What are the important metrics a PM for a luxury goods eCommerce website should look at?

Clarifying questions:

• What kind of luxury goods does this ecommerce website sell? (Mostly beauty / fragrance products)
• Is this the only category of products?
• Does this website sell other products as well (normal priced)? No
• Do you have a website or an app as well? Just a website
• Is it operating on a D2C model? Yes we are selling our own products, not sourced from any other luxury brand.
• Are your products available on other e-commerce retailers like Amazon/ Flipkart/ Nykaa etc. No
• Where is this website operating? India
• What does the entire user funnel look like on the website? (user signs up/ logs in, homepage with various categories and sub-categories etc, catalog page for the selected category, PDP page with customer reviews, price, product description / images etc, cart page, checkout etc?
• What is the end goal that we are trying to achieve over here so that accordingly I can look at the metrics? (being a new brand in the market we are mostly looking at adoption & engagement boosting)

Goal:

Being an early stage product our end goal is to boost adoption & engagement:

Adoption: Making sure that enough people are discovering our product

Engagement: making sure that enough people are performing a core action on our product.

For any e-commerce website: core action → purchasing products / conversion , adding to cart / wishlisting (intent of buying)

Actions:

Adoption:

• user would discover the website via 3 different channels : social media page / organic / referral (word of mouth)
• user would land on the website, create an account / activate an account

Engagement:

• user lands on the homepage and checks out various categories / sub-categories available/ offers / banner listings etc.
• user can also search for a specific product/ category etc.
• user would select a specific category and land on the catalog page
• user can apply filters to refine their search basis subcategory, price range, user needs (skin type, makeup/ skincare etc)
• user will select a product and land on the PDP page with description, price, offer, customer reviews etc.
• user can add the product to cart / wishlist
• user will go to cart page and add coupon / offer if applicable
• user will checkout (add necessary details like mobile number, address, email etc.) can save these details as well
• user will complete payment

Anywhere from the above funnel the user can churn.

Metrics:

Adoption:

• Number of users coming on the website from different channels (organic, referral, social media)
• Average amount of referral cash earn & burn (monthly)

Engagement:

• Most searched products / category / ssub-category etc.
• Most applied filters on the catalog page (For eg: price buckets / which user need is the highest)
• No. of products added to wishlists which are then added to cart (monthly)
• No. of products added to cart which are then converting into fulfilled orders. (weekly) / cart abandonment rate / churn rate
• ATV of the products purchased (price propensity of the people)
• No. of products per order
• Average frequency of purchase
• Total number of orders that are falling into success / failed / pending state (weekly)

Evaluate:

• Being a D2C brand we need to identify which acquisition channels are working the best for us.
• Being a new name in the market, it is important for us to track which products/ categories are in demand, this would help us target our users better when it comes to marketing communications / giving offers / promos etc.
• As we are a luxury ecommerce platform our product prices are higher and operating in a very price sensitive market so we need to look at user intent when they buy (How many people are adding products to cart and then not completing purchases, frequency of purchase, volume play or margin play?
• Basic sanity check of the payment and checkout process how many orders are failing, why are they failing (Payment gateways not working, technical issue with our offer / coupon engine/ payment modes not working) (imperative for every e-commerce website.

What are the important metrics a PM for a luxury goods eCommerce website should look at?

Thank you for the question. Let me take a few seconds to gather my thoughts.

Let me start with some clarification questions first - 

1/ Can u tell me more about this eComm site on luxury goods? Specifically - what are we selling, what is the selling cycle, who are the sellers, who are the buyers?

Lets say high end watches

Buyers are  high end customers wanting to buy watches, repeat customers are low, sales are few but high ticket price

Sellers are any other owners, luxury brands

2/ What is the goal of this site? Is it sales(revenue), repeat customers, reduction in returns, increase in inventory?

