on February 16, 2022 (last modified on April 5, 2022) • 15 minute read
Ever wondered why a hot-selling product on your store suddenly lost traction? Or how your customers are actually finding you online? Or how easily can they navigate your site?
Yep, you can make assumptions. But who’s to say that the guesswork is accurate? After all, they’re all hunches. The solution? Ecommerce analytics.
This involves studying data related to customer acquisition, retention, conversion, behavior, and much more. In short, it’s the process of getting a complete data-backed picture of your buyers throughout their customer journey.
Want to learn how to leverage eCommerce analytics to grow your store’s online sales? We’ve got you covered as we dive into:
For learning how other eCommerce stores are using their analytics for growing sales, we talked to 40 respondents from the space. All of these are either eCommerce businesses or agencies/consultants working with eCommerce businesses.
Here are our leading takeaways:
They voted for information on user behavior during the purchasing process and throughout the checkout as the most valuable information derived from data analytics.
Additionally, most eCommerce businesses (more than 50%), reported that these happened as a result of the following eCommerce analytics:
Agencies/consultants we surveyed also voted for Information on user behavior during the purchasing process and throughout the checkout as the most valuable information derived from data analytics.
Most eCommerce agencies/consultants (50% and more), reported the following benefits as a result of analytics:
Here’s a sum-up:
On to more meaty parts now.
Ecommerce analytics involves collating data from various business areas with the aim of understanding target customer behavior and preferences better.
Put another way, eCommerce analytics is the key to making data-driven decisions for boosting your store’s online sales.
The importance of eCommerce analytics lies in the fact that it can help you in all business areas, therefore, assisting in boosting sales.
Wondering how? eCommerce analytics give you the necessary data to make your business and product decisions.
From who exactly your target buyer is to how they find you, how much it costs you to market to them and how easy it is for them to checkout from your site — data helps with everything.
In fact, information on checkout is information that eCommerce folks who we talked to find the most valuable.
This is followed by information on products and their performance, and info on internal and external marketing efforts.
As eCommerce consultant, Alex Birkett explains it: “Data can’t really help you drive more sales, but it can reduce uncertainty in decision making. And making better business decisions can of course help drive more sales.”
In short, you can use the data to inform all big and small decisions such as which marketing channels are the most effective, what kind of sales emails should you be sending – even how you can personalize products based on your target buyers’ preference.
Thinking basic research will suffice? Think again. Ecommerce consultant, Matt Lally of MattyAds, brings an excellent example to the table. “You don’t have to look any further than the iOS changes last year on Facebook.”
“Many eCommerce businesses had their legs cut out from under them after Apple instituted their user privacy updates,” Lally writes. “Facebook struggled mightily through the summer of 2021 to provide quality purchase conversion data to brands. Expert marketers had to pivot.”
“That’s when the use of internal databases and data analytics came to play,” observes Lally. “Instead of relying on Facebook’s reported revenue figures, brands had to switch to optimizing towards real, attributable revenue. This was a crucial switch in the ecosystem that allowed brands to generate more sales.”
In summary, here’s how eCommerce analytics are beneficial:
The stronger your hold on and use of your eCommerce data, the better you can make your business decisions. Naturally, this gives you an edge over all competitors who either don’t or poorly use eCommerce analytics.
Thinking what tools the experts use? We inquired after the same and learned that over 90% or the majority use Google Analytics. Some 40% use Shopify and 35% use centralized dashboards such as Databox.
Other tools include WooCommerce, BigCommerce, and more.
Adopting your product and business to buyers’ requirements is the key to success. Just look at how Blackberry failed because it didn’t adapt to changing consumer preferences and you’ll understand the significance of making customer-centric decisions.
To improve the performance of your online store, it’s vital to have access to useful and actionable data. But, with so many metrics available to track, it may be hard to determine which ones will actually help you move the needle.
That’s why we have created a concise dashboard template that only tracks the most important metrics for analyzing the core elements of your ecommerce businesses, such as:
Now you can benefit from the experience of our Google Analytics experts, who have put together a plug-and-play Databox template showing the most important KPIs for monitoring your online store’s performance. It’s simple to implement and start using as a standalone dashboard or in ecommerce reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Google Analytics account with Databox.
Step 3: Watch your dashboard populate in seconds.
Having the right data empowers you to plan marketing campaigns that are likely to resonate with your target audience. As a result, your campaigns are likely to be a success, delivering better results.
Sure you can start off with a rough understanding of who your target consumer is. As time passes though, you need to refine your buyer persona so you can market and sell better.
Not to mention, the better your grip on customers’ likes and dislikes, the better product and shopping experience you can offer. Done well, this, in turn, has the potential to grow positive word of mouth for your eCommerce business.
Ultimately, all these benefits help you reap improved online sales.
Related: 7 Ways to Use Customer Data for More Efficient Marketing
Here are the different data types you should be focusing on:
Related: Facebook Ads for Ecommerce: 11 Ways to Optimize Ads for Your Online Store
Now for proven best practices that you need to be mindful of as you work on collating eCommerce analytics for growing sales.
Here’s a quick lowdown followed by the details:
With the right data on your hands, don’t be afraid to tweak or try new campaigns that the data shows your target buyers will appreciate.
In fact, “data analytics simplify the process by identifying what works and what doesn’t,” in the words of Harriet Chan from the eCommerce business, CocoFinder.
It’s why Chan advises it’s essential that “we must continually test new strategies as markets since consumer preferences, and tastes change frequently.”
Over time, for example, your consumers preferred channels from hearing you might change. Case in point: CocoFinder. Chan talks about it: “We used big data analytics to better understand our clients’ preferences. Then we gathered data to better target clients in our email advertising.”
