As the number of people who use online channels to purchase products and services increases, e-commerce continues to thrive. Estimates show that by 2025, the industry will grow 50% higher. This promises lots of opportunities for sellers worldwide. But it also means that competition for customers will become more intense than ever.
If you own an online store, keeping up with the competition should be one of your primary concerns. You have to take the steps necessary to set yourself apart from the rest. Fortunately, there are lots of strategies you can use to help you get ahead. One of those strategies is analyzing data to help grow your sales.
But before we delve into this strategy, it’s important to understand what e-commerce analytics is and why it’s important for your brand.
E-Commerce Analytics: How to Use Data to Grow Sales:
What Is E-Commerce Analytics?
E-commerce data analytics involves collecting and analyzing data pertaining to your business in order to improve performance and sales. This involves using a data dashboard that displays data in such a way that it will be easily understood and interpreted.
In this way, you’re better able to take informed actions based on consumer patterns. The need for guesswork is then eliminated. You or your team can integrate various analytics tools with platforms, such as Shopify. By using these analytics tools, you will be able to boost your sales.
The e-commerce industry is undeniably flourishing. Worldwide, the industry was worth $4.9 trillion in 2021. And by 2025, it’s expected to reach $7.4 trillion, representing a 13.25% compound annual growth rate.
But companies are up against challenges when it comes to streamlining the customer experience and winning customer loyalty. They also have to deal with issues on shopping cart abandonment and conversion rates. Moreover, companies need to work on appealing to their ideal client.
To overcome these challenges, companies need to collect and analyze various types of data. These include sales, channel options, conversion rates, and behavior patterns. These insights can then be used by online store owners to make the best decisions. By executing the right strategies repeatedly, an e-commerce business can optimize its operations and drive customer retention more effectively.
Which Metrics Should You Be Keeping Track of?
The customer journey consists of five stages: awareness, consideration, conversion, retention, and advocacy. There are specific metrics associated with each stage of the sales process to help you prioritize prospects and increase conversions.
Your reports need to include these metrics for effective monitoring.
Awareness is the starting point of the customer journey. It is at this point that potential clients find out about your brand or business.
As a first step to determining which channels you should use, find out what channels your customers utilize the most. If your prospects found you through social media ads, it may be worth considering paid ads. In case most of your customers came to you through word-of-mouth, improving your referral strategy is a good idea.
Here are some of the metrics you can use to determine the recognizability of your brand.
Brand search traffic: This is the number of visitors who found your website through a branded search term in a given time frame.
Brand impressions: You can see how often the content of your campaign has been accessed by consumers by checking impressions.
Brand mentions: This metric is a good indicator of brand awareness and buzz. The term "mentions" refers to unsolicited marketing from consumers, such as reviews or website links from online users.
Engagement on social media: This lets you learn about client opinions and how frequently you're mentioned. Social media engagement can include likes, comments, shares, tweets, and views of videos. This metric helps you determine what content is appropriate across social media channels and how to keep engagement up.
Consideration occurs when shoppers access your website and check out the products you have to offer. At this stage, there hasn't been any purchase made. However, their attention has been caught by what you have for sale, and they are contemplating buying something from you. Using this metric, you can see your website's progress toward generating sales. In addition, it will tell you what percentage of visitors left your site following a look at your products.
Here are some of the consideration metrics you can keep track of.
Traffic source: This refers to the way people found your website.
Number of sessions: The number of sessions on your site is the total number of visitors, both new and repeating. When a visitor interacts with your website within a certain time frame, this count as one session.
Page views per session: This is the total number of page views on a website divided by the number of sessions. It shows the average number of pages accessed per session by users. More pages per session indicate that your content is engaging and visitors are interested in exploring more.
Click-through rate: This helps you gauge the effectiveness of your keywords, ads, emails, and other content. This is calculated by how many clicks your ad gets divided by how many times it is displayed.
Add-to-cart rates: This indicates how many visitors placed at least one item in their shopping cart while they were on the site. This metric provides valuable information about the products you offer, your marketing strategies, and user experience.
By utilizing consideration metrics, you can gain essential insights into which sources are most likely to generate traffic so that you can focus on them and get more views, lower bounce rates, and higher conversion rates.
At this point, the visitor to your website is converted into a customer. Conversion metrics help you determine which channels are most effective. They will assist you with budgeting and provide you with an overview of which channels perform best when it comes to conversions.
There are many factors you’ll have to take into account when choosing which channel is right for you. But knowing how much it costs to convert through various channels is already a good indicator of where you should allocate more resources. The number of sales is not the only figure you should be focusing on when tracking conversion metrics. Consider metrics that give you an idea of the worth of those sales and which conversion campaigns you need to improve on.
