Online Grocery KPIs: Learn the 8 Metrics That Matter

Online Grocery KPIs: Learn the 8 Metrics That Matter

With net profit sitting at around 1-2% (standard for grocery stores), you’re already faced with the challenge of maintaining a sustainable business model.

But with the demand for online and curbside pick-up options pushing you into partnerships with omnichannel services like Instacart and Doordash—or maybe even towards building your own online fulfillment solutions—key performance indicators (KPIs) are changing.

In this article, we cover the key online grocery KPIs for online grocery ordering and for measuring whether your software and infrastructure help support your business growth.

So what are the most important grocery KPIs?

  1. Revenue per visitor
  2. Average order volume and basket size
  3. Ecommerce contribution to total orders and revenue
  4. Pick rate and time to fulfillment
  5. Fulfillment cost per order
  6. Profit
  7. Inventory

How are ecommerce grocery KPIs different from in-store metrics?

Despite the fact that BOPIS drives $100B in sales in the US alone (with double-digit annual growth for the foreseeable future), the infrastructure for your store to fulfill online grocery orders may cost more than it’s worth. 

In a previous article, we shared how to align your fulfillment model with the stage of your online order volume.

But you can’t choose a viable solution without being able to measure the success of your omnichannel fulfillment plan. While many metrics are similar to what you might measure in-store, others are specific to ecommerce alone due to the different shopping experience and the resources involved in bringing groceries to shoppers (instead of shoppers into stores). 

First you need the right retail performance metrics.

Online Grocery KPI #1: Revenue per Visitor

Revenue per Visitor (RPV) is the average value of all the items within each visitor’s order. To calculate, you’d divide your total revenue for a set period by the number of site visitors during that same set period, whether they converted or not.

How to calculate Revenue per Visitor, a key grocery KPI

RPV is a good grocery KPI to follow because it gives you a general view of your grocery site and overall shopping experience. 

Some reasons for a dip in RPV might be fulfillment experience, like too many items out of stock, expensive delivery options, or not enough time slots available for BOPIS. If you’re seeing a decrease in this metric, you’ll want to investigate whether the leak is in average order volume (the size of each customer’s basket) or in the conversion rate. If it’s the conversion rate, at what point are shoppers abandoning their sessions? 

One way to impact RPV is to make changes to your website or product discovery platform. If a shopper searches for “butter” but the first products to pop up are all peanut butter, that could prompt a would-be customer to head to a different site, lowering your RPV. 

A product discovery platform that uses machine learning and natural language processing can learn that when a customer types “butter” they’re looking for the dairy product. You’re more likely to convert that customer by helping them find items more easily—and raise your RPV in the process. ro

Grocery KPI #2: Average Order Volume and Basket Size

Basket size is the average number of items in each shopper’s cart. Average Order Volume (AOV) of delivery and BOPIS orders is calculated by dividing total revenue by number of orders, rather than number of visitors.

Both of these numbers indicate how large the average order is, either by value or by sales.

How to calculate average order volume as a grocery KPI

Yes, in the previous section we argue that RPV is better to measure than AOV when you’re looking at overall site health.

But when you’re trying to determine trends in order volume over time or evaluate if upsells or optimizations are working incrementally for people who are already buying, this metric gives you a great overview. 

Say, for instance, you’ve optimized your discovery platform for more personalization. You’re upselling items that may go together. When your customer adds peanut butter to their basket, your discovery platform automatically suggests jelly to go with it. Over time, this sort of optimization increases your AOV and your basket size—and your RPV as well. 

Online Grocery KPI #3: Ecommerce Contribution to Transactions and Revenue

Just before the pandemic—in 2019—grocery sales via delivery hovered around 5.4% of total revenue. By 2021, ecommerce grocery sales accounted for 9.5% of total grocery sales and are projected to reach 20.5% by 2026. 

Essentially, you can’t just measure your total revenue or average order volume and expect to gain a full picture of your company’s online success. 

Instead, compare your BOPIS and delivery orders to in-store transactions and revenue. Are they trending toward a larger percentage of your total orders, or are they decreasing?

While the overall trend is growth in ecommerce grocery sales, that doesn’t mean its value is automatically guaranteed for your store or your market.

If your ecommerce growth isn’t on trend with the market average, that could be a sign that something’s amiss. Perhaps your local market isn’t as enthusiastic about BOPIS or delivery, or maybe your online experience leaves a lot to be desired compared to your brick-and-mortar storefront.

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Online Grocery KPI #4: Pick Rate and Time to Fulfillment

Whether you’re using third-party vendors in-store, your own employees, or a micro-fulfillment center (or “dark store”), lead time (or time to fulfillment) is one of the few key retail metrics that most grocery chains struggle with even after optimization. 


It’s a store metric that’s so closely tied to the customer experience, and there are so few ways to optimize for it. 

One of the factors in time to fulfillment is pick rate: how quickly the employees in your store can physically fulfill orders for pickup or delivery. If your order volume is relatively low and you can fulfill in-house, you can speed up picking speed with automation tools that guide pickers through sections of the store. These tools consolidate orders to keep pickers from running around. You’ll also likely have most items in store, so it won’t be as challenging to fill the entire order quickly.

Pick rate is a grocery metric that impacts time to fulfillment

But as micro-fulfilment centers—both store-owned and third-party—become a more prominent fixture in order fulfillment, time to fulfillment is harder to control. 

Many grocers find that not every MFC can fulfill 100% of every order. 

