What is Year-Over-Year (YoY) Growth?

Year-over-year (YoY) growth compares a metric’s current value to its value during the same period one year prior. By comparing January 2026 to January 2025 (rather than to December 2025), YoY growth normalizes for seasonal fluctuations that would distort month-over-month comparisons. It is the standard measure for evaluating whether a business is truly growing, stagnating, or declining.

Why It Matters

E-commerce is inherently seasonal—Q4 is typically the strongest quarter due to holiday shopping, while Q1 is often the weakest. Month-over-month comparisons can be misleading: a 30% drop from December to January looks alarming but is perfectly normal. YoY growth eliminates this noise, showing whether you are performing better or worse than the same comparable period, and at what rate your business is expanding.

How It Works

• Calculation: YoY Growth = ((Current Period Value - Same Period Last Year Value) ÷ Same Period Last Year Value) × 100. A result of 25% means you grew 25% compared to the same period last year.
• Applied to Key Metrics: Calculate YoY for revenue, order volume, units sold, average order value, customer count, and operational metrics like orders per day and shipping cost per order.
• Trend Analysis: Track YoY growth rates over multiple periods. Accelerating YoY growth indicates strengthening performance; decelerating YoY growth is an early warning signal even if absolute numbers are still up.
• Operational Planning: Use YoY growth rates to project next year’s demand for capacity planning, inventory purchasing, and staffing decisions.

How Nventory Helps

Nventory provides YoY comparison views across all operational and revenue metrics, allowing you to quickly assess growth trends by channel, product category, and warehouse. The system uses historical YoY patterns to improve demand forecasting accuracy and capacity planning for upcoming periods.