eCommerce analytics is the most effective business growth strategy available. Around three out of every four marketing executives rely their decisions on data analytics. However, most businesses still lack access to quantifiable measures to demonstrate the value of their marketing investments.
The tendency is being driven by a lack of understanding of data analysis. While 66% of marketers believe eCommerce analytics are vital, more than half have teams with inadequate skill sets.
The process of identifying, evaluating, and presenting data trends connected to online business is known as eCommerce analytics. eCommerce analytics can be used to track user activity, performance trends, and ROI.
Marketers utilize analytics to demonstrate the return on investment (ROI) for campaigns and make smarter decisions in order to boost sales, cut costs, and enhance business operations.
eCommerce analytics aids in the centralization and management of data. According to Siva K. Balasubramanian, Associate Dean and Professor of Marketing at Illinois Tech’s Stuart School of Business, a typical difficulty for today’s organizations is the emergence of many data sources to gather and merge data about consumers, goods, and markets. They struggle to examine the datasets at their disposal in an effective manner.
“Marketing analytics provides effective approaches to address this issue by arranging data to generate measures that are most beneficial for continuously evaluating business performance,” says Balasubramanian. “Analytics focuses on issues that are most important to the business, and performance measurements aid in identifying and correcting problems in real time.”
Analytics is as much about art as it is science. A smart data analyst can tell you a story by seeing thousands of clicks, visits, bounces, seconds spent, conversions, and other data points.
Data points can tell you how many people visited your website in a given week. For example, perhaps just half of your visitors appreciated your website enough to spend more than a few seconds on it. And perhaps only half of those who stayed made a purchase, while the remaining 10% got stuck on the checkout page, became frustrated, and left.
That is the narrative of a group of people who did completely different things on your online store. This information can help you stay ahead of the competition. That may, however, raise fresh questions. Is 50% a good or poor number? How many seconds (or minutes) is a reasonable length of time for a customer to spend on a website? How many of those who stay should I expect to purchase something? How can I figure out why the others aren’t interested?
You can’t change the ending unless you know the entire narrative. You can take action after you understand why visitors to your site behave the way they do. However, the answers to the preceding questions are context-dependent and will vary greatly based on the kind, size, industry, and stage of your organization.
Once you’ve mastered eCommerce analytics, you’ll be able to create your own stories based on the data you observe and improve them.
How do You Analyze eCommerce Data?
Data collection is particularly important for eCommerce organizations since it enables for the monitoring and tracking of consumer behavior in online stores. This enables eCommerce organizations to determine average user behavior and sales barriers on specific product pages and purchase stages.
eCommerce data analytics can assist firms in answering critical questions such as:
- What is the share of mobile traffic vs. desktop traffic coming to the site?
- How effective are the different device category user journeys in driving online sales?
- Which marketing channels and traffic sources are the most effective for driving users that make purchases? What are the ROIs of the marketing efforts?
- Which steps of the eCommerce sales funnel have the highest drop-offs and where do we need to optimize our offering?
- On which steps of the checkout process do we have the highest drop-off rates? And how much money are we potentially losing due to this?
- Which products/product categories are deriving the most revenues? Which ones should be marketed more?
The right data is crucial for making informed decisions, it applies to all the roles within an eCommerce project. It helps
- eCommerce managers to evaluate overall eCom store performance and follow the performance trends
- Digital Marketing team to evaluate their paid advertising campaigns efficiency, return on ad spend (ROAS), evaluate existing audiences, and identify new ones
- SEO team to evaluate traffic performance coming from organic search results
- Content team to evaluate how users are consuming the content that they provide, which content is the most efficient, and which content needs to be optimized
- Product team to evaluate product trends, including the most viewed and added to cart products, product categories, brands, etc
- Development team to find potential functionality bugs on certain browsers, devices, screen resolutions, and monitor errors (404s, error messages).
This can only assert the need for data collection and processing for the eCommerce business.
There are various tools—eCommerce data analytics software—available for gathering and analyzing eCommerce data. Typically, the process does not boil down to a single tool or platform—the most efficient strategy for collecting and analyzing eCommerce data is to build up a combination of tools and platforms to receive, analyze, and assess data from various sources and using various types of analytical solutions.
|Data Tracking Platforms
|Description & Purpose
|Google Analytics (GA)
|Google Analytics is a web analytics service offered by Google that tracks and reports website traffic and user behavior on a website. Google Analytics helps to understand user behavior patterns and use the data to improve the website and digital marketing efforts.
