What is ecommerce analytics and how can you use it to grow your business

The global ecommerce market is expected to be worth $6.3 trillion in 2024 – up from $5.8 trillion in 2023. This continuous growth makes ecommerce one of the most competitive industries. The heightened competitiveness has pushed businesses to find ways to gain an edge over their competitors. The best option they have is turning to what’s readily at hand – vast amounts of data shared by customers.

A thorough grasp of the large data volumes generated by customer activity in your ecommerce operations is critical to determining what works for customers and what doesn’t. This is especially important given that the average cart abandonment rate for online shopping exceeds 70%, presenting both a massive challenge and opportunity to ecommerce strategies.

Ecommerce analytics empowers you to better understand your customers’ actions and increase profits. The key is to collect the right data, draw granular insights about your audiences, and put those insights to work. With this powerful tool at your disposal, you have the control and capability to steer your business towards success.

Today, we will discuss using ecommerce analytics to create more effective campaigns, increase sales, and strengthen your brand’s position.

What is ecommerce analytics

Ecommerce analytics involves collecting and analyzing data from an online store to inform business decisions. This process consists of tracking different aspects of the customer journey, including discovery, acquisition, conversion, retention, and advocacy.

These metrics relate to sales, customer behavior, and site performance, providing insights to optimize marketing strategies, improve customer experience, and increase revenue. By gathering and analyzing data from multiple sources, ecommerce businesses can understand their store’s performance and identify the business aspects they should optimize.

Why is ecommerce analytics important

Ecommerce analytics gives businesses the tools to apply business-specific insights to their processes and keep growing in the highly competitive and continually evolving ecommerce industry.

They can use the collected data insights to:

• Understand which channels bring the most customers and optimize their marketing budget and investments accordingly.
• Learn which customer groups spend the most money and what they typically purchase, and target them with custom offers.
• Discover which customers are least likely to make a second purchase and why, and develop an appropriate customer retention strategy.

What types of data can you analyze through ecommerce analytics

Ecommerce analytics allows you to gain insight into different aspects of your business:

Audience

Data about your audience helps you understand your target group’s demographics and interests. You can connect this information with your customers’ behaviors and tailor your offers to their needs, making them feel valued and understood.

Your audience data may consist of the following information:

• Income
• Occupation
• Geographic location
• Languages spoken
• Device

You can use this data to:

• Fine-tune your customer persona and determine the pain points you need to address.
• Plan and adjust your shipping options and ads based on your audience’s locations.
• Offer product recommendations based on your audience’s device type.

Acquisition

Acquisition data informs you about the sources and channels that bring traffic to your online store and result in conversions. You can learn how visitors discover your business, which lets you improve your marketing strategy and attract more potential buyers.

Here are some customer acquisition metrics to keep in mind:

• Click-through rate (CTR)
• Cost per lead (CPL)
• Cost per acquisition (CPA)

When using acquisition data, you can discover which marketing channels drive the most traffic and lead to the highest conversions and sales. You can see which online marketing channels are the most effective and which aren’t working. This data is crucial in understanding where to focus your resources and what future campaigns to plan.

Behavior

Insights on customer behavior open up a world of opportunities. They let you deep-dive into shoppers’ actions and interactions in your online store, shedding light on shopping stages, product preferences, and loyalty. You can measure and analyze purchase data to learn when and how your audience members tend to convert. Behavior analytics also helps you discover how to improve user experience to boost engagement and conversion rates.

Some metrics you can track here include:

• Sales conversion rate
• Average order value (AOV)
• Cart abandonment rate
• Revenue
• Cost per conversion
• Return on ad spend

Here are some questions you can ask to get an idea of your customers’ behavior:

• When do visitors tend to drop off from their journeys?
• How many viewers leave your website straight away?
• What pages do people visit first after landing on your site?
• What marketing content do users consume the most?
• Which products get a lot of traffic but few sales?
• Which products bring the most revenue?
• How long does a typical shopper take before they make a purchase?
• How often does each shopper buy from your store?
• How many customers abandon their shopping carts?

Ecommerce features in Piwik PRO

In 2023, we launched a new ecommerce setup with several enhancements to improve your online store’s reporting.

