With so many different metrics to track, and different platforms to track them with, it's easy to feel overwhelmed by analytics. The danger for an ecommerce business is that you end up tracking nothing, or tracking so much that you get lost in a mountain of data. That's why it's crucial to clearly understand ecommerce analytics and what metrics are most important for your business growth.
This guide will make ecommerce analytics easier. We'll take you through the benefits of ecommerce analytics and guide you on which metrics you should be tracking. We'll also share some best practices and tools to help your track your brand's success.
What is ecommerce analytics?
Ecommerce analytics is the analysis and measurement of data related to ecommerce activities such as website traffic, sales conversions, customer data, and more. By understanding ecommerce analytics, ecommerce businesses can measure the effectiveness of their marketing campaigns, design of their online store, and product offerings.
What are the benefits of analytics for your ecommerce business?
Ecommerce analytics provide valuable insights to fuel your brand's growth.
Optimize website design and user experience to increase sales conversions
Website traffic, sales conversions, and customer behavior analysis allow ecommerce businesses to see what aspects of their website are working well and which ones need improvement. Businesses can then change their website design and user experience to increase sales conversions.
Identify the most profitable products and marketing campaigns
Ecommerce analytics also helps businesses discover which products sell well and which marketing campaigns are driving the most traffic and online sales. This information can help businesses focus their efforts on the most profitable products and marketing campaigns.
Understand customer behavior to improve customer retention and satisfaction
Tracking customer behavior allows ecommerce businesses to see what customers do on their website, such as what pages they visit, how long they stay on each page, and which paths lead to the most conversions. This information can help businesses understand what customers are interested in and what encourages them to buy.
Understanding an audience's preferences means businesses can improve the accuracy of their product offerings – resulting in more satisfied customers who keep coming back for more.
Which metrics should you track?
So, what ecommerce metrics should you be tracking? It can be overwhelming to track every single ecommerce metric, so it's important to focus on the data points that have the most impact on your business growth.
Start by tracking these important ecommerce metrics. Then, add others based on your current goals.
By tracking web analytics, an ecommerce company can learn more about its potential customers and see which channels are driving the most traffic and sales. This information can help businesses double down on the tactics that are working well.
Website traffic: how many people are visiting your site
Traffic source: how are visitors reaching your site – for example: from search, by directly typing in your URL, social media, or email
Device type: which device type do people mostly use to access your site
Location: where are your site visitors from
Referral sources: which websites are referring visitors to your site
Bounce rate: how many people landed on your site and then left without taking any action (like searching for a product or clicking on another page)
Sales data allows ecommerce businesses to see how many of their website visitors are turning into customers, which products are selling best, and their overall business performance.
Conversion rate: the percentage of your site visitors who make a purchase
Learn how to calculate and improve your conversion rate
Average order value: the average amount each customer spends on each order
Customer lifetime value: the total amount customers spend on your ecommerce business over the course of their relationship with you
Cart abandonment rate: the percentage of your customers who put items in their online cart but don't complete the purchase
Returning customer rate: how many customers make more than one purchase from your shop
Top products by units sold: which products are selling the best
It’s also essential for ecommerce brands to track the effectiveness of their marketing efforts. This marketing data allows you to identify the strongest marketing channels and tactics so you can replicate them and build on your success. Tie these back to your sales data so you know what's having an impact on your bottom-line.
Click-through-rate (CTR): the percentage of people who click through to your ecommerce store from your ad campaigns, social posts, emails, and text messages
Customer acquisition cost: the total amount of money ecommerce businesses spend to acquire a new customer. This includes costs such as advertising, marketing, and sales expenses
Engagement rate: the percentage of your audience who interact with your content, like a blog post or social media post
Audience size: the total number of people in your audience on a specific channel. This name for this metric will change depending on the marketing channel. On social media, it's followers. For email and SMS, it's subscribers.
These metrics will be a good starting point, but you’ll want to add others depending on the channels you’re using and campaigns you’re running.
Ecommerce analytics best practices
When it comes to ecommerce analytics, there are a few best practices that businesses should follow.
Track the right metrics
By tracking the wrong metrics, ecommerce businesses can end up wasting time and energy on data that doesn't have a significant impact on their business growth. Use the metrics we've listed above as a starting point. Then, experiment with different metrics until you find the ones that give you the information you need to measure progress toward your goals.
Review ecommerce analytics data regularly
Regularly reviewing data helps ecommerce brands figure out what attracts and engages customers. What worked one month ago might not work anymore, so it's important for companies to review performance regularly and make adjustments to improve their website and increase revenue.
Focus on ROI, not just revenue
Although it's tempting to focus on the tactics that bring in a lot of revenue, high revenue doesn't necessarily mean a marketing activity is effective. Maybe a brand's paid ads are bringing in $10k/month in revenue, but the ads cost $5k/month to run. Meanwhile, their influencer marketing program is bringing in $1k/month in sales revenue, and it only costs $200/month. In this case, the brand is better off focusing its efforts on growing its influencer program because it brings a higher return on investment.
Ecommerce analytics tools
When it comes to ecommerce analytics, you'll need the right tool for the job. There are a number of different analytics tools available, each with a unique set of features.
When choosing your tool, consider the needs of your business: Are you looking for a tool that'll help you track website traffic and conversions? Or are you more interested in understanding customer behavior and trends?
Once you have determined the needs of your business, you can narrow down the options. There are multiple factors to consider when you make your decision, such as price, features, and level of support.
Ultimately, the best ecommerce analytics tool is the one that meets the needs of your business and fits within your budget.
Consider these popular analytics tools:
Optimize your ecommerce strategy
Once you've found your rhythm with ecommerce analytics and are able to understand how your business is performing, the next step is to take action to improve your key metrics. Check out 9 Proven Strategies to Increase Sales For Ecommerce.