Sales

3/ Where is this site located? US? World wide? US

Thank you for this information. Let me lay down the structure of my answer and walk u thru that

1/ Users

2/ Use case

3/ Journey along the use case

4/ Metrics along each step of the journey

5/ Highlight metrics that are of high importance and relate to the goal

6/ Summary

So lets dive into each of these

1/ Users

Type 1: Buyers -> they want to buy high end watches

Type 2: Private sellers -> they want to sell their high end watches

Type 3: Luxury brand sellers -> they want to create a online sales channel

Type 4: Curators -> they curate the items sold by private sellers to make sure they are genuine luxury brands

2/ Use case

Type 1: Buyers -> Interested in buying a luxury brand watch and buy one

Type 2: Private sellers -> Interested in selling their watches 

Type 3: Luxury brand sellers -> Interested in creating a sales channel (online)

Type 4: Curators -> Make money via curating watches

3/ Journey and metrics

Type 1: Buyers -> 

• Come to the site directly or via SEO/SEM

  • Metrics - # of visitors from different channels -  SECOND LEVEL IMPORTANT

  • Metrics - Drop offs - SECOND LEVEL IMPORTANT

• Search for the item with name or features or price

  • Metrics - # of visitors doing searches - SECOND LEVEL IMPORTANT

  • Metrics - # of searches done per visitors - SECOND LEVEL IMPORTANT

  • Metrics - Drop offs - SECOND LEVEL IMPORTANT

• View the item (images, video), read details on the product, interact with the seller, view curation report, view reviews on the seller

  • Metrics - # of visitors doing dive dive - accessing literature, videos, images

  • Metrics - # of visitors posting questions

  • Metrics - Drop offs

• Add watch(es) to cart

  • Metrics - # of visitors adding watch to a cart, average cart price - SECOND LEVEL IMPORTANT

  • Metrics - Drop offs - SECOND LEVEL IMPORTANT

• Check out and pay

  • Metrics - # of visitors doing purchases

  • Metrics - Total sales per visitor and overall - MOST IMPORTANT

• Track delivery

  • Metrics - # of on-time delivery

• See funds getting deducted from their pay channel

• Receive the product

  • Metrics - # of products delivered safely 

  • Metrics - # of products damaged in delivery

• Review it

  • Metrics - # of reviews left by buyers

  • Metrics - # of reviews left per watch

• Return if not like it else keep it

  • Metrics - # of buyers returning products - SECOND LEVEL IMPORTANT

  • Metrics - # of sellers whose products are returned - SECOND LEVEL IMPORTANT

  • Metrics - # returns per sku - SECOND LEVEL IMPORTANT

  • Metrics - loss in revenue due to returns  - MOST IMPORTANT

Type 2/3: Sellers/Private sellers ->

• Come to the site directly or via SEO/SEM

  • # of sellers on a product - SECOND LEVEL IMPORTANT

• List their product on the seller portal of the site

  • # of skus listed per seller - SECOND LEVEL IMPORTANT

  • # of items/sku listed - SECOND LEVEL IMPORTANT

• Send in their product to get it curated and rated

  • # of items curated as good/sku

• Take it back or leave it with us for us to sell it for them

• Interact with the buyer if they have any questions

  • # of interactions per seller per potential buyer

• Set up bank account with us to deliver their funds when a product is sold

• Once the product is sold, update the inventory (if sold by us)

  • # of items/sku sold per seller

• Once product is sold, ship it to the buyer

  • # of ontime shipments done

Type 4: Curators (not gonna dive into them)

• Sign with the site for being a curator, submit credentials that confirm they being genuine curators

• Come into our local holding center to curate items once or twice a week

• Get a payment on monthly basis

Summary -

Important metrics from a buyer journey are

1/ total sales in a given time period

2/ total sales returned in a given time period

Support metrics

1/ Funnet and drop off in the given time period

Important metrics from a seller journey - 

1/ # of sellers listed

2/ # of products listed per seller

3/ # of listed products curated as good to sell

Clarification

1. What kind of luxury goods?

Assumption- Like apprarel, watches, bag, makeup items

2. Geography- India and developed countries
3. Does this ecommerce site has stores as well? - No

Describe the product

The ecom site helps the users to save their precious time and get the genuine products at a relatively lower price at their door step. People can even send the gifts directly from the site to the respective person. All the brands are available under one roof. Hence, there is no need to visit the stores of each brand. All the major cards are accepted for the payment and easy return makes the ecom site better from user experience stand point.

