Optimizing Your Online Shop’s Performance

Online Shops

You know, as a module developer, and web agency before that, we often see merchants struggle with metrics and the analysis of their shop’s performance and unfortunately, what usually happens is that they just set it aside. But it is extremely important that from the start merchants monitor their shop’s performance closely, to see if the decisions they make whether they’re strategic or operational work towards achieving their goals.

Step 1: Set Your Objectives

You’ll want to get started with setting your objectives and defining an appropriate strategy. From there, you can determine what are the key performance indicators also called “KPI’s”. The end game is all about return on investment and net profits. But from the get-go, most entrepreneurs will usually focus on generating revenue, before trying to reduce costs, once sales volume become more significant.

So start by setting some realistic objectives linked to revenue, such as $ / € sales volume, site traffic or conversion rate for example. Then, once the launch and initial growth phase are behind you and you have established a solid foundation for your e-commerce you can start setting more refined objectives that are specific to your business.

Step 2: Identify The 5 Fundamental Kpi’s

In order to effectively measure revenue and understand its mechanics, 5 indicators are essential:

  1. The first is site traffic: this is simply the number of people that visit your online shop on a daily, weekly or monthly basis. It’s the one thing you need to monitor very closely upon your website’s launch. You need to be vigilant about it, and quickly course correct by implementing actions to boost visibility and visits. You’ll want to analyze not only global site traffic, but also break it down by page and product. The more you go into detail, the better decisions you’ll be able to make.
  2. The next step is understanding your traffic sources: You need to know exactly which channels bring you the most or the least qualified visitors so you can invest more in the ones that work for you, and drop the ones that cost you money but don’t generate results. This indicator will provide you with valuable insight in order to optimize your shop.
  3. In a similar fashion, you’ll need to focus on your conversion rate: which is simply the ratio of paid orders to site visitors. This is usually between 1% and 3%, depending on your industry. If it is too low, you’ll need to investigate if there are any issues in the order process or if your product pages are efficient and convincing, if the call to action buttons are visible and work correctly and so forth. You can also identify products that convert better than others.
  4. You’ll also want to turn your attention to net margin. That’s a very meaningful metric for any entrepreneur. This is simply Revenue Costs. Many merchants fail to determine this accurately and underestimate the investment and promotional costs of an e-commerce website. In today’s economic environment, price wars are also common and net margin can plummet very quickly. So, keep your eyes on these at all times.
  5. Finally, pay attention to the average cart amount, which is the average amount in $ /€ of orders placed by customers over a specific time period. (Average cart amount = sales volume / number of customers).

This may vary according to your business model, but in most cases, measuring your average cart amount and working to improve will allow a few things:

  • First, it will improve your cash flow
  • Second, it can also build up customer loyalty: the better you understand their needs and offer complementary products that match their desires, the more likely they are to return to your shop in the future. This can be leveraged later via private sales for example.
  • And last, it allows you to hedge sales volume related risks, should you suffer a drop in site traffic for example and most importantly, it is much easier and less expensive to increase the average cart amount than to increase site traffic which takes time and financial resources, whether it’s SEO or paid advertising.

 Once you have these basics down, you can then start digging deeper, and add new KPI’s that are linked to your objectives. There are potentially many of them, and it will take time and practice to understand when and how to use them.

Step 3: Use Dedicated Measurement Tools,

Generally speaking, many of these KPI’s can be found in your website’s back-office. When you browse through PrestaShop’s back-office for example, you will see some KPI’s at the top of each page that are specific to each area of the back-office. Google Analytics is also a must-have. It’s free, very comprehensive, and it integrates seamlessly with E-commerce solutions such as PrestaShop. If you work with a web agency, they can also recommend specific tools that can help you measure additional important KPI’s that you will have identified beforehand.

Step 4: Optimize Your Online Shop

Once your analysis is complete, the idea is, of course, to draw some conclusions and take action to improve your strategy and optimize your online shop. For example, this can imply marketing actions, or changing your site’s structure and/or design. In that last case, you’ll want to have some testing and comparison tools, which are commonly called A/B testing. With most E-commerce solutions, there is a lot of additional functionality that can be added to your website to help you optimize it.


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