Leading Indicators: Guide for Ecommerce Businesses (With Examples)

Nimbus clouds in the sky tell us it will rain. If we notice a friend has been hitting the gym three times a week for months, we know they’re likely to build muscle mass.

These events that let us peek into the future are called leading indicators. They’re all around us, and ecommerce is no different. By tracking the right data, you can spot future trends early, meet customer needs, and strengthen your position in the market. 

This guide helps you identify leading indicators so you can use this valuable data to build your business.

What is a leading indicator?

A leading indicator is a metric that can project the future performance of your business. In ecommerce, leading indicators can predict the success of your online store as a whole, as well as specific channels like email marketing, social media campaigns, product guides, and influencer collaborations.

For example, the number of email subscribers, opens, and clicks can give you an idea of the number of sales you’ll get in the next week from a specific email campaign. 

Leading vs. lagging vs. coincident indicators 

Businesses and economists group indicators into three groups: leading, coincident, and lagging. Each tells you something different about business performance.

• Leading indicators move ahead of outcomes and let you steer performance early.
• Coincident indicators move with real-time activity and confirm what’s happening now—for example, US retail sales and monthly GDP estimates.
• Lagging indicators trail after the fact and validate whether a completed strategy was successful.

How to use leading, coincident, and lagging indicators

What are the benefits of using leading indicator KPIs?

Leading KPIs help your ecommerce business take action before a campaign ends—without waiting to see final results.

Here’s the breakdown of that benefit:

1. Faster feedback on current efforts and inputs compared to lagging metrics

Experimenting with a new strategy? Fulfillment partner? Customer service tool? Thanks to leading indicators, you can learn how well it’s doing sooner.

For example, say you’ve updated the formula for subject lines in your back-in-stock emails. You can track the impact of that change in real time using open rates and click-through rates—rather than waiting until the end of the month to review total sales.

2. The chance to tweak your strategy and refocus your efforts while they’re still underway

That new subject line formula isn’t giving you the email opens you’ve expected? 

Create new subject lines and run A/B tests to see which one performs best and improve results before your email campaign is over.

What if an influencer’s post isn’t getting the reach you predicted, but it’s converting a high percentage of the people who do see it?

Then, boost the reach of that campaign through paid social media ads. The opportunity to adjust your path while you’re on it is a superpower.

3. Presents real-time company health

No matter the industry, employee motivation and engagement in organizations seem to jump through the roof when it’s time for acknowledgements and bonuses.

Those rewards usually depend on lagging metrics like revenue, profit, and market share.

You can bring leading metrics to regular check-ins with team members so they can see the impact of their work. Sharing leading indicators in regular meetings gives teams visibility and helps stakeholders stay up to date.

If you’re chasing a Q3 team sales goal, for example, don’t wait until the end of the quarter to see if you’ll get there. Have all of your associates take a look at their email open rates or new account signups as an indication of how likely their current efforts are to lead to the desired number of conversions. For more accurate forecasting, you can use Shopify analytics to see how past performance for different metrics correlates to sales figures. 

4. Acts as a macro radar

When the US Leading Economic Index (LEI) slipped 0.1 points in May 2025, economists began flagging a possible growth slowdown. Tracking predictive KPIs on the macro scale also helps brands to react more quickly than quarterly reports allow.

5. Gives proof points for investors 

The International Trade Administration projects global ecommerce sales will reach $5.1 trillion by 2026, with social commerce revenue in the US nearing $100 billion.

Tying those growth narratives to your own leading metrics (e.g., social-referral traffic, checkouts via social channels) gives stakeholders evidence that your strategy is aligned with where the market is heading. Their confidence in your forward-looking insights can help grow their support for your marketing budget and other strategic plans.

How to determine leading indicators

You can use specific leading indicators for short-term goals and campaigns, or as consistent metrics you regularly review in your business regardless of the current season.

The process of finding your leading indicators is the same in both cases:

1. Identify your goals and desired outcomes (lagging indicators)

As it relates to goals and desired outcomes, a lagging indicator shows an area on which to focus your efforts and test different strategies and tactics. For leading indicators, you’re looking for metrics that signal the progress toward your business’s intended outcome.

Let’s say your goal is to increase email-generated revenue by 10% in six months.

As you identify your goals and desired outcomes, compare revenue attributed to email marketing today to what it will be in six months. That’s a lagging metric that shows you whether you’ve hit the goal you’ve set.

2. Work backwards to identify preceding metrics

Using the example of an email campaign, you could list your real-time email metrics, including:

• Open rates
• Click-through rates
• Conversion rates from email
• Your subscriber count
• The number of emails you’re sending across different campaigns

Then, work backward to create specific metrics:

1. Write the outcome in one line. “Increase email revenue by 10% in six months.”
2. List the drivers that influence that outcome. Open rate, click-through rate (CTR), list growth, send volume, etc.
3. Attach one leading indicator to each driver. Weekly open rate, weekly net adds, weekly campaign count
4. Assign an owner and a review cadence for every indicator. If a metric slips, someone is accountable for adjusting the tactic that week.