|Facebook Pixel & Events
|The Facebook Pixel is a piece of code that you place on your website, allowing you to monitor conversions from Facebook ads, optimize ads, build targeted audiences for advertising campaigns and retarget people who have previously interacted with your website
|Google Ads conversion tracking
|This is a tool that allows to track which campaigns and ads are driving meaningful actions from the users after they have interacted with the ads. Examples of conversion events that can be tracked: user purchased a product, signed up for your newsletter, called your business, or downloaded your app
|Google Ads Dynamic Remarketing
|Dynamic remarketing lets the company show its previous visitors ads that contain products and services visitors viewed on the company’s website. With messages tailored to your audience, dynamic remarketing helps you build leads and sales by bringing previous visitors back to your site or app to complete what they started
|Floodlight is the conversion tracking system for Google Marketing Platform. Like other conversion tracking systems, it consists of tags that track the activity on your site, along with reporting features for adding conversion data to your reports. It uses a cookie to recognize repeat visits from a specific browser.
|Hotjar is a product experience insights platform that gives you behavior analytics and feedback data to help you empathize with and understand your customers through tools like Heatmaps, Session Recordings, Surveys, and an Incoming Feedback widget
|Universal Event Tracking (UET) is a tool that records what customers do on your website. By creating one UET tag and placing it across your website, Microsoft Advertising will collect data that allows you to track conversion goals and target audiences with remarketing lists.
|The LinkedIn Insight Tag powers conversion tracking, website audiences, and website demographics when using LinkedIn as a marketing channel
Why are eCommerce Analytics Important?
Now that we’ve defined eCommerce analytics, let’s look at the top reasons why an eCommerce company should use them.
Understand marketing data
A strong marketing analytics software centralizes all of your data. All of your campaigns, from social ads to emails to marketing automations, can be tracked. You may also get real-time statistics, allowing you to rapidly determine what is working and make smarter judgments about where to direct your marketing spending.
Analytics, according to Craig Hewitt, CEO of podcast analytics software Castos, overcomes the problem of not knowing how to leverage marketing data to promote business success. “Marketers frequently have a large amount of data about their clients but fail to properly use it.” They would struggle to develop a marketing strategy that produces consistent results without the information provided by eCommerce analytics.”
Analytics may help you measure marketing success and make better decisions, allowing you to become a more strategic firm.
Modern eCommerce analytics tools treat your data as if it were a linked system, allowing you to discover trends and patterns in your organization. It enables you to understand how your company is performing now and in the future.
Marketing analytics can help you condense data and make it visible in as little time as feasible.
- The number of visitors to your website by referrals and marketing campaigns
- The actions visitors take on your website over specific periods of time
- Most-visited pages during busy shopping seasons
- What devices people visit your store on
Use customer data
The beauty of marketing analytics is that it allows businesses to collect, organize, and utilize customer data. Consumers can connect with your store in various ways, and your marketing analytics will track each interaction. You can’t figure out who is on your site without effective marketing analytics and reporting.
Customer behavior can be better understood via growth, engagement, and revenue reports. You can simply see who interacts with your content and if they clicked, bought, or downloaded something, allowing you to develop content that is relevant to them.
“Marketing analytics may assist firms in reaching the right audience with the right message at the right time,” Craig says. “By concentrating on data points and utilizing marketing analytics tools, organizations can gain insight into their ideal prospects in order to optimize their messaging.” Brands can answer their audience’s demands sooner and better than their competitors by generating more relevant content that generates greater interaction.”
For example, suppose you see that an Instagram campaign featuring your shoes in an urban street setting generates more sales than an office setting. In the future, you can pitch your products targeting streetwear shoppers to attract the correct people. To increase product awareness, a merchant could work with more relevant influencers or modify their ad targeting.
The most powerful lever for increasing profitability is how you price your things. According to research, price management activities can enhance a company’s margins by 2% to 7% in 12 months, generating a ROI of 200% to 350%.
You should have an optimal price for each product that customers are willing to pay. Marketing analytics can help you better understand how price influences purchase across different client segments. It will assist you in determining the ideal price points at the product level in order to optimize income.
Companies that incorporate data into their weekly routines show a significant improvement in performance. Merchants who develop the practice of examining data, gaining marketing insights from analytics, and putting those findings into action are the most successful.
Making data analytics a habit is straightforward. All you need to do, whether you’re a solo entrepreneur or part of a team, is adopt weekly check-ins.
Successful businesses prioritize the resolution of their most critical constraints. Every week, begin by accessing your statistics and getting a clear picture of your priorities and marketing initiatives for the following days.
If you know, for example, that your average page load time is high in contrast to your peers (or the previous week), and that page load time has a direct impact on conversions, you’ll know that reducing it should be a key focus for you.
As shown in the preceding example, conversion rates are a major issue for this store. It should concentrate its efforts on refining its landing pages, store experience, and sales funnel in order to increase conversion rates and sell more.
Alternatively, you can simply keep track of your measurements in a spreadsheet or on a whiteboard. The most important thing to remember is to prioritize. Always compare your data to the prior week if you want to improve your stats over time.
After you’ve identified your most pressing issues, consider solutions that will have a positive influence on the red numbers on your dashboard. Put these recommendations into action, and then repeat the checkup the following week to see if your numbers have improved. This approach should be repeated every week until all of your metrics are green.
That’s all. Nothing can stop you if you’re fluent in analytics and incorporate data into your company’s decision-making process.