A Guide to Ecommerce Analytics to Drive Business Growth


What Is Ecommerce Analytics?

Ecommerce analytics is the process of collecting, analyzing, and acting on website data from your online store.

It helps you get smarter about your customers and your competitors. So you can make the right decisions to improve your business.

For example, you can optimize your traffic channels, uncover and address problem areas, and refine your checkout process to potentially drive more sales.

Benefits of Using Ecommerce Analytics

Here are three main benefits of using ecommerce analytics as part of your business process.

Enhances Understanding of Your Site Visitors

There’s data to analyze at each stage of the customer journey. And you can use your analysis to ensure every step is tailored to their needs and wants.

For instance, you can gather ecommerce data about how visitors arrive on your site, how they engage, what happens as they move through the checkout process, and what they purchase. 

Improves Customer Experience and Retention

Ecommerce analytics can help you uncover what’s holding your site’s performance back. So you can design better customer experiences that lead to longer, more engaged visits—and possibly more sales. 

Plus, positive experiences build trust and retention. And nearly half of consumers (46%) tend to shop more from brands they trust.

Increases Operational Efficiency and Cost Reduction

Ecommerce analytics lets you identify your best-performing traffic sources for online sales. And you can use that information to allocate your advertising budget more effectively—spending where it’ll likely generate the most purchases. 

Plus, you can find areas where you can eliminate unnecessary costs.

Different Types of Ecommerce Analytics

We’ll review four distinct categories of ecommerce analytics based on the natural progression of online customers—from first arriving on your site to completing a purchase. 

Each category corresponds to a specific stage of the sales funnel. And focuses on important metrics to understand how that part of the funnel is performing.

Let’s cover each category and some relevant key metrics.

A graphic of a funnel showing 4 types of ecommerce analytics that are mapped to the stages of the website conversion funnel

Marketing Analytics

Marketing analytics involves tracking your ecommerce store’s traffic sources.

Metrics like conversion rate and return on ad spend (ROAS) can help you measure the effectiveness of your marketing. So you can budget accordingly and choose what traffic sources to focus on.

Visits

Visits (called “sessions” in Google Analytics 4) is how much traffic comes to your website. And you can see how it varies by channel to determine which ones are most effective at driving people to your site.

Conversion Rate

Ecommerce conversion rate is the percentage of all visits that end in a purchase.

To calculate conversion rate, take your total number of purchases and divide them by your total visits (or sessions). Then, multiply by 100.

Conversion rate calculation formula

Let’s look at Google Analytics 4 (GA4) data for the ecommerce business example below. 

The site has an overall conversion rate of 1.34% (9,293 purchases / 693,131 sessions), but we see considerable differences across traffic channels.

Google Analytics traffic acquisition report with channel, sessions, and purchase even count columns highlighted

This business might decide to reduce its paid search ads budget, as it only has a 0.08% conversion rate. And reallocate resources toward growing the email database because the email channel has a 4.32% conversion rate. 

Return on Ad Spend

For paid advertising campaigns, ROAS helps to measure profitability by dividing the total ecommerce sales by the paid media cost.

Below are three Google Ads campaigns. Only one of them has a ROAS above 1.0—meaning two campaigns cost more in media than what they generate in revenue. Which makes them unprofitable.

Google Ads campaigns report with campaign and ROAS columns highlighted

This business might decide to turn off all paid search activities. Or at least stop the campaigns with a ROAS below 1.0.

Engagement Analytics

Engagement analytics enable you to study how well your site converts visits into product page views. And you want to make it easy for visitors to begin the shopping process.

A fast-loading website that’s easy to navigate and well-organized plays an important role in encouraging your visitors to engage. And bounce rate helps you measure this.

Bounce Rate

A bounce is a session where your visitors don’t engage with your website. The most common example of a bounced session is when a visitor only views a single page before leaving.

