Startup fashion brands are often so focused on trying to get sales and looking at marketing strategies that they lose sight of the various metrics that go along with that. With proper analysis, these metrics of your brand’s Shopify Platform can make a huge impact and generate sales over time.
While most clothing startups are familiar with things like customer lifetime value and understanding the performance of that customer, what are the key metrics to know if you are already on track? Here are the 7 KPIs that will help you drive home performance for your business and measure your Shopify E-Commerce store.
Most clothing startups know that Shopify provides absolute visibility into many different kinds of metrics. But when you open up your analytics in your dashboard, what should you be looking at first?
Traffic is one of the primary components we recommend starting with to see how things are performing. “Traffic” means how many users are coming to your site, and the different channels that they’re coming from.
This is a fantastic metric to understand. For example, is Instagram bringing in a lot of your business, or is it Pinterest, or perhaps even your email marketing newsletter? Traffic is the number one place to look when it comes to figuring out where your customers are coming from and where they are converting.
When you’re reviewing KPIs, startup fashion brands must look at conversion, which is another increasingly important metric. Yes, it matters where your traffic is coming from, but even more, it matters how people are purchasing through those different channels.
Here’s an example: Imagine that a thousand people are coming through to your site from Instagram, but only 10 of those people convert. This conversion is quite low if compared to only 25 people coming in through the newsletter, but all 25 of those people converting and making a sale.
When clothing startups look at conversion metrics, it is crucial to understand who is actually purchasing. While traffic looks at the sheer amount of volume, conversion reveals the strength and quality of that traffic, and who is converting to make a purchase.
3. Repeat Customers
Continuing along the customer journey, when it comes to things like conversion, you might ask yourself, “Well, where am I getting the most conversions from?”
Aside from traffic, the next vital metric to consider is repeat customers vs. returning customers and new customers. Repeat customers are coming back and purchasing from you every month and with every new collection. And that customer lifetime value is quite high.
If you have repeat customers already in your business, looking at how to maximize them through a variety of other strategies is essential for them to convert even higher. This means that your repeat customers should receive a different kind of email marketing cadence. Startup fashion brands should also be looking at retargeting those audiences through digital advertising.
4. First-Time Customers
Startup fashion brands can learn a lot from this metric. First-time customers will often buy just one product. If their customer journey is not fulfilling for them, or if they don’t like the product, they may even spread negative word of mouth about your business and drive down the strength of potential sales profitability.
Obviously, for new clothing startups, the first 90% of customers will be first-time customers. Over time, you will start to see the shift move to 50% repeat and 50% new customers. And then over more time, ideally you will see repeat business shifting at a much higher rate.
5. Average Order Value
When a customer comes onto your site, what are your expectations for an average order value? Are you expecting it to be something like $300? Will an average order value be closer to $100? How do you even begin to understand what that will look like?
First, the answer will come from the products that you are selling, and the average units you expect to sell. Is the goal to sell a customer two or three items in a collection, or to sell one high-ticket product? An excellent place to begin is to set your metrics for an average order value based on the units that you’re looking to sell or based on how you’re trying to upsell a customer over their journey.
6. Return Rates
Returns can be a scary word for many new startup fashion brands, but that doesn’t mean they should be ignored. When starting out, many clothing startups are so focused on sales that they don’t take a look at what happens at the end of the customer cycle.
Consider if your business did $100,000 this month—that’s great! But, if the return rate was 40%, the $100,000 quickly becomes less meaningful. This is a huge difference when you’re looking at the gross versus the net of your business.
At the end of each month, you have the opportunity to leverage your returns and improve the product customer journey, product development, and consider important details: Are customers buying multiples of one size or one product in multiple sizes? How are people actually shopping and navigating your site? You might learn that better product descriptions are needed to help customers along their journey, or perhaps those metrics might signal a need for better customer service or a chat bot on the site. While they can be scary, when measured and harnessed correctly, return rates will be an excellent metric for growth and development.
7. Abandoned Carts
In tandem with return rates are abandoned cart rates. “Abandoned cart” describes when a customer adds a product to their cart and leaves the site. It’s important to track these customers and harness the power of Facebook and Google Pixel to retarget these customers at a different cadence in your marketing efforts. Why? A person who puts a product into their basket is more likely to repeat the purchase and come back if you are following up with the right marketing assets.
In this scenario, many clothing startups fall short when they let abandoned carts fall by the wayside or just send a standard, automated “Hey, you left this product in your cart,” email. Today’s consumers are too savvy—they expect you to chase them around a bit and coax them to return. So, if your business doesn’t chase them with the product, you will fall short on that expected customer experience. To avoid missing out on the sale, take a close, monthly look at your abandoned carts to drive your marketing efforts.
For more information on how to understand Shopify analytics, complete with tutorials, screenshots, and an in-depth analysis on how to look at your business on a monthly basis, make sure to download our e-book and take a look at “Creating Fashion Websites That Sell,” a step-by-step guide to reviewing About pages, Product pages, and virtually the entire customer journey for your website.