“If you receive promotional emails from our site, we propose that specific service based on your data,” Chan points out.
“With the use of big data analytics, we discovered that demand for one of our services is increasing in specific places. We noticed through additional social media and CRM data that customers are using our site solutions to replace competitor alternatives.”
Explaining further, Chan writes, “we used the information to anticipate sales potential for each region where clients might sign up for the fastest-growing service line. Then, a team is formed to brainstorm ideas for optimizing advertising and sales.”
Ecommerce consultant, Alex Birkett, commends consistent testing or “experimentation” too. “Experimentation gives you a counterfactual and quantifies the value of alternative decisions.”
“Looking back at past data gives you hypotheses, and experimentation lets you test these.”
“Without experimentation,” Birkett says “you’re constantly looking at time-series data and wondering ‘what explained that?’ Meanwhile, everyone around the room is scratching their head or pretending to know and give an explanation. Experimentation solves that.”
Related: How to Run Effective A/B Tests According to 28 Marketing Experts
For e-stores, poor inventory management only leads to poor sales – even though the demand for a specific product may be high.
Leanna Serras from an eCommerce store FragranceX shares they use eCommerce analytics to avoid such a problem. “As a busy eCommerce store, we want to avoid losing sales because popular items run out of stock.”
“Our solution is to manage our inventory with information from our customer database,” comments Serras. “We do this by connecting our CRM with our inventory management system.”
Related: 8 Best CRMs for Ecommerce in 2021
“Predictive analytics helps us to determine the right quantities of products to buy and allows us to spot purchasing trends and prepare in advance. So by leveraging our data, we can ensure that our popular items never run of stock, thus driving sales and customer satisfaction.”
You know what they say: the best business idea is one that’s best according to your target customer.
Put another way, an eCommerce store will face a tough time growing its sales if the products aren’t in market demand.
Equally important here is the marketing approach you take. Oftentimes, the product has a high market demand. But the marketing doesn’t consider customer behavior, leading to marketing strategies and campaigns that hardly resonate with the target audience.
As Laura Berg of Kongclub puts it: “Data analytics allow us to be more self-aware as a business by consolidating our data with metrics. This seems like the starting point for discussing the importance of data analytics in eCommerce because this data ultimately shapes how we design our business.”
Related: The 23 Most Important Ecommerce KPIs for Tracking & Growing Sales
“From what services we feature, to how we convert customers to enlist, to how we design our app is all influenced by our data analytics,” says Berg.
Here’s how AskVet’s team walks this talk: “We shaped our core brand identity at AskVet around personalizing pet care for every consumer because that is exactly what the market–pet parents–need and are looking for.”
“That being said, metrics also provide useful feedback that clues us into pivotal points in our sales funnel where we might need to emphasize a call to action or redesign how our users navigate our app.”
“There are both micro and macro elements that help us refine our business towards more efficient conversions and higher sales,” Berg adds.
Summarizing, Berg highlights: “Data is the only way to manage eCommerce anymore at scale. Data influences every aspect of operations today and in so many ways, [it] makes our company more efficient and more profitable.”
In short, if you’re looking to create a customer-winning eCommerce business, you’ll need to gather and study data to shape your business plans. The reason? The data tells you exactly how customers behave, what they prefer, and how they buy.
Your buyer persona is a living document – one that you keep modifying based on what you learn about your customers. Ecommerce analytics help with this, as it did for FitRated according to Emod Vafa, a consultant working with them.
“Data showed us that during the pandemic females between the age of 35 to 45 in metro cities, such as NY, LA, Chicago invested heavily on home gym equipment,” comments Vafa. “These users did most of their research on their cell phones.”
Related: Biggest eCommerce Challenges in 2021
“So we acted on this info and adjusted our targeting to serve these users. The results were satisfactory,” Vafa shares.
Essentially, “data analytics help us better understand our clients’ persona and market behavior so we can ultimately optimize our performance,” as Vafa puts it. “It also allows us to forecast consumer behavior patterns and increase our revenue.”
Here’s how they gathered data for implementing all these changes. “We gather data from all areas that have an impact on our online business such as inventory shortages, lock-down/covid restrictions, our ideal persona, and our full customer’s journey – from discovery to acquisition to conversion,” elaborates Vafa.
“We then use this information to understand the trends and the shifts in consumers’ behavior to make data-driven decisions that drive more online sales.”
In short, in Vafa’s words: “Data analytics helps us ensure we are effectively targeting customers, both new and existing, and maximize our marketing impact.”
To reiterate, data from eCommerce analytics gives you the complete picture of which products your target buyers prefer, which they show a tendency of disliking, and so on.
Hard to believe? Take a page from Austin Dowse from eCommerce store, Aimvein. “I have seen rapid growth after analyzing analytics and making strategies based on it.”
“To date, I have a huge database of customers, which I can leverage in the future to sell more products to my existing customers,” Dowse shares. “Also, I have a good idea of what products are the best sellers and what are not so I can make better decisions in terms of marketing and promotions.”
The perks of taking this eCommerce analytics-driven approach? Hear them from Dowse: “By doing this I am able to:
To top it all, Dowse uses the data – whether it’s from Google Analytics or a third-party tool according to them – to plan their marketing budget.
Related: How to Set a Marketing Budget for a Small Business: 20 Tips
Ready to grow online sales with eCommerce analytics? Begin with tracking the right data.
An efficient way to do so? Create centralized dashboards with Databox that display all the essential data on one screen. This way, you can quickly and easily read important data without having to look all over the place for key metrics.
One another plus point: once you’ve plugged in the data sources, the dashboard updates automatically – leaving little work on your plate.
So start today by signing up for Databox for free.
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