Remember, lagging indicators measure your results once all the work has been done. With leading indicators, you can see what it takes to hit specific goals.

For example, if you know that around 10% of your email recipients end up making a purchase from a specific type of email, you can estimate the number of subscribers you need on your list to hit your revenue goal months down the line.

Leading indicators worth tracking

The metrics below tell you what’s coming long before your month-end reports. Check in on them every week, and you’ll have plenty of time to fine-tune campaigns, inventory, and customer experience.

Acquisition metrics

• Email open and click-through rates (CTR). This is how you know if leads are seeing your marketing message in the first place, and if it engages them enough to dig at least a little deeper (and closer to buying). A sudden dip could mean your subject lines or send times need a refresh.
• Ad cost per thousand impressions (CPM). How much are you spending to get eyes on your marketing efforts?Rising CPMs can destroy return on ad spend (ROAS before you have a chance to see the results in daily sales. When CPMs spike, shift budget to higher ROAS channels or refresh creative.
• List growth velocity. Looking at net new subscribers per week offers a forward look at how big your revenue pool will be next month.

On-site behavior

• Add-to-cart rate: Fewer sessions adding an item to cart usually point to inadequate product information or slow page speed.
• Cart abandonment rate. If more shoppers bail after adding to cart, review shipping costs, payment methods, or checkout UX. Shoppers are more likely to convert if it’s a fast and easy process. Average page-load time. Even a small delay can shave conversion rate within days. Keep your Core Web Vitals in the green. Laggy load times give them a good long pause to reconsider whether your product and your store are a good fit.

Operations

• Fulfillment lead time (order-to-ship hours): Even a slight uptick can trigger support tickets and bad reviews. For many of today’s customers, five days feels like a lifetime when it comes to getting something they want, when they decide they want it.
• Low-stock / out-of-stock alerts: A spike may mean demand is outrunning supply, and you need to place reorders fast. If these warning signs are coming in time to save you from the headache and revenue loss that comes with a stockout, you may need to take at your inventory management processes.
• Return-to-origin rate: These are products you sell and send out for delivery, that for some reason or other come back to you without ever reaching the customer. More bounced packages means later delivery dates and more customer complaints. Take a look at your shipping process and if necessary, consider using a third-party logistics provider (3PL) like the Shopify Fulfillment Network.

Customer sentiment

• Net promoter score (NPS): This key metric indicates how many customers would recommend your product. A two-point drop in rolling seven-day NPS often predicts a fall in repeat-purchase rate four to six weeks out.
• Return rate/reasons: Per June 2025 data from Statista, 55% of surveyed customers report having returned a product due to issues with quality, and more than half have returned an item due to a sizing issue. For the latter, review your sizing chart and how fits are described in product descriptions and in images on your site. For the former, review your suppliers and quality control measures.
• Customer satisfaction score (CSAT). Lower same-day CSAT scores hint at future churn. Once a customer leaves because they’re dissatisfied, it’s hard to get them to come back and make a purchase from your store.

Tracking and automation with Shopify

Stay on top of your leading indicators without having to deal with another cumbersome spreadsheet that’s always out of date, and prone to spawn different versions on different colleagues’ desktops. Shopify’s built-in dashboards surface the numbers—the right ones, always flowing from the same single source of truth—and Shopify Flow is always there to give you a nudge as soon as something drifts off course.

Using Shopify Analytics dashboards

• Start with the Analytics overview dashboard. Pin or reorder the widgets you care about (real-time sales, sessions, add-to-cart events) so they’re always the first thing you see.
• Need a deeper look? Switch to the default Behavior reports to track add-to-cart rate, onsite searches, and purchase rate over time.
• Inventory keeping you up at night? Build a quick Inventory report that flags any SKU once stock drops below your safety buffer, so you can reorder before you miss sales.

If you prefer to see Shopify analytics in person, check out this walkthrough. 

💡 For more advanced reporting needs, consider an analytics app from the Shopify App Store. 

Shopify Flow triggers

Shopify Flow helps you quickly act on leading indicators signalled from your analytics. The Flow template library offers hundreds of examples to catch demand swings, ops bottlenecks, marketing misses, and more. 

For example, if inventory is running low, you could create an automation to alert procurement in Slack:

Product variant inventory quantity changed → Condition: quantity < safety_stock → Action: Slack alert + draft PO.

If refunds are on the rise, you can warn the product team with this workflow:

Refund created → Condition: refund.amount > $100 → Actions: add order tag “high-value refund” and create Gorgias support ticket for customer outreach.

