How to improve your eCommerce Analytics

Feb 19, 2021 | eCommerce, Reporting

The Covid-19 crisis has transformed how consumers shop and how retailers sell. Springing ahead of all expectations, e-commerce has grown years ahead of its previously forecasted upward trajectory. According to Statista, the number of people buying goods and services online is expected to reach 2.14 billion in 2021.

As the shift to digital is most probably here to stay, a tremendous amount of data is generated daily from online purchases and purchasing behaviour. E-commerce companies collect and analyse this data in their pursuit of reaching new customers, enhance the customer experience, influence buyers’ purchasing behaviour, improve sales, increase brand loyalty, and more.

Nevertheless, the amount of data you need to process to analyse your e-commerce website performance on various levels and draft your marketing strategy can be overwhelming, especially for small businesses. That is where e-commerce analytics come into play.

This article will explain how e-commerce analytics work and take a closer look at the core set of metrics you should track and analyse. We will also present you with the best analytic tools to improve data analysis, performance, and efficiency, thus harnessing the power of data to grow your business and stay ahead of the competition.

What is eCommerce Analytics?

Ecommerce analytics is the process of gathering data from all areas that impact your e-commerce business and utilising this information to understand your target market, purchasing trends, the changes in consumers’ behaviour, and more. Ecommerce analytics make use of metrics related to the full customer journey and allow you to make data-driven decisions that will help grow your business.

E-commerce analytics can ensure that the massive amount of data collected from daily engagement with customers, is used to develop your brand. They can help you understand your target market, what makes people want to buy from you, which social media platforms work better for your business, realise which marketing strategies work and which don’t, identify which product descriptions generated sales, and more.

Quantitative and Qualitative data

To begin with, let’s divide the e-commerce data you plan to focus on into two main categories. There are two different types of e-commerce data, quantitative and qualitative data.

Quantitative data is defined as the value of data in counts or numbers where each dataset has a unique numerical value associated with it.

In essence, it is the numerical measure of various metrics you monitor like the number of daily visitors to your website or the quantification of qualitative entities, like when asking your customers via an online survey how likely it is to recommend your brand on a scale of 0 to 10, for example.

On the other hand, qualitative data is non-numerical and is used to approximate or characterise something based on its attributes and properties. Qualitative data is based on people’s perceptions or emotions, and it is essential in determining the frequency of traits or characteristics. It usually comes from sources like customer surveys, and it can help you identify customers’ pain points or what works or not on your e-commerce site, for example.

Although different in nature, the two types of data should not be used independently. Combining results from quantitative and qualitative data sets will help you identify potential issues in your business model and develop solutions and strategies to improve the customer experience, your marketing strategy, strengthen your brand loyalty, and much more.

Which eCommerce Metrics Should You Track?

It is one thing to know what e-commerce analytics is and how important it is for your e-commerce company, but it is a far more significant challenge to choose which data to analyse and make that data work for your brand.

Many companies, especially new ones, can get easily overwhelmed by the sheer amount of data they have access to daily and have difficulty trying to determine what kind of information and how much of it they need to collect and analyse. And unfortunately, many times, that decision is based on instinct and not real insights.

Our advice to that is simple: understanding your data means understanding your business. While there may be a core set of standard metrics important to every business, the e-commerce metrics you will eventually choose to focus on and analyse should relate to your business model and be relevant to your target audience, your products or services, and the way you operate.

The truth is, finding the right metrics to analyse is easier said than done. There is a pretty significant number of metrics to choose from and determine which ones are useful to your business requires thorough research and experimentation.

Nevertheless, starting with the fundamentals and then, when you have a solid understanding of them, begin specialising step by step is the safest way to go. To help you embark on the e-commerce analytics journey, we present you with the most important metrics based on the customer journey’s key areas.

1. Know Your Audience

Initially, you need to gather information about your audience and identify your current and prospective customers. Begin by finding demographic information about your website visitors, like their age and gender, data on their geographic location, interests, and specific preferences for products, services, or content.

Audience-focused metrics also look into how people engage with your brand. What devices and platforms do they use to access your website, how many people saw your marketing or ad campaign, and more.

It is also beneficial to monitor email campaigns and social media engagement through the following metrics:

Reach

The number of unique users who have seen your email or content on social media.

Impressions

The total number of times people saw your social media post. Impressions’ numbers are almost always higher than Reach, as one user can have multiple impressions for a particular piece of content.

Engagement

The number of users that engaged in some way with your content. That metric can take many forms depending on the nature of a specific piece of content. It can represent the number of shares or likes on a social media post, or the number of times users opened your email or clicked on a specific link included in that email.

Click-Through Rate (CTR)

CTR is the ratio of users who clicked on a specific link to the number of total users who view the webpage, email, or social media post that contains that link. It is used to measure a marketing or ad campaign’s success because it helps you understand what works and what doesn’t work when trying to reach your target audience.

These insights can help you efficiently map your e-commerce customer journey and create user personas.

2. Acquisition Stage

This e-commerce analytics level reveals how users are finding your online store, marketplace listings, or content, how much time they’re spending on your website, whether they are new or returning users, what channels generate the most traffic, and more. This information is handy when crafting your marketing campaigns as you can quickly identify which sources drive traffic to your website and which ones have the best conversion rates.