Sales: These are the profits a company earns by selling products to consumers.
Cost per acquisition: This metric measures the cost of getting a customer through your sales funnel.
Return on ad spend: This indicates how much revenue is generated with each ad dollar spent.
Customer journey goes beyond making people buy your product. You need to keep those customers interested and turn them into loyal customers who will keep buying from you and spread the word about your brand.
Retention metrics show you which customers continue to buy from you and for what reasons. This is a good way to find out which channels work best for increasing customer loyalty. It reveals which channels should be prioritized over those that generate one-time sales.
It’s ideal if customers stick with you and support your business in the long run. With retention metrics, it should be easy to see if you're on track or if anything needs to be changed.
Customer retention rate: This indicates how many customers a business retains over the long run.
Customer churn rate: This refers to how many of your customers discontinued using your product or service over a certain period.
Customer lifetime value: This represents the amount of revenue derived from a customer over the course of their relationship with the company.
Advocacy metrics show how many people recommend your product or brand to others. You can track these metrics by asking current customers during quick checkout or through email surveys. There can be some difficulty monitoring these metrics, but the following can help you get started.
Affiliate deals: This indicates how well your brand has been promoted by affiliates through their networks.
Customer referrals: This is how many people found you by word of mouth.
Net promoter score: This metric is used to measure customer loyalty and contentment with a business. Customers answer: How likely is it that you would refer this company or product to others? NPS helps companies enhance service, customer service, quality, and more so that customers remain loyal to them.
Why E-Commerce Analytics Is Crucial for Your Store’s Success
With e-commerce analytics, you can do the following:
Learn What Prevents Sales from Occurring
E-commerce businesses can identify the factors that hinder sales. Using e-commerce analytics, you can determine whether consumers are influenced by product prices, for instance.
In addition, customers may abandon their carts when they see additional expenses, including shipping charges. The absence of coupon codes can also make them change their minds during checkout. You will be able to make the necessary adjustments after identifying these patterns of behavior. You should keep in mind being transparent regarding prices and charges will encourage customers to have a good shopping experience and buy from your business.
Improve Your Products and Services
Without meeting your consumers' expectations, you will have a hard time keeping your business afloat, regardless of how well you price, market, or serve your customers. This is why you should always prioritize making quality products above everything else.
Certain data can help you gain a better understanding of how consumers behave and why certain products do not sell well. It will also show why certain products perform well. With timely data on crucial metrics, e-commerce reports can help business owners of online stores improve their product offerings.
Analyze the Performance of Your Store
Using e-commerce analytics means gaining a comprehensive understanding of your store’s overall performance. By keeping track of vital metrics, you can make informed decisions and increase profitability.
Best Practices for E-commerce Analytics
To achieve your desired results, you’ll have to observe some best practices.
Analyze with the Right Tool
Tracking all the data that you need manually is not just difficult; it’s practically impossible. You will need extra help in monitoring metrics, such as cart abandonment rate and churn rate, and then putting them all together in a clear, understandable manner.
Sure, you can try doing manual dashboards, but expect tracking to become a nightmare, especially if you have to do this on a regular basis. Worse, by the time you have set up your manual dashboard, it will be outdated by then.
It's imperative that you use an e-commerce analytics tool that generates metrics and KPIs that meet industry standards. Your analytics tool should provide data insights on merchandise, sales, and consumers in the form of predefined KPIs.
Streamline Data Collection
Data centralization can be beneficial for a number of reasons. Ultimately, this helps you gain valuable insights, streamlines your reporting, and improves efficiency.
The collection, analysis, and organization of disparate data are likely to take more time and energy on your part. That’s why businesses need trustworthy tools that aggregate data from their entire e-commerce operations. A streamlined platform, along with the right tools, will enable you to analyze business operations, products, and campaign results better, resulting in more informed decisions.
Be Constant in Your Testing
When crafting a marketing strategy, there’s no one-size-fits-all approach since not all strategies are appropriate for every business. Every e-commerce store needs a unique strategy to cater to specific customer types. Through continuous testing, marketing campaigns can be made more effective.
Gather and analyze customer data with the help of e-commerce analytics tools so that you can make better decisions. It’s like operating the dashboard of a plane. Just as a plane needs to land and refuel, your business needs indicators so that you can effectively monitor its performance.
You shouldn't become just a passenger while running your own business. Take the pilot's seat by using the right tools and measuring what matters. As a result, you’ll find it easier to make smart decisions and keep your business running smoothly.