Four examples of leading indicators for ecommerce

Want some examples of leading indicators you can try out in your own ecommerce business? Check out these four:

Example #1: Gift guide page views

• Goal:
  Increase sales of products in a particular category
• Lagging indicator:
  Number of product sales, revenue from a product category
• Leading indicator:
  Page views on a gift shopping guide on the company’s blog

Gift guides are an excellent way to draw attention to specific products in your merchandise mix. They are a particularly powerful asset during periods like holidays and Black Friday Cyber Monday (BFCM) weekend, but they can convert at any point during the year.

Track the relationship between page views on your gift guide and the sales numbers for products included in it. That way, you can put extra effort into promoting the guide as needed—by engaging your affiliates to share it or building press coverage for it.

An example of a gift guide that can be used this way is the one from Three Ships, a natural beauty brand.

Example #2: Time between purchases

• Goal: Maintain customer retention rate
• Lagging indicator:
  Number of customers who made a purchase at least once per month
• Leading indicator:
  Time between two purchases

Winning a new customer feels great—but getting them to purchase from you again and again is remarkable.

It’s a sign that customers know they can trust and rely on your brand. That’s why the time between purchases is a powerful leading indicator. If someone makes an order every three weeks for a year, but then doesn’t make a single order for months, it may be a sign that you’ve veered off course..

Of course, customers can change preferences. But if they’re not buying because products are out of stock, shipping costs went up, or quality has slipped—those are things you can fix.

Diaspora, a spice brand, is an example of an ecommerce business that could lean on this metric, because they sell products customers need to replenish regularly.

Example #3: Popup-shop visitors and email signups

• Goal:
  Attract new customers in a new geography
• Lagging indicator:
  Number of new customers in a specific location
• Leading indicators:
  Number of popup shop visitors, number of on-the-spot email signups, purchases at the event

Expanding into a new country, city, or region is a big task, not just because you have to figure out logistics like fulfillment and shipping, but because your brand might not be as known or trusted there.

That’s why creating popups is a powerful expansion tactic. If you choose to implement it, you can track the number of people who visited your popup, along with the number of visitors who signed up for updates, and those who made a purchase. With time, you can track how well you’ve turned subscribers into new customers, and new customers into repeat buyers.

As you repeat this process, these metrics become your indicators for future success in new markets based on the success of your popup.

A strong example of a company that uses this in real life is Allbirds, a sustainable shoe and clothing brand. Allbirds already has a retail presence, but Julie Channing, the company’s VP of marketing, says they rely on popups to “learn how much appetite there is for Allbirds retail before fully committing to a city or neighborhood.”

Example #4: Customer service tickets and refund requests

• Goal:
  Meet and exceed customer expectations
• Lagging indicator:
  Customer satisfaction metrics like net promoter score (NPS) and customer satisfaction score (CSAT)
• Leading indicator:
  Number of customer service tickets, number of refund requests

Great customer experience (CX) drives repeat purchases, fuels customer loyalty, and increases customer lifetime value. Investing in customer experience—from the moment a person visits your website all the way through to receiving and unpacking an order—is worth it.

Using a leading indicator to track CX , as opposed to waiting to collect hundreds of customer scores on a survey, gives you an advantage. You can spot a potential issue quickly and solve it for other customers before they even know it exists.

For example, a sudden jump in refund requests might mean consumer confidence in the product quality has dropped, or that your sizing charts on product pages are less accurate than before. A peak in customer service tickets can reveal errors or confusing parts of your checkout flow.

A company like Glowforge, an at-home 3D laser printer company, could implement this to catch an issue customers have with choosing the right material type, size, and thickness for their project. By being proactive, the company can increase customer satisfaction weeks and months down the line.

Common leading indicator pitfalls

Data silos

Your marketing data might live in Meta Ads Manager or Klaviyo, finance data in NetSuite, and warehouse data in an ERP, each with its own reporting cadence. If your dashboard pulls from only one of those, you won’t be able to see the full picture. 

Shopify enables you to break down data silos and consolidate data into a single location. Because Shopify POS and online storefront share one product, order, and customer record, you get a real-time ledger across every channel without costly integration solutions. 

That means store-level returns instantly update ecommerce availability, and high-value online customers are recognized at the counter.

💡Tip: Use Shopify’s consolidated reports (like “Sales by channel” or “Inventory by location”) to spot cross-channel trends. Then trigger Flow automations, like low-stock alerts that ping both the merchandising and ad teams, so the whole organization acts on the same data at the same time.

Batch update latency

Large catalogs and high order volumes sometimes require nightly batch jobs. A “real-time” dashboard that refreshes only at 2 am won’t flag a midday stockout in time. 

Where possible, switch high-risk metrics (such as low-stock SKUs and refund alerts) to event-based triggers via Shopify Flow or webhooks, so the team can see issues as they occur.

Use leading indicators to maximize your ecommerce success

Leading indicators are signals of future success—or helpful signposts that flag where and when you need to redirect your efforts. Identify the right leading indicators—metrics that indicate outcomes such as sales volume, revenue, and customer loyalty.

Start by uncovering what those indicators are and experiment with factoring them into your operations for the next quarter so you can reflect, optimize, and thrive.