eCommerce Analytics: A Guide To Driving More Online Sales With Data
Increasing online sales is the principal goal of a myriad of businesses, large and small alike. To boost sales, you will need a solid sales strategy that has the customers in its center – because, without a customer focus, companies can not survive. But to give buyers a reason to purchase from you, you need to offer them the best possible online shopping experience. And nowadays, there’s only one thing that can help you do that right – using data and eCommerce analytics.
The Basics of eCommerce Analytics
Collecting and assembling data from all areas that impact an online store and using the acquired information to understand the trends and the change in consumers’ behavior are known as eCommerce analytics.
It is a vital component of the digital transformation of businesses that helps build a comprehensive view of what drives revenue, enabling companies to bring better business decisions.
By using eCommerce analytics, businesses can better manage their inventory and are in a position to improve marketing, easily detect fraud, and genuinely understand customer expectations.
Mechanisms to Analyze and Optimize Online Stores
Extract, Transform and Load (ETL) Tools
ETL tools are among the most effective ways for businesses to gather real-time data from multiple sources and incorporate them into a single, centralized location – a data warehouse. The process consists of three steps:
- Extraction: Raw Data (structured and unstructured) can be extracted from a wide range of sources and imported and consolidated into a single repository;
- Transformation: Through setting rules and regulations, data quality and accessibility are ensured so that the data can arrive at its new destination fully compatible and ready to use;
- Loading: In the last step, the newly transformed data are loaded into a new destination. That can be done as a full load or an incremental load.
An added value of ETL tools is that they can migrate data between a diversity of sources, destinations, and analysis tools. Using them makes the data management task much more manageable. It simultaneously improves data warehousing, which is why every online business should opt for the best ETL tools available on the market. Simply put, the ETL process plays a critical role in producing business intelligence and executing broader data management strategies.
Google Analytics and Its Enhanced eCommerce plugin
Almost everyone uses Google Analytics, which is one of the best free tools available out there. Using this option is a great way to increase your eCommerce conversion rate as it provides merchants with a broader view of metrics. Even though it takes some time to set up the tracking, the additional data’s value is worthwhile. Basically, with the Enhanced eCommerce tool, you get information from across the entire customer journey. That said, you are able to:
- Track traffic at every stage of the funnel, which means identifying weaknesses that lead to cart abandonment or friction points in the checkout process;
- Overview of the performance of each product at the sales level;
- Spot from where the traffic comes (desktop, mobile, tablet) and how those visitors are converting;
- See which pages the visitors are spending the most time on and where there is the most bounce.
Google Analytics allows companies to generate business insights that can help grow online stores, improve product performance, and intensify marketing efforts.
Social Media Analytics
Social media is a popular marketing channel for online store owners. With proper usage, it is possible to map out the entire funnels for social media marketing activities. For example:
- Facebook Analytics – If you are using Facebook for your business, you need to be using Facebook analytics. Facebook Insights tracks likes, page views, and more. It shows you who your audience is and how they are interacting with your page.
- Twitter Analytics – Even though Twitter doesn’t provide regular analytics to regular users, it gives analytics to advertisers and users who use Twitter Cards.
- Instagram Analytics – Instagram analytics show which social media goals are worth focusing on and provide the data needed to prove ROI on Instagram.
A Must Collected Data
There are plenty of metrics that can be followed and data collected when it comes to eCommerce metrics. Yet, there are five most basic ones that cover the customer lifecycle and which are essential in the data collection:
- Detection – Gathering information about your audience and creating awareness that will lead them to your online store. Collecting data in this area will help you create user personas.
- Acquisition – Measuring the number of consumers that visited your store and the cost of investment.
- Conversion – Once you have managed to bring visitors to your eCommerce store, you need to convert them into customers.
- Retention – Acquiring new customers is more expensive than retaining existing ones, which is why being able to keep the ones you already have pays in the long run.
- Promotion – Buyers that reach this stage are far more than regular customers. They are, above all, your brand ambassadors. They love your products and are telling their family and friends about them.
Benefits of eCommerce Analytics
Today, customers compare prices, read reviews, and look for unique experiences before purchasing a product. Being able to understand their behavior can help businesses stay ahead. Precisely here, a company can see a lot of benefits of eCommerce analytics:
#1 Benefits related to customers:
- Taking care of existing customers – Companies often underestimate the power of cross-selling and up-selling to customers. According to experts, using eCommerce data for a retargeting strategy can be a gold mine.
- Understanding consumers – The best way to drive sales in your store is by understanding consumer preferences and expectations. Collecting user behavior data can help you understand their demands, expectations, and pain points.
- Product recommendations – Today’s shopper loves personalization. By using eCommerce analytics, companies can predict the needs of individual consumers and make relevant product recommendations.
- Engaging user experience – Besides price and quality, businesses need to offer an exciting user experience to be competitive. By analyzing data, companies can see how much time customers spend on their site and what features capture their attention.
- Satisfied customers – The ultimate goal in tracking the analytics is gathering data to better understand customers and optimize products and processes to meet and exceed their expectations. In fact, customers are known to stick to companies that treat them right.
#2 Benefits related to products:
- Improved product development – Customers have options and therefore control. That is why companies need to keep up with their accelerating expectations. Having evidence of consumers’ likes and dislikes can be of tremendous help in the product development process.
- Optimized product portfolio – Analyzed data can help companies spot their bestsellers and what products don’t sell, which can ultimately help optimize the product portfolio.
- Good inventory management – eCommerce analytics can help companies forecast and plan inventory for the upcoming period. Knowing where the products are and when is the right time to reorder saves time and energy around fulfillment.
The Bottom Line
Consumer demand for online products and services will continue to grow, forecasted to double in size by 2022. This demand, combined with the further advancement of technological novelties, will undoubtedly accelerate the growth in global eCommerce sales. To survive and be successful, online businesses will have to build a deep understanding of and connection to the consumer. The best way to do that is by creating a competitive customer experience through using eCommerce analytics. The gained insights will optimize consumer experiences across all customer life cycles, which will drive more online sales.
Dave is a serial entrepreneur who co-founded Shortlist in 2018, a marketing un-agency that serves as an outsourced dedicated marketing team. He has also co-founded Less.churn, a churn reduction app, prior to selling it in 2018. In 2012, he quit his job to travel the world, and has visited over 65 countries.