And a high percentage of these sessions—meaning a high bounce rate—often indicates issues with your visitors’ website experience. And fewer purchases.

Average bounce rates vary by industry. But in general, a bounce rate of 40% is considered good—and 60% or more isn’t.

GA4 data for the ecommerce store below shows a sitewide bounce rate of 49.42%. With considerable differences between some of the top landing pages. 

It would make sense to compare and review your best- and worst-performing pages for bounce rate. Like “/Collections/Stationery” (35.95% bounce rate) and “/Collections/New” (56.39%).

Google Analytics landing page report with bounce rate metrics highlighted

Look for possible differences in page load time and design approach—which may contribute to the bounce rate variance. Consider what elements might be working on the “/Collections/Stationery” page. Implement them on the worst-performing page and monitor whether those changes lower its bounce rate over time.

As your site’s bounce rate improves, you’ll likely have more visitors navigating deeper to the product pages. Where they can shop.

Which leads us to another relevant metric: 

Product Page Views

This metric is simply how many visits (or sessions) included a visit to a product page. And that’s important. 

Why?

Because if visitors don’t view a product page, they don’t have a chance to make a purchase. 

You can then compare that to your total number of visits. To compare it to the average percentage of sessions on ecommerce sites with a product page view—43.8%

Checkout Performance Analytics

Checkout performance analytics entails reviewing how customers shop and move through the checkout process. And you want to make it easy for them to add products to their carts and move forward.

Add-to-cart rate is a critical checkout performance metric to track and optimize.

Add-to-Cart Rate

This is the percentage of website visitors who add a product to their shopping carts. 

For example, you get 1,000 site visitors during a given time period and 95 add an item to their carts. Your add-to-cart rate is 9.5% (95 / 1,000).

The average add-to-cart rate is around 8%, but it varies by industry. So it’s important to set goals by benchmarking against your own industry—and especially against your historical performance. 

Let’s say your site’s average add-to-cart rate is 9.5% over a one-year period. Then it drops to 8.25%. 

If you benchmark against the overall ecommerce industry of 8%, you might think things are good and stop your analysis. But when you compare with your own past performance, you know there’s something you need to diagnose and fix.

The GA4 purchase journey report below helps you visualize shopping performance. We see add-to-cart activity in Step 3. 

Purchase journey report in Google Analytics with metrics highlighted

This website has an add-to-cart rate of 6.15%. Because 31.2% of sessions include a product view (Step 2), of which 19.7% include adding an item to a cart (100% * 31.2% * 19.7% = 6.15%).

If you see your add-to-cart rate dropping, consider adding customer testimonials, more appealing imagery, and more prominent calls to action. And compare your pricing against competitors to make sure you’re not pricing yourself out of relevancy for your customers.

Sales Analytics

Sales analytics looks at quantitative and qualitative customer data from completed sales. You can analyze data from completed purchases to see your online store’s sales performance over time. 

Plus, you can review product-level sales to know what individual items drive overall company sales growth. Like in this example GA4 report:

Ecommerce purchases report in Google Analytics with item name, items purchased, and item revenue columns highlighted.

You can use the top-selling items as ideas for products to feature in your blog posts, paid and organic social posts, and email marketing content. And identify slow-selling candidates for future price reductions to help you move inventory.

Here are a few concrete metrics to consider:

Average Order Value

Average order value (AOV) is the average purchase amount of each completed transaction. Which you can compare against your main product’s prices.

For example, let’s say your AOV is $50 but your flagship product is $80. That indicates you should work to increase your AOV. 

You might try to do that by showing suggested products on related pages. Or offering discounts for shoppers who bundle items. 

Sales Revenue

This is the amount of revenue you generate through selling products. And it makes it clear whether you’re reaching your goals. 

It’s always a good idea to compare actual sales versus your original forecast. So you can adjust your expectations about what inventory you’ll need to build (for your brand) or buy (if you’re a retailer) in the future.