User segment

1. Frequent buyers
2. Occasional buyers
3.  Sellers
4. Delivery agents

Goal of the product is to generate revenue

User Journey

User register in the application

User login thru the credentials

User search about the desired product

User wishlist a range of products

User adds them in the buying list

User add the shipping address

User makes the payment and close the transaction

Metrics

1. Average number of sales happens in a day by the unique users just after 15 mins of registration
2. % increase in the sales by daily active users every month
3. Average number of users cancelling the orders and not rebooking the same just after 24 hours of 1st booking
4. % increase of users asking for the refund and return after receiving the product
5. Average number of users asking for the product replacement instead of cancellation and refund
6. Average number of users who is referring the site to another user
7. % increase in the size of the transactions by a user on monthly basis
8.  Rate of repurchase the product by a user
9. % increase in the daily active users just in the 15 mins of registration
10. Average Time spent by the users on the site everyday and the number of times the user reaching to the stage of payment

Evaluation

Since the goal of the product is to increase the revenue and to ensure that the customer base should increase day by day.

For any ecommerce store, I think it's first important to understand where the website is in their journey. Have they newly launched? Are they crossing the chasm into the growth phase? Do they already have a loyal user base and now are trying to expand? 

Let's assume they are in the newly launched phase. Some ecommerce metrics I would track are: 

Acquisition: 

• Number of inbound leads (for a luxury site especially, word of mouth and influencer recommendations are important)
• Bounce rate 
• Number of email signups

• Number of completed registrations 
• Average click through rate 
• Number of adds to cart 

• Conversion rate
• Number of repeat visits
• Number of repeat purchases

• Revenue
• Profits
• Gross Merchandise Value
• Average Order Value
• Average Basket Size

Luxury goods ecommerce website is basically an online way for a luxury goods brand to sell its product. For this purpose, I will assume that the store already has offline presence and this is another channel for them to sell, and that the user is probably a wealthier user that already owns luxury goods

The goal for this is monetization as the merchant would like to make money and sell their product and retention as it’s a leading indicator of monetization.

Looking at the customer journey we can find metrics that impact the different levels of the journey:

Awareness:

# customers that view facebook add / google ads / blog posts

# influencer marketing initiatives

Acquisition:

CTR – click through rate per add type

CPA per add type

# new landing page views and % growth

% organic users and type

% paid users and type

Activation:

# newsletter sign ups per month and % growth

# blog sign ups per month and % growth

Engagement:

Email CTR rate

Avg session length 10+ sec or 2+ page views or 2+ clicks

# pages visited per session

Top products visited

# views per product / # images per product / # reviews viewed per product

Avg support chats per user

Retention:

% users who repurchase

Frequency of repurchase

Product return rates

Distribution of user reviews

Distribution of User reviews per product

Checkout drop off rate

Monetization:

MRR à monthly recurring revenue online vs offine and % growth

Avg # of items per checkout

Avg $ per cart

Avg $ per user

# items sold per month

Online sales per geographic location

Referral:

% users that refer

% referrals that convert

Technical:

Avg time for page download

Since the purpose is monetization, and in terms of relevance, confidence, ease and impact to user, I would look at the following metrics that would lead to this monetization piece:

CTR – click through rate per add type

% users who repurchase

Product return rates

MRR à monthly recurring revenue online vs offine and % growth

Avg revenue per user

# items sold per month

Summary: The product is a luxury brand ecommerce site that is wanting to generate revenue and monetize the business. We looked at the metrics that would have the most impact on monetization directly and indirectly.

As a 1st step, I will try to understand whether the PM is responsible for growth or revenue. Let's say this case is about a PM who is not worried about acquisition. Since this a luxury goods portal, I expect following about consumer behavior and revenue model:

1. Avg users will not make frequent purchases (Reasons: less # of affluent people, more competition, aspirational users will make less frequent purchases.)
2. Average margin per sale will be higher

1. % change in active shoppers per quarter
2.  % change in # of transactions per user per quarter