This means that some orders are filled to a certain extent by the MFC, then shipped to the store for completion.

It doesn’t matter, in this case, what your pick rates are. You’re still delaying time to fulfillment out of the need to ship the order to the store and continue fulfillment in-house. 

A long time to fulfillment will naturally impact customer satisfaction, ultimately impacting sales. To avoid that impact, you have to consistently measure and seek long-term solutions for reducing lead time.

Grocery KPI #5: Fulfillment Cost per Order

Fulfillment cost per order (CPO) is the sum of all costs associated with fulfilling online (and in-store) orders divided by the total number of orders. This includes:

  • Receiving goods
  • Inventory management
  • Item storage (including facility and occupancy costs)
  • Packing (including packing materials)
  • Picking
  • Delivery
  • Sales returns (reverse logistics)

Labor has traditionally been the only cost measured in CPO calculations, but this is hardly the full cost of fulfillment.

Fulfillment cost per order is an ecommerce grocery KPI

Today, you have to look at how many resources are dedicated to filling an order. Even if you’re working with omnichannel solutions—and have partnerships in which the costs are passed to consumers through markup on goods sold—there may be additional costs to consider.

For example, there may be last-mile fulfillment needed for items not stored at your MFC, and any costs related to that MFC. 

Grocery KPI #6: Net Profit

Profit will always be a key supermarket metric, just as it is with any business. But what makes it unique to grocers as a KPI is that tight margin of 1-2%, and how it fares when you bring online orders into the fold. 

Are your new fulfillment costs appropriately balanced by an increase in revenue?

If you’re at the start of online order fulfillment, compare the new store or order revenue with historical data from your traditional store and region. 

For established stores and online order fulfillment solutions, be sure to factor in changes in sales brought on by the competitive nature of this landscape. Did other stores in the area introduce new fulfillment solutions? Did they introduce new delivery options you haven’t caught onto yet? Were they able to speed up lead time by hours? 

Essentially, your net profit may hover at 1-2% margin with largely fixed costs, but if you’re not continually monitoring that margin and the factors influencing it—as well as investing in new ways to drive sales and the costs of driving those sales—you could face the lower end of that range.

Online Grocery KPIs #7 and #8: Inventory Stock Rate and Shrink Rate

For most stores, inventory purchased digitally still comes from in-store stock. If you’re not paying attention to stock rate and inventory levels, you’re likely to run into a few problems. This is particularly the case if your discovery platform isn’t intuitive enough to take your inventory into account or if you haven’t optimized your product catalog

Stock rate is a grocery KPI that tells you how many items can be fulfilled in each order

It’s not just that you’ll run into possible shortages for in-store shoppers, or that online shoppers will have to be compensated or given a comparable option to the items they’ve purchased (which isn’t always possible). 

But inaccurate inventory levels also impact your revenue and product storage resources. 

Items you can’t turn over fast enough may spoil before sale, or take up precious space that could be used to house more lucrative products. 

Unless there’s economic inflation, or you’re changing the layout or square footage of your store, inventory levels really shouldn’t change year to year. 

For reference, the average turnover ratio for a mid-size store is 14.7

If grocery store inventory turnover does change, it could be an indicator that:

  • A product is rising or falling in popularity or seasonality
  • The costs of goods in your store aren’t competitive
  • Marketing or customer experience is poor or declining
  • There are new factors impacting inventory shrink

Inventory Shrink

Inventory shrink occurs when inventory levels are lower than what’s accounted for. It happens for a number of reasons, from shoplifting, shipping damages, and human accounting errors to lack of accuracy in inventory management systems and even vendor fraud.

Someone could be in your store adding every box of Cheerios to their cart, while someone online is also ordering a few boxes. 

You may run out of stock before you even have a chance to reserve more, and you’ll still have to supply substitutions for online orders. 

What happens if you don’t track inventory shrink?

Again, if you’re not tracking shrink (and inventory levels) with accuracy, your shoppers—both online and in-store—may miss out on products they’re expecting to purchase. Online shoppers may actually purchase items while they’re out of stock. They may get substitutions without notice, leaving them disgruntled and less eager to order again. You may also face accounting and tax issues, loss of product, and losses in revenue.

Calculating inventory shrinkage

You should have inventory shrink goals of 1% of sales, at a maximum, while aiming for less by focusing on all aspects of shrink that you can control (such as using a more intuitive discovery platform).

Shrink rate

When grocery retailers monitor stock turns and inventory closely, it’s far easier to optimize for a greater percentage of sales.

  • If you notice your ratio is too high for a certain product, you may need to increase purchase frequency or units ordered. Having it in stock continuously means greater customer satisfaction and possibly an increase in the number of transactions. 
  • You’re more likely to avoid stockout by scheduling inventory turnover over time. The trends may indicate which items sell more during particular seasons. 
  • You can upsell particular items depending on how well they sell, or based on seasonality of the product(s), by giving them greater real estate in the store.

Surface Grocery KPI Optimization Opportunities

After you’ve measured all of these key grocery KPIs, and have identified possibilities for optimization, turn to your ecommerce tech stack.

AI solutions can optimize your backend inventory management to meet your basket size and RPV standards, while showing accurate inventory and purchases at each individual store. 

Machine learning and clickstream data can add personalization to the customer experience, surfacing the most relevant and popular items for the individual while burying out-of-stock items. 

You have slim margins, and traditionally there wasn’t much you could do about it. But by measuring the right KPIs and applying the right solutions you have more control over your revenue streams. 

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