How to Analyze Ecommerce Data: 5 Best Practices

To enhance your ecommerce performance over time, collect accurate data from your online store for review. Then, fine-tune your efforts and processes accordingly.

Let’s look at how to analyze your ecommerce data effectively.

1. Determine Your Ecommerce Analytics KPIs

You assess your ecommerce website’s performance with quantitative measurements called metrics. So you can refine your strategy in line with your business objectives.

Strategically important metrics are called key performance indicators (KPIs). These metrics directly measure how a business progresses toward its goals. 

It’s a good idea to collect quantitative data from the four types of analytics we outlined above. And establish at least one KPI for each.

KPIs apply across all industries. And can vary from one organization to another according to their specific goals. 

Let’s look at an example for an ecommerce business.

You have an ecommerce store selling home improvement supplies. You get 2 million online visits each year, 2% of which result in a sale—meaning 40,000 purchases. And the average order value is $100.

Spreadsheet showing business metrics like visits, purchases, AOV, conversion rate, and sales

Your goal is to increase annual sales by 20%. 

So, how will you grow from $4 million to $4.8 million? You can choose to:

  • Drive more traffic to your website
  • Increase your conversion rate
  • Increase your AOV

You recently launched new website functionality that recommends cross-sell opportunities as your customers browse related products. And you expect the cross-sell items to generate more sales from each transaction.

That prompts you to choose AOV as your KPI. 

A 20% growth in sales is possible by raising your AOV from $100 to $120. So, you establish $120 as your AOV target. 

Spreadsheet with business metrics comparing variance in benchmark and goal values

In this case, your KPI is based on your company’s historical performance and future sales objectives. But you can also use competitor data and industry averages as benchmarks to set KPIs.

Let’s say you’ve identified conversion rate, website visits, and bounce rate as your KPIs and you need to determine goal numbers. Use Traffic Analytics for this.

It allows you to see each of these metrics for a competitor just by entering their domain into the tool.

Semrush Traffic Analytics report with Visits, Purchase Conversion, and Bounce Rate metrics highlighted

2. Set Up Effective Data Collection Systems

Before you can perform an analysis of your online store, you’ll need a collection plan to obtain the relevant data.

Consider the size and capacity of your ecommerce team. To ensure you have the resources to analyze and act on the data gathered.

Use tools like GA4 (or a Google Analytics alternative) to track your ecommerce metrics and KPIs.

Also plan to collect qualitative feedback via product reviews, surveys, and any other text-based responses from your customers. As well as One2Target (more on this below).

3. Analyze Quantitative Data

Plan to make efficient use of your data by regularly measuring progress toward your set goals. And determine a cadence for rigorous, focused review. 

This type of disciplined approach helps you focus on what matters most: improving your ecommerce store based on your quantitative analysis.

Also, create a plan of action for how to respond when your KPIs don’t reach your targets—or if they exceed expectations. 

For example, you have a conversion rate target of 2%. And you observe a 4% conversion rate from your top-converting paid traffic source but a rate of just .5% from your worst-converting traffic source.

Based on this, you might take action by shifting your budget from the top-converting channel to the worst-converting one to improve your overall rate. 

Or perhaps your add-to-cart rate is 6.5% but your goal is to reach 8%. So, you decide to test adding customer reviews to your product page. 

4. Dive into Qualitative Insights

Some of your most important data will come from what your customers tell you. Including information or feedback your call center might collect.

Here are three important ways you can benefit from evaluating qualitative insights:

  • Uncover frustrating parts of the online shopping experience that you can fix to boost customer satisfaction and sales
  • Generate insights for future product development based on your customers’ likes and dislikes. So you can then broaden, limit, or reduce, your online store’s offerings.
  • Establish trust with your customers by proving you care about their perspective. Because consumers tend to buy more from brands they trust.

If your customers are talking, you should be listening. You’ll identify feedback and trends you can address to meet buyer needs and increase customer loyalty. Ultimately delivering better business results.

