It’s no secret that the eCommerce industry is growing and will continue to grow over the coming years. Analytics data has given eCommerce professionals the opportunity to gain a better understanding of consumer behavior and the driving factors behind consumer purchases. Data and analytics not only helps you make better decisions for your business, but it also helps you build smarter relationships with both customers and business partners alike.
When running an eCommerce business, every advantage you can get could mean the difference between your online store struggling to survive, and one that vivaciously thrives. Odds are, your ultimate goal is to grow your business, and the close inspection and manipulation of your data analytics is one of the eCommerce strategies that can give you a huge advantage over your competitors.
The biggest benefit of paying attention to your analytics is predictable growth, as opposed to spraying and praying that the latest eCommerce strategy works. However, all of this information is only useful if you know how to analyze, understand, and take action based on data.
What Are eCommerce Data Analytics?
ECommerce analytics are all of the bits of data used to identify and explain consumer behavior as well as relevant trends that can result in shifts in those behaviors. Using eCommerce data, a business can track the customer journey and gain a more comprehensive view of what drives revenue. Based on this knowledge, an eCommerce entrepreneur can make better decisions that result in a direct impact on the number of sales in their online store.
Why Understanding Analytics is the Most Important of All eCommerce Strategies
Using data provides your business with better opportunities for managing all the different phases of inventory including:
- Vendor management
- You’ll be able to answer questions like, “Are my customers happy with my vendor choices?”
- Is the quality of your materials adequate for your customers?
- Do customers purchase your goods closer to holidays like Christmas or Mother’s Day, or is this an everyday item that you need to keep stocked when you can get basement-bargain pricing?
- Can customers get it cheaper somewhere else (i.e. you need to price compare to stay competitive)?
- Is the feedback on delivery times good or is there room for improvement?
Analyzing your data is also a great way of enhancing your marketing efforts, deeply understanding customer expectations, and detecting when things go awry.
Most importantly, the data you gather will help you in understanding the full customer journey through the phases of:
Using data analytics allows you to understand more about the people that have discovered your online store. Some of the information you'll attain will entail:
- Languages that they speak
Audience data will also provide you with meaningful information about the devices or pieces of technology your audience uses. This information can help you determine the best avenues for your audience to discover you. Marketing your services and products to the right people becomes much easier when you know where your ideal consumers are hanging out, where they live, and how much money they make.
With all the different eCommerce strategies you will implement, acquisition data expands further on how users found your online store. Typically, at the acquisition stage, you’ve not only managed to get your store on a prospective customer’s radar, but they have opted into an email list or some kind of notification for the purposes of a sales offer, a freebie, or some other lead magnet. With acquisition data, you will also learn more about the success of the various different marketing channels you have been using.
For example, acquisition data enables your business to know about the different marketing channels that are working, and the ones that aren’t performing as well as you would like them to. Suppose you’re implementing paid marketing materials such as Facebook ads. Acquisition data about your paid activities can paint a better picture of the true return on investment of your campaigns. This will tell you if you should double down on your paid efforts or if you should focus more on things like search engine optimization, social media marketing, or some other form of promotion.
Conversions are the online users who end up becoming your paying customers after visiting your store. Your conversion data lets you know things like:
- How long it took to make a purchase (i.e. the amount of time users spend on the page before adding something to their sales cart)
- The duration of the sales process
- Average sales made (i.e. how much money the typical buyer spends)
- Abandon cart rate and more
If your users leave the page quickly rather than scrolling through your product listings, consider looking into the speed at which the pages load. Another option might be to simplify your sales copy so that your user doesn’t have to read a bunch of text to make a buying decision. Improving tiny details like this within your online store can improve your user experience, potentially leading to additional sales.
Your conversion information tells you when you gain the most sales, and helps you to better understand where the bottlenecks in your sales process are. This can help you decrease the window of time it takes a visitor to go from idle shopping to actual purchase. The higher your conversion rates, the more money you’re making.
Your goal once you’ve had a user discover your store, and have converted them into a customer is to retain them. After all, it’s much easier to retain a current customer than it is to acquire a new one. The knowledge you glean from your analytics can help guide you on the best methods of retention.
For example, if what caused the conversion from idle visitor to paying customer was a coupon or discount code, perhaps all you need to do is send another special offer to that customer to get them to buy again. Or if you find it was the speediness with which you expedited their order, an offer for a shipping upgrade to receive it even faster could be the best method of earning another sale.
Believe it or not, your analytics can even help you turn your customers into your most loyal brand advocates. Clients that are repeat purchasers are giving you valuable data about what it is they love about your online store. This is the perfect opportunity to reach out and provide special offers such as referral codes and links to earn freebies and perks based on the information you’re gathering. For example, if you have a customer in the Pacific Northwest that is making repeat purchases and you want to acquire more customers in that region, they are the perfect candidate to pitch a mutually beneficial offer to. They send more potential customers, you give them discounts and freebies - it’s a win-win!
The Benefits of eCommerce Analytics Are Plentiful
We’ve covered a lot in this post, but we want to reiterate that the benefits of your gathering and understanding your eCommerce analytics are plentiful. They include but aren’t limited to:
- Effective inventory management
- You’ll have a better idea of how many products to stock throughout the year
- Advertising spend/trends
- You’ll have concrete data related to what’s working and what’s not
- Return on ad spend
- There’s no need to second guess your ROI when you have hard numbers to go off of
- Increase product effectiveness
- Instant and repeat buyers tell you that you’ve got a good thing for sale
- Product performance
- You’ll have a better understanding of which products are performing well and why
- Customer behavior/habits
- You’ll know what makes for a good user experience, and what prompts a purchase
- Seasonal changes and shopping habits
- You’ll know if certain holidays lead to spikes or massive decreases in sales
- Imagine being able to forecast when you’ll have an influx of revenue, and when you’ll need to tighten your purse strings
- Retention trends
- You’ll learn how best to go about retaining a customer
- Understanding the customer lifecycle
- From visiting to purchasing, pricing to shipping, eCommerce analytics will help you understand exactly what it takes to achieve customer satisfaction
Because technology and shopping trends evolve rapidly and daily, it's essential to use eCommerce analytics to avoid fumbling in the dark. Using eCommerce analytics allows companies to anticipate changes within the market using reliable data.
Using eCommerce analytics enables your company or business to generate comprehensive and complex datasets about client behavior. Picking the right eCommerce analytics tools can assist the business in having an immeasurable advantage over the competition. Click here to learn about SellerSpike, and how it can help you develop eCommerce strategies for the level of growth your business deserves.