How to benchmark your store against industry standards

Your metrics mean nothing without context

A 2% conversion rate—is that good or bad? A 35% gross margin—strong or weak? Customer acquisition cost of $25—sustainable or too high? Without benchmarks, you can’t interpret your own metrics. You don’t know whether to celebrate or worry.

Industry benchmarks provide the context that makes your metrics meaningful.

Why benchmarks matter

Benchmarks serve multiple purposes.

Performance assessment:

Benchmarks tell you whether your metrics represent good or poor performance. Being above benchmark suggests strength. Being below suggests opportunity for improvement.

Goal setting:

Benchmarks inform realistic targets. Aiming for conversion rate well above industry average is ambitious. Aiming for conversion rate at industry average might be achievable.

Problem identification:

Metrics significantly below benchmark often indicate problems worth investigating. If your return rate is 3x industry average, something is wrong.

The challenge with benchmarks

Good benchmarks are hard to find and use correctly.

Data scarcity:

Companies don’t publish their metrics. Benchmark data comes from aggregated surveys, platform reports, or industry associations—all with limitations.

Comparability issues:

Benchmarks aggregate diverse businesses. Your specific situation might not match the benchmark sample. A benchmark including enterprise retailers might not apply to a small DTC brand.

Outdated information:

Benchmarks from two years ago might not reflect current conditions. E-commerce changes quickly.

Where to find benchmarks

Several sources provide benchmark data.

E-commerce platform reports:

Shopify, BigCommerce, and other platforms occasionally publish benchmark data from their merchant base. These reflect real e-commerce performance.

Marketing platform benchmarks:

Google, Meta, and email platforms publish advertising and engagement benchmarks. Useful for marketing metrics specifically.

Industry reports:

Consulting firms and industry associations publish periodic benchmark reports. Often require purchase or membership but provide detailed data.

Peer networks:

Founder groups and industry communities sometimes share metrics informally. Real data from comparable businesses can be more relevant than published benchmarks.

Key metrics to benchmark

Focus benchmarking efforts on the most important metrics.

Conversion rate:

E-commerce conversion rates typically range from 1% to 4%, with significant variation by industry, traffic source, and business model. Mobile rates are typically lower than desktop.

Average order value:

AOV varies dramatically by category. Fashion might average $80-120. Furniture might average $500+. Consumables might average $40-60. Compare within your category.

Customer acquisition cost:

CAC varies by channel and category. Generally increasing across e-commerce as competition intensifies. Track relative to customer lifetime value, not just absolute number.

Return rate:

Apparel returns average 20-30%. Other categories are typically 5-15%. High return rates relative to category benchmark indicate product or description issues.

Email engagement:

Open rates typically 15-25%. Click rates 2-5%. Unsubscribe rates under 0.5%. Significant variation by industry and email type.

Adjusting benchmarks for your context

Raw benchmarks need interpretation for your specific situation.

Category adjustment:

General e-commerce benchmarks might not fit your category. Look for category-specific benchmarks when possible. A luxury brand shouldn’t compare conversion rate to a commodity seller.

Business model adjustment:

Subscription businesses have different metrics than one-time purchase businesses. B2B e-commerce differs from B2C. Match benchmark to model.

Stage adjustment:

New businesses typically underperform established ones. A two-year-old store shouldn’t expect metrics matching a ten-year-old competitor.

Traffic source consideration:

Conversion rates vary dramatically by traffic source. Paid social converts lower than branded search. Compare apples to apples.

Building internal benchmarks

Your own history often provides the best benchmarks.

Year-over-year comparison:

How does this month compare to the same month last year? This controls for seasonality and provides relevant comparison.

Period-over-period trends:

Is your conversion rate improving or declining? Trend direction often matters more than absolute benchmark comparison.

Best performance baseline:

What was your best month ever for this metric? Why? Can you replicate those conditions?

Segment-level benchmarking

Aggregate benchmarks can hide segment variation.

Channel-level benchmarks:

Benchmark conversion rate by traffic source. Email should convert higher than paid social. Direct should convert higher than display.

Device-level benchmarks:

Mobile typically converts lower than desktop. Benchmark each separately rather than blending.

Customer-level benchmarks:

New customers convert differently than returning customers. Benchmark each segment against appropriate standards.

Competitive benchmarking

Direct competitors provide relevant comparison points.

What you can observe:

Pricing, product range, marketing approach, customer reviews, shipping policies. These provide context even without seeing their metrics.

Estimated competitor metrics:

Tools exist to estimate competitor traffic and engagement. Take estimates with skepticism but use directionally.

Competitive intelligence:

Sometimes competitors discuss performance in press coverage, investor materials, or industry events. Gather what’s publicly available.

Using benchmarks for goal setting

Benchmarks inform realistic targets.

Gap to benchmark:

If your conversion rate is 1.5% and industry benchmark is 2.5%, closing that gap is a reasonable goal. It’s been done by others.

Exceeding benchmark:

Best-in-class performance exceeds benchmark. If benchmark is 2.5%, top performers might achieve 4%. Aim for top quartile, not just average.

Realistic timelines:

Reaching benchmark doesn’t happen overnight. Set incremental targets: reach industry average in 12 months, exceed it in 24 months.

When to ignore benchmarks

Benchmarks aren’t always the right standard.

Unique business models:

If your model is genuinely different, standard benchmarks might not apply. A custom furniture maker shouldn’t expect fast-fashion conversion rates.

Strategic choices:

You might intentionally underperform a benchmark for strategic reasons. Lower conversion rate but higher AOV might be your chosen trade-off.

Data quality concerns:

If benchmark data seems questionable or outdated, trust it less. Bad benchmarks mislead more than they help.

Tracking benchmark comparison over time

Regular benchmark comparison reveals progress.

Quarterly benchmark review:

Compare key metrics to benchmarks quarterly. Are you closing gaps? Opening new ones?

Benchmark trend tracking:

Benchmarks themselves change over time. Industry conversion rates, CAC, and other metrics evolve. Track benchmark trends alongside your own.

Benchmark metrics summary

Focus benchmarking on:

Conversion rate by channel and device. Average order value compared to category peers. Customer acquisition cost relative to LTV. Return rate versus category average. Email engagement metrics. Cart abandonment rate. Customer retention and repeat purchase rate.

Use benchmarks as context, not absolute standards. They tell you where you stand relative to others, helping you identify strengths to leverage and weaknesses to address. But your business is unique, and benchmarks are guides, not mandates.