But don’t stop there. You can also uncover insights about your larger target audience using One2Target. Including demographic information that might inform your marketing and sales strategies.

A Guide to Ecommerce Analytics to Drive Business Growth

5. Embrace Continuous Improvement

With the proper mindset, you can continually use ecommerce analytics to deliver on your business goals. 

For instance, you can test the color and size of your add-to-cart buttons during the checkout processes. To see what might make it easier for your customers to convert. 

And you could lower barriers to customer engagement by developing a fast, friendly, and accessible website. With responsive page design containing calls to action.

You can even make your marketing budget go further by optimizing your spend across the most efficient conversion channels.

All of these initiatives take hard work—and data—to develop over time. And there are changing seasonal patterns, evolving customer preferences, and new trends to account for.

Embrace the fact that you’ll never be “done.” Ecommerce performance analytics is a journey of continuous improvement.

Further reading: 8 Tactics to Add to Your Ecommerce Growth Strategy

Traffic Analytics

Analyze your competitors’ ecommerce data with Traffic Analytics to see how your online store compares.

Enter the domain name of a rival business. Then, click “Analyze.”

Semrush Traffic Analytics tool start with domain and Analyze button highlighted

You’ll instantly get valuable competitive metrics like visits, bounce rate, and estimated ecommerce conversion rate.

Semrush Traffic Analytics report with Visits, Purchase Conversion, and Bounce Rate metrics highlighted

Scroll down on the same page to see details about different traffic sources.

Traffic Channels by Type line graph in Semrush Traffic Analytics

After you check your primary competitors, you’ll be armed with the competitive data you need to establish realistic industry benchmarks for metrics like bounce rate, conversion rate, and traffic.

One2Target

With One2Target you can learn about your target audience based on your top competitors. 

Enter up to five competitors in the tool and click “Analyze.” 

Semrush One2Target tool start with Competitors and Analyze button highlighted

This way, you’ll learn about the demographics, socioeconomics, and behavior of your target audience.

Here’s a sample of the demographic data:

A Guide to Ecommerce Analytics to Drive Business Growth

Behavior data includes which social media platforms your audience uses.

Semrush One2Target social media distribution report

You can use the above information to prioritize your traffic sources. By choosing to advertise and post organically on the social platforms where you know your ideal customers are already active.

Ecommerce Keywords Analytics

Ecommerce Keywords Analytics compares keyword data across major retailers. So you can analyze your target audience’s search activity, product clicks, and orders to identify trends you can apply to your own business.

Semrush Ecommerce Keyword Analytics report for 'laptop' keyword

For example, you might spot a growing trend in a product category. And decide to create new content around it to give your ecommerce SEO a boost.

Google Analytics 4

Google Analytics 4 is ideal for measuring any interactions that happen on your ecommerce website. As we’ve already seen, GA4 lets you monitor what traffic sources are most effective.

GA4 Traffic acquisition report showing revenue by channel

Further readingGoogle Analytics Traffic Sources: An In-Depth Guide

The tool also shows you how customers engage with your site. And how they move through the shopping process.

GA4 purchase journey report

You can also:

  • Apply UTM codes to the URLs in your marketing campaigns. So you can see data on your individual emails or any A/B tests in your paid social ads.
  • Use Google Analytics for SEO insights. Like the specific searches your visitors conducted while on your website.
  • Get automated notifications when there are data anomalies. Plus access other advanced Google Analytics features.

Turn Your Ecommerce Analytics Insights into Action

Ecommerce analytics can only enhance your online store’s performance to the extent that you take action on the data.

Semrush makes it easier to do just that.

You can collect audience insights to inform your marketing strategy, gather data from top competitors, and more.

Start your free trial today.



Source link

Leave a Comment

Adblock Detected

Please consider supporting us by disabling your ad blocker

Refresh Page