Cost per Acquisition (CPA)

Cost per Acquisition, also known as Cost per Action, measures the aggregate expenses of a customer taking an action that leads to a conversion. Whereas various metrics such as conversion rate (explained later in this chapter), click-through rate, or the number of sessions can be indicators of success, CPA as a metric directly measures a marketing campaign’s revenue impact: CTA = Total campaign cost / Number of conversions.

3. Users’ Behaviour

By now, you should have a solid idea of who your site’s visitors are, where they are coming from, which channels they use to find you, etc. The next step is to investigate the actions they take when they are on your website. On which page on your website do they land first, and what keywords did they use to find you? What is the second, third, etc. page they visit after that? When they land on your website, do they move to the next page or they bounce?

How users behave when they visit your website says a lot about them and reveals a lot about your website and brand. Do they find your content engaging enough? Perhaps they show interest in your products but then for some reason they don’t make a purchase.

How users behave when they visit your website says a lot about them and reveals a lot about your website and brand. Do they find your content engaging enough? Perhaps they show interest in your products but then for some reason they don’t make a purchase.

Bounce Rate

It represents the percentage of visitors who enter your website and then leave immediately rather than continuing to view other pages.

4. Conversaion Stage

The point when a lead turns into a conversion is the most important transition for your e-commerce business. Analysing that transition is essential to understand how leads turn into conversions: what path did they follow, how long did it take for them to convert, what are their pain points during the process, etc. That way, you can track and optimise your overall online shopping experience.

Conversion Rate

The number of visitors to your website that complete a desired goal (a conversion) out of the total number of visitors.

Shopping Cart Abandonment Rate

This metric tells you about the number of visitors who add products to the shopping cart but abandon your store before completing the purchase.

Average order value (AOV)

The average amount of money spent by a customer when they complete an order on your website.

Customer lifetime value (CLV)

This metric tells you about the number of visitors who add products to the shopping cart but abandon your store before completing the purchase.

Net Promoter Score (NPS)

NPS is a customer satisfaction metric that measures how likely it is your customers to recommend your business and products to a friend.

The Best Tools for eCommerce Analytics

By now you should be familiar with the essential e-commerce metrics you need to keep track of and analyse to help you improve your overall e-commerce website performance, create a competitive, highly personalised customer experience, and allow you to make data-driven decisions that will help to grow your business. But what tools should you use to analyse your e-commerce data?

As we mentioned above, no businesses are alike, so metrics relevant to a particular company in one industry may be irrelevant to others in a different field. Your choice of tools will eventually depend on your company’s characteristics and needs. Nevertheless, below you can find a list with the best tools in the business to start with that will help you get a well-rounded analysis and understanding of your data.

Google Analytics

Google Analytics is one of the most-used tools for businesses. It is the swiss army knife of e-commerce analytics, and most importantly, it is free. Google Analytics collects your data automatically and transforms it into default report formats or your custom templates.

Google Analytics offers you an abundance of analytics tools that will help you understand your users’ activity and check the performance of your website, marketing and ad campaigns, content, products, and more. The platform automatically tracks how customers find your website, what they search for, what landing pages they visit, their actions once on your site, and their demographics, among others.

Google Analytics is a highly customisable platform. For example, you can customise Google Analytics to identify and track specific goals you want to monitor, such as completing a sale, opting into email marketing lists, signing up for a newsletter, sending a registration form, and more.

The platform also integrates seamlessly with other tools like Google Adworks and Tag Manager so you can use your Google Analytics insights to improve your Adwords campaigns.

HotJar

HotJar is a heat mapping platform that offers a visual representation of your site’s activity and captures real-time customer interaction.

You can then use that data to understand user behaviour better and make the right changes to improve the consumer experience, enhance UX, and grow conversions.

A heatmap is a graphical representation of data where values are depicted by colour that makes it easy to visualise complex data and understand it at a glance. HotJar utilises heatmaps to visualise the most popular (hot) and unpopular (cold) elements of a webpage using colours on a scale from red to blue.

HotJar offers different types of heatmaps that track your visitors’ clicks, taps, and scrolling behaviour, respectively. You can also have access to visitor recordings that depict real actions taken by users as they browse your website. Visitors recordings capture mouse movement, clicks, taps, and scrolling across multiple pages on desktop and mobile devices.

Woopra

Woopra offers end-to-end customer journey analytics. The platform allows you to visualise, analyse, and optimise every step of the customer journey and help you understand how every single touchpoint affects the customer experience.

The solution uses individual-level data to track usage across your website and mobile applications and create customer journey, trends, and retention reports that provide you with full customer lifecycle insights.

The platform also generates individual profiles that allow you to identify your most valuable customers and how they interact with your e-commerce website.

These profiles show the full behavioural history for each user, from their first contact with your brand to conversion and beyond, turning every engagement into an opportunity to create more personalised customer experiences.

Conclusion

As the e-commerce landscape gets increasingly competitive and many businesses aim for the same sales goals, target audiences, market share, etc., knowing how to harness and analyse the correct data efficiently will give you a strong advantage against your competition.

As the e-commerce landscape gets increasingly competitive and many businesses aim for the same sales goals, target audiences, market share, etc., knowing how to harness and analyse the correct data efficiently will give you a strong advantage against your competition.

Stathis Kampylis

Author

Stathis Kampylis is the marketing and communication coordinator at Shiptheory, a best-in-class shipping management platform that connects retailers with the world’s best carriers to automate shipping labels, customs documentation, manifests, and tracking. He is the main contributor to Shiptheory’s E-commerce and Shipping Blog

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