Skip to content

Ecommerce Benchmarking: What is it, Tools and Best Practices

Ecommerce Benchmarking What is it, Tools and Best Practices

For any ecommerce business, staying ahead of the competition and continuously improving performance is crucial. This is where ecommerce benchmarking plays an important role, offering valuable insights and comparisons that can drive strategic decision-making and enhance overall success. 

In this guide, we will explore the concept of ecommerce benchmarking, its significance, methodologies, and tools used. We will also take a look at best practices that can be applied in the benchmarking process, in order to achieve maximum success.

Contents

What is benchmarking in ecommerce?

Benchmarking in ecommerce refers to the process of comparing and analyzing key performance indicators (KPIs) and metrics of an online store with those of other businesses, industry leaders, or best practices. This practice helps ecommerce businesses identify areas of improvement, optimize operations, and stay competitive in the market.

In ecommerce benchmarking, various metrics are used to measure performance. Here are some prime examples:

  • Conversion rate: The percentage of website visitors who make a purchase.
  • Average order value (AOV): The average amount spent per order.
  • Customer retention rate: The percentage of customers who return for repeat purchases.
  • Website speed: The time it takes for a website and its elements to load.

In the next section, we take a look at the benefits of ecommerce benchmarking.

Why is benchmarking important for your online store?

Benchmarking is a crucial component of any ecommerce strategy.. By tracking and analyzing benchmarking metrics, business owners can gain valuable insights and take subsequent actions to improve their online store performance. Here are some of the benefits of benchmarking:

Identify areas for improvement: Benchmarking helps identify areas where an online store is lagging behind, allowing for targeted improvements and optimization.

Enhance customer experience: Benchmarking customer retention rates and other metrics helps ecommerce businesses understand customer needs and preferences, leading to improved customer satisfaction and loyalty.

Optimize operations: By analyzing metrics such as conversion rates and website speed, ecommerce businesses can streamline operations, reduce costs, and increase efficiency.

Drive marketing strategies and growth: Benchmarking insights are crucial for driving strategic decisions, such as product offerings, campaigns, and pricing, leading to increased revenue and growth.

Stay competitive: By monitoring competitors’ performance, ecommerce businesses can stay ahead of the competition and adapt to changing market trends.

Benchmarking web performance with Valido AI
Benchmarking web performance with Valido AI

Types of benchmarking

In ecommerce, various types of benchmarking methodologies can be employed to compare performance and drive improvement. Understanding these different types can provide valuable insights into specific areas of an online store’s operations. Let’s take a look at the types of benchmarking commonly used by ecommerce businesses:

Internal benchmarking

Internal benchmarking involves comparing performance metrics within different departments or product lines of the same online store. Internal benchmarking helps identify areas of strength and weakness within the organization.

Competitive benchmarking 

This type involves comparing an online store’s performance metrics against direct competitors in the industry. Common benchmarks in web performance include page speed and Core Web Vitals metrics.

Functional benchmarking

Functional benchmarking focuses on comparing specific processes or functions within an online store with industry leaders or best practices. This type of benchmarking helps identify opportunities for process optimization and efficiency improvements.

Generic benchmarking 

Generic benchmarking involves comparing an online store’s performance against best practices in any industry. By looking outside the ecommerce sector, businesses can gain fresh perspectives and innovative ideas to implement in their operations.

Each of the above benchmarking types offers unique insights and benefits, enabling ecommerce businesses to tailor their strategies and operations accordingly for optimal performance.

How to benchmark your ecommerce

Benchmarking your ecommerce involves a systematic approach to comparing performance metrics, analyzing data, and deriving actionable insights to drive continuous improvement. We have listed down the key steps below on how to effectively benchmark your online store.

  1. Identifying key metrics and KPIs: Start by determining the key performance indicators (KPIs) and metrics that are most relevant to your ecommerce business. These could include conversion rate, average order value, customer retention rate, and website traffic.
  2. Collecting and analyzing data: Gather data from various sources such as Google Analytics, monitoring tools, and customer feedback. Analyze this data to understand trends, patterns, and areas for improvement.
  3. Comparing performance: Compare your ecommerce metrics against industry benchmarks, competitors, and your own historical data. This comparison will help you identify areas where your online store excels and areas that need attention.
  4. Developing strategies for improvement: Based on the insights gained from benchmarking, you are now ready to develop strategies to address weaknesses in your online business and optimize operations. This could involve refining marketing campaigns, improving your website UI/UX design, or enhancing customer service.

Start monitoring your page speed for free.

Leverage our AI-powered features to analyze and track your ecommerce performance, just by entering the site URL below.

Ecommerce benchmarking tools

Benchmarking tools play a vital role in simplifying the process and providing actionable insights for online businesses. These tools offer a range of features and capabilities to help ecommerce entrepreneurs track performance, analyze data, and make informed decisions.

Google Analytics: A powerful tool for tracking website traffic, user behavior, and conversion rates. Google Analytics provides valuable insights into website performance and user engagement.

Valido AI: Valido AI is an intelligent test automation and monitoring tool for ecommerce with benchmarking capabilities. This tool allows you to benchmark important web performance metrics such as Core Web Vitals, accessibility and SEO scores against competing online stores. You can also analyze your performance for a single market or across multiple geographical locations.

SEMrush: A SEO-focused marketing toolkit that offers competitive analysis, keyword research, and other SEO insights..

Ahrefs: A comprehensive SEO tool that allows businesses to analyze backlinks, keywords, and content performance. Ahrefs helps ecommerce stores improve their search engine rankings and visibility.

Best practices for ecommerce benchmarking

To maximize the effectiveness of benchmarking and drive meaningful results for your online store, it is essential to follow best practices that align with your business goals. We’ve compiled key best practices to consider when implementing benchmarking for your ecommerce:

  1. Regularly monitoring and updating benchmarks: You should keep track of key performance metrics and benchmarks on a consistent basis to ensure that you are staying on target and adapting to changes in the market.
  2. Aligning efforts with your business: Ensure that your benchmarking activities are aligned with your business objectives and strategies. This alignment will help you focus on areas that directly impact your bottom line.
  3. Communicating benchmarking results to stakeholders: Share benchmarking insights and results with relevant stakeholders within your organization. This transparency fosters collaboration and ensures that everyone is on the same page regarding performance metrics and improvement strategies.
  4. Continuous improvement based on benchmarking insights: Use the insights gained from benchmarking to drive continuous improvement in your ecommerce operations. Implement changes, test new strategies, and monitor the impact on key metrics to optimize performance over time.

Final thoughts

Ecommerce benchmarking is a vital strategy for online businesses to optimize performance, identify areas for improvement, and drive growth. Valido AI offers a powerful solution for ecommerce store owners, providing comprehensive benchmarking capabilities across web performance metrics such as Google Web Vitals scores, accessibility, best practices, and SEO. By leveraging Valido AI, online businesses can gain actionable insights to improve user experience, increase conversions, and achieve long-term success in the competitive ecommerce landscape.

Ready to take your ecommerce performance to the next level?

Measure and optimize critical web metrics with Valido Web Score, the leading test automation and monitoring solution powered by AI. Sign up today to start improving your ecommerce performance and conversions.