E-commerce analytics tools are not all created equally, but they do provide you with the ability to understand and utilize the data that is being collected on your website.
To make the most of your budget, you need to know how to use these tools correctly.
E-commerce analytics is the method of using data to make data-driven decisions to drive your online sales.
It calls for gathering data from all channels that influence your online store and using it to understand trends and shifts in consumer behavior.
This form of analytics includes metrics across the entire customer journey – from discovery to conversion and even retention.
eCommerce analytics companies can use advanced analytics and reporting tools to enhance operational efficiencies and drive customer engagement.
The most commonly seen classifications of e-commerce sales are furniture, toys, food and beverages, electronics, and groceries.
In 2021, the global e-commerce retail sector was valued at $4.9 billion. In 2025, it is forecast to grow at a CAGR of 13.25% to $7.4 trillion.
Here are some important principles to help you optimize your e-commerce marketing and analytics. While these principles are useful, it is important to remember that there are many analytics tools available.
Each one has its own set of benefits and disadvantages.
1. What is the right tool for my business?
This answer varies by industry, goal, and budget. To help you decide, we’ve put together this primer on what you need to know about the key principles guiding eCommerce analytics tools.
2. How do I select the best tool for my needs?
There are many considerations when choosing an analytics tool for your business, including what analytics tool is best for you.
There are several popular business intelligence and analytics software platforms that can be installed on your local servers or purchased as cloud-based solutions.
Two main considerations that should be the guiding principles are:
- The complexity of your goals
- Your budget
E-commerce analytics tools help you analyze your website traffic and conversion rates. These principles will help you make a more informed decision on which tools to use.
One of the most popular analytical tools out there that all of you have used at some point is Google Analytics.
Some businesses use e-commerce analytics to see which of their products are the most popular or to track customer behavior.
E-commerce Analytics can Help Understand What Customers are Looking for
The eCommerce analytics tool is software that an online business owner can use to track and measure customer behavior.
This can help you understand what customers are looking for in the product catalog, where they are coming from, and what they are doing.
E-commerce analytics tools can help gauge how the website is performing. Many e-commerce analytics tools include features to track customer behavior and measure the effectiveness of marketing campaigns.
Ways to Use Data, Like Targeted Marketing or Customer Service
For e-commerce merchants, data is an important asset. In fact, it's so valuable that the right analytics tools can make or break your business. But understanding what to look for in a tool is key – you want to know how you'll benefit, but also how valuable it is to your business.
Many different types of analytics tools exist for e-commerce websites, and these analytics tools can help you learn about your customers, their buying habits, and what they want from your website.
Analytics is Not One-time; It is a Continuous Process
If you are developing your company's marketing analytics, don't think it is a one-time thing.
Marketing analytics is a continuous process that needs to be revisited and refined.
Benefits of E-commerce Analytics
There are several insights that eCommerce analytics helps obtain. These are User behavior data, product data, and marketing data.
Thus, user behavior data provides details about consumer behavior during purchase and throughout the checkout process. The shopping behavior report will give you insights at every step of the purchase funnel.
From the first view of your products to moving some of them to the shopping cart and checkout, the entire customer journey is mapped and reported on. This gives you a clear idea of how your visitors move through the funnel, helping you identify weak links in your chain.
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E-commerce analytics also helps your business get insights into products and their performance.
It provides insights into the number of products sold over a period, product list views, and product list clicks, all of which support inventory management, cross-selling, and up-selling.
E-commerce analytics helps you with your marketing. Such tracking allows you to monitor internal and external marketing efforts.
You can see metrics such as internal promotion views and promotion clicks, metrics related to the performance of your order coupons against revenue, and track external marketing campaigns such as email campaigns and catalog promotions.
Crucial eCommerce Metrics and KPIs to Track
The following are eCommerce metrics and KPIs that can be tracked with advanced eCommerce analytics tools to enhance various areas of the business.
Sales & Marketing
- CTR
- Conversion
- Add-to-Cart Rate
- Traffic
- Customer Acquisition Cost
- Sales
Supply Chain Marketing
- Order Accuracy
- Refund Rate
- Inventory Turnover
- Gross Profit
Customer Support & Retention
- NPS of Customer
- CLV
- Churn Rate
- Product Affinity
Use of AI and ML in eCommerce
Artificial intelligence enables e-commerce businesses to automate user segmentation and personalization, providing a more customized user experience.
For example, personalized product recommendations can be delivered depending on previous purchases, the user's profile, social activity, and online behavior.
Companies can use sentiment analysis to understand the intent behind product reviews and apply ML-driven algorithms to develop dynamic pricing for e-commerce products to remain competitive in the market.
eCommerce Analytics Best Practices
A lot can be measured in the e-commerce industry, and in some cases, it's very difficult to prioritize among many KPIs.
However, some experienced eCommerce professionals have shared some best practices for eCommerce analytics.
Let's highlight the best practices for eCommerce analytics:
Determine what's required
Every eCommerce store should study its website and customers, stay aligned with its business goals, and determine how to measure KPIs and performance without overlooking the latest trends.
Invest in a suitable data stack
Soon after gaining a clear understanding of which data points to track, the next step is to ensure you are not developing a complex system for collecting and structuring data.
A combined data stack, uniting disparate data from various sources into a single source of truth, such as a data warehouse, can enhance data and decision-making accuracy.
Focus on data quality
To achieve a higher ROI, you have to ensure that eCommerce analytics data is reliable and error-free.
Issues with data quality, such as missing records, duplicate data, or inconsistent formatting, can lead to incorrect insights. This leads to incorrect decision-making, missed opportunities, and misused resources.
Ignoring data quality can minimize the reliability of eCommerce analytics.
The quality of the data can be protected by using valid analytics tools, consistently auditing its origins, and applying data cleaning techniques to remove errors.
Use data legally
Don't neglect security and data privacy practices when gathering and storing user data.
In addition, it is crucial to use collected data ethically and avoid using it unnecessarily.
You need to reassure your customers that you are protecting their data. If your eCommerce business operates globally, it's good to be GDPR and CCPA-compliant.
Prevent data silos
If the data is collected from different sources and is available to individual teams, it won't help.
Data should be centralized and unified so that employees across the organization can access the same data and insights.
Make proper use of data
Most businesses use the information to make all major business decisions.
To do this, you have to ensure that details are shared across the company with all stakeholders. This is possible when unified data is obtainable in a data warehouse.
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How Does Express Analytics Help Improve E-commerce Analytics?
The latest McKinsey study finds that 53% of rapidly developing, high-performance sales businesses are effectively using analytics.
Incorporating an eCommerce analytics tool is a challenge for online stores that want to track their performance and identify the factors that drive or deter sales.
Express Analytics is the most reputable eCommerce analytics service provider in the market. The company can visualize business performance using metrics for products, channels, subscriptions, and consumers.
Get in touch with Express Analytics to learn how we can help your store increase sales with the right data.
