, dull tasks like this off our hands. The technology is able to autonomously monitor all of our data, only alerting us to the data fluctuations we really need to know about, when they happen. It’s also incredibly accurate and can run through data 24/7, so it can keep track of all your ecommerce KPIs even better than a whole team of data analysts could.
AI automated KPI tracking, like our SaaS tool, Millimetric, helps you:
- Save time, money and resources spent tracking and analysing KPIs
- Identify critical anomalies affecting performance in real time
- Move to a proactive model of tracking your KPIs. This allows you to address issues in your ecommerce data as soon as they occur, saving you money and guaranteeing a better customer experience
- Utilise data alerts that autonomously adapt to the fluctuations and trends in your ecommerce data
- Fully understand everything that’s going on in your data, This means that you’re empowered to make data-driven decisions that guarantee your online store’s success
Try out the Millimetric platform for free today. Or contact us at email@example.com to learn more about our bespoke Enterprise model that comes with full customisation to suit any workflow, agency-style consulting from our team of specialists and fully-supported set up.