Apart from dedicated ecommerce reports, your store can benefit from other useful features:

Product scope

Product scope is available in all reports, including custom reports, web APIs, and raw data, in addition to the session and event scopes. Product scope lets you use dimensions and metrics related to products to give you more precise reporting and a deeper understanding of your product performance.

New dimensions and metrics

You can benefit from several new dimensions and metrics that will help you better analyze your online store data. For example:

• Product detail views show how many times shoppers viewed the product detail page.
• Cart-to-detail rate shows how product details affect cart additions.
• Order-to-detail rate shows how product details affect product sales.

Sample use case for order-to-detail rate

The order-to-detail rate is calculated as Orders / Product detail views * 100%.

You can compare it for various products based on their details.

If the rate is low, meaning there are many product detail views but few orders, you may need to improve the product images, adjust the description, or make other changes.

Or, you may see that the rate is higher for a specific product color, suggesting that you make that product version the principal one.

How can your business benefit from ecommerce analytics

Ecommerce analytics will show you trends and patterns in data, allowing you to:

• Understand your customers’ interests and product preferences – With this knowledge, you’re able to optimally position your products and support customers’ purchasing journeys. It also lets you optimize your inventory and influence your marketing efforts.
• Optimize pricing and inventory – You get a granular picture of what drives pricing for every consumer segment. Use this insight to discover the best price points at the product level rather than category level and gradually increase revenue.
• Measure the effectiveness of marketing campaigns – You can gain detailed insight into your marketing performance across channels. This lets you monitor all your campaigns and react quickly to adjust your activities if needed.
• Improve customer retention and loyalty – You can analyze customers’ past behaviors and purchases to better understand their interests and the choices they make when they buy your products.

How to analyze and improve the performance of your ecommerce store

The details of what data you collect and analyze will largely depend on your business goals and the specifics of your company.

Below, we present a sample process for gathering insights that would become a foundation for more in-depth analyses.

Acquisition

The acquisition report gives you a base for exploring your data by providing an overview of channel and campaign performance. It will help you understand how users find your website and how they behave.

Here are some questions you can try to answer while looking at the data:

• What is the split between different traffic sources?
• Which sources bring in the most traffic?
• What keywords do people use to find your website?

Channels

You can now see in more detail how people from different channels behave and go through the shopping process.

For each channel, analyze metrics like:

• Bounce rate
• Cart abandonment rate
• Total revenue
• Average order value (AOV)
• Product detail views
• Cart-to-detail rate
• Order-to-detail rate

With this analysis, you can determine which channels bring the most revenue and which are underperforming. You may discover channels with hidden potential, giving you an idea of the types of campaigns you should invest in more.

For example, you may find that email brings the highest average order value despite having the lowest number of visitors. Consider allocating more resources to email campaigns or broadening your email audience.

Landing pages

Another aspect is landing page performance.

For each landing page, analyze the following metrics:

• Number of page entries
• Bounce rate
• Order rate
• Cart abandonment rate
• The sum of revenue
• Average order value (AOV)

For example, you may find a product landing page with many entries that has a high bounce rate, low order rate, and low revenue.

To investigate the possible causes, determine which channels bring the most traffic to this page. If it’s paid campaigns, review the different aspects of ad configuration and assets you should adjust – such as product descriptions, images, alignment between the ad and the landing page, and so on.

Paid campaigns

Next, evaluate the performance of paid campaigns to assess whether the revenue is higher than the ad spend.

For each campaign, check metrics such as:

• Cost
• The sum of revenue
• Average revenue
• Return on ad spend (ROAS)

Product categories

Additionally, you can find out which channels drive traffic to specific product categories.

For each product category, check:

• Channels
• Sessions
• The sum of product revenue

Shopping behavior

The next step involves analyzing customer journeys on your website.

For example, in Piwik PRO, you could create a funnel to get an overall picture of the shopping behavior:

Focus on analyzing the number of users who drop off at each step. To benchmark, you can compare the current numbers with results from the previous period.

For example, you may discover that many people leave after adding a product to their cart. You should then investigate the reasons for the increased cart abandonments.

For that purpose, evaluate the pages users visit before abandoning their carts. If they abandon their carts while on the checkout page, it may indicate the page is difficult to navigate or lacks usability.

You can dig deeper into the checkout process by analyzing a sample funnel report showing the checkout steps:

This will allow you to analyze the drop-off points and learn which ones create friction.

Additionally, you can optimize your product pages.

One point of your analysis could be checking the number of product detail views and order-to-detail rates.

For example, a product page that gets a high number of product detail views and a low order-to-detail rate indicates an issue. Analyze your heatmaps to determine what users view on the page, where they scroll, and other aspects of their behavior.

When analyzing the performance of product pages, you should also consider internal search. See what phrases people look for and whether they correspond with any of your products.

How to use data activation in ecommerce

Effective data activation for an ecommerce business requires the right tools. Customer data platforms (CDPs) allow you to integrate data from your CRM, email software, marketing automation tools, analytics, etc. For example, you can import offline conversions from your physical store. On the other hand, you can activate the audience segments using different tools in your stack, such as ad networks, marketing automation platforms, and A/B tools.

There is a range of goals you can achieve through data activation, such as:

• You can increase your revenue by:

• Offering free shipping to first-time customers.
• Providing product recommendations based on products or services that users show interest in.
• Crafting unique purchasing journeys for different customer segments based on their shared traits.

• You can personalize the customer experience by:

• Retargeting users with ads they are most likely to respond to.
• Showing personalized content to users based on the content they’ve consumed.
• Sending customized email campaigns based on users’ purchase history.

• You can improve customer retention by:

• Uncovering customers who haven’t purchased in a while.
• Recognizing potential cross-selling and upselling opportunities using data about previous behaviors and purchases.
• Retargeting users who abandoned their carts.

Since a customer data platform utilizes first-party data, you can control where the data comes from and what happens with it. This helps you better align with privacy regulations.

Privacy compliance in ecommerce analytics

Safeguarding customers’ data and respecting their privacy has become a new standard. The emphasis on privacy and security stems from the growing number of data privacy regulations, higher consumer awareness, and increasing enforcement of regulations.

Ecommerce compliance means adhering to the rules governing ecommerce activities in the markets you sell in. These include but are not limited to ecommerce regulations per se, data privacy regulations, online payment standards, accessibility norms, and the avoidance of dark patterns.

Ecommerce privacy regulations

The focal point of data privacy regulations is processing personal data and protecting consumers’ privacy online. Since your ecommerce regularly deals with all kinds of personal data, understanding and complying with applicable laws is a must. Check what regulations apply to your business, whether laws affecting specific countries, like German TTDSG/TDDDG or French CNIL’s guidelines, or laws with a broader application, such as GDPR, the Digital Services Act (DSA) or the ePrivacy directive.

Privacy-oriented technological changes

The ecommerce landscape is also being affected by technological shifts. The most notable event is the end of retargeting ad campaigns as we know them due to the deprecation of third-party cookies.

To adjust to privacy-facing technological changes, take the following steps:

• Choose privacy-conscious tech providers that build their tools according to privacy by design and privacy by default principles.
• Ensure the tools you use offer features that allow you to respect visitors’ choices or to anonymize data.
• If you run a business in the EU, consider choosing EU-owned and -based tech platforms.
• Prioritize first-party data sources, which means collecting data using your own sources.

Best practices for ecommerce analytics

Below we’ve prepared some tips for getting your ecommerce analytics right.

Take a holistic approach to the customer journey

The concept of a holistic customer journey highlights the complex and diverse ways customers engage with brands. You should view different metrics as components of a bigger picture.

Your goals in ecommerce analytics should be to:

• Reduce friction points along the customer journey.
• Increase the customer’s motivation to buy.

You can achieve these by offering a straightforward user experience and helping people complete their selected tasks.

Respond to the expectations of online shoppers

Understanding why people shop online instead of going to a physical store can help you dedicate resources to the most critical areas of your business.

For example, users appreciate online shopping for:

• Being able to shop anytime – Make sure your website and app work seamlessly