To be ahead of competitors in ecommerce, it is not enough to have only good products. You need strategic insight together with data-driven decision-making to distinguish yourself from others.
To improve furniture ecommerce, tracking important performance indicators (KPI) helps to understand trends in markets, improve customer experience, and increase profits.
This blog analyzes six crucial ecommerce KPIs that all furniture traders should monitor. These indicators form the basis of every successful online furniture enterprise – from assessing marketing efficiency to optimizing shopping journeys.
What Are The Top 6 KPIs To Measure?
Conversion rate
The percentage of visitors to your ecommerce site who complete a purchase is what you call the conversion rate. It is calculated as the purchase number divided by the total number of visitors multiplied by 100. This KPI shows how well your site converts visitors into customers; it shows if you present products effectively, create a good user experience, and have an attractive website overall.
Big Furniture Group reveals that in June 2022, furniture retailers had an average conversion rate of 2.87% while it fell to just a mere 1.25% at the end of June 2023. This means there was a reduction in terms of conversion rates by 1.6 percentage points across the year.
How to improve?
Periodically check your conversion rates, and stop unproductive ad campaigns and try new advertisement testing. Constantly monitor consumer response when working on furniture commerce website development. Even if these metrics vary over time, trend monitoring will help you increase the rate of conversion.
Average Order Value (AOV)
The average amount of money spent by customers on every invoice is called AOV. It is determined by dividing the total revenue from sales by the number of orders placed. This metric for furniture sellers helps them know how people buy things and how to arrange their prices better.
The latest figures from Statista show that the method of payment by shoppers determines the Average Order Value (AOV). For instance, in Q3 2020, online shoppers using desktops and laptops had an average AOV above $120.
However, when it comes to tablets and mobile phones, this was about $85. Therefore, this means that shoppers are likely to spend less when they are using mobile devices as opposed to using computers for an ecommerce furniture store.
How to improve?
To improve AOV, you can sell products in bundles, provide discounts on minimum purchases, or encourage the sale of other related items through an upselling technique. Hire ecommerce virtual assistant to solve the problem of low AOV on mobiles, and introduce exclusive mobile discounts that come with product bundles or with at least a certain order value.
Cart abandonment
This KPI indicates how many people dropped things in their shopping carts without finalizing a purchase. The formula for this is taking the ratio between unclaimed baskets and payments made by those who had intended to buy. A high abandonment rate can indicate problems with order processing like hidden delivery costs or hard-to-follow payment methods.
Statista stated that approximately 88.05% of online shopping carts were abandoned across different industries during March 2020. As per Truelist, around 75.6% is the average cart abandonment rate across the globe. Such significant levels of abandonment among online shoppers result in heavy losses (about $18 billion annually) to all ecommerce traders.
How to improve?
- Use remarketing techniques to target customers who haven’t completed their purchases with the help of a virtual personal assistant.
- If your website is slow to load then it can lead to an increased rate of shopping cart abandonment by up to 75% (Approx. ).
- Solve any problems that may exist in your conversion funnels to avoid pushing away potential customers when you finalize furniture ecommerce design.
- Explain any fees associated with shipping and handling so that customers do not feel cheated.
- It is also important to offer a money-back guarantee to customers who may be hesitant to buy your products.
- Offer the guest checkout option which means that the customers do not have to register to buy the products.
- Allow customers to bookmark their shopping carts so that they can resume shopping at a later time.
Customer Acquisition Cost
Customer Acquisition Cost are the expenses concerning getting customers, and this is done by dividing total marketing expenses by the number of new clients within a given time period. This helps your company check if its marketing strategies are efficient enough or whether it should continue spending money on it or not because returns from it are justifiable.
As stated by FirstPageSage, consumer ecommerce, and retail have the lowest customer acquisition costs (CAC) among 17 surveyed industries. The average organic CAC in the online retail sector is around $87, while the inorganic CAC is approximately $81.
This indicates that furniture retailers, within the broader retail sector, generally find it easier and more cost-effective to acquire customers compared to other industries.
How to improve?
There are various means of reducing the costs of acquiring new clients and enhancing profitability. For instance, one could eliminate ineffective ads in newspapers and allocate such funds to highly rated campaigns on social media platforms under commerce website development. Consequently, you will be able to attract more customers with the same amount of money thereby reducing your cost of acquiring them.
Customer Lifetime Value
Customer Lifetime Value is an estimate of how much revenue will come from when one customer stays loyal to your business throughout their entire life together with you. The calculation formula includes multiplying the average buying amount by times the average purchase frequency and average customer lifespan. CLV allows you to figure out more about what acquiring customers means for the future as well as retaining them to create loyalty programs.
How to improve?
By generating chances for more transactions, you can boost each customer’s lifetime worth. Keep in touch with past clients through exclusive promotions and create loyalty schemes that encourage repeat buying. Cultivate connections by sending them birthday discounts or calling them to see how they liked what they bought.
Email Marketing
Email marketing service is an extremely effective advertising strategy for furniture retailers. It is essential to monitor your email subscriber lists regularly. Tracking the subscription and unsubscription rates can help you find potential problems.
For example, a high unsubscribe rate indicates that your emails are not reaching the appropriate audience. On the contrary, an increase in subscriptions after a blog post shows that the readers had a good connection with the content.
In 2020, the average email open rate was 18%, but for retail, it only dropped down to 12.60%, according to Campaign Monitor. The average unsubscribe rate generally was 0.1% while that of retail alone was 0.00%. Furniture retailers should concentrate on creating interesting subject lines for their emails to increase their open rates.
How to improve?
When doing email marketing optimization of an ecommerce furniture development, look at split testing different subject headings, open rates, and click-through ratios. Discontinue low-performing campaigns and devote more time and resources to those that perform correctly. Use interesting subject lines such as hinting at discounts or exclusive offers just for subscribers to lure in your readers’ attention.
Keep an Eye on Your KPIs!
For businesses to continuously boost ecommerce furniture sales, it is essential to always keep an eye on the right eCommerce KPIs for continuing growth and profit. With careful attention paid to the critical metrics, furniture ecommerce can see how their businesses are faring and what drives consumer decisions.
These KPIs are not mere figures; they serve as potent resources for making strategic choices, adjusting promotion methods, and improving customer satisfaction overall. By constantly tracking and adjusting these vital statistics, furniture vendors can respond productively to changes in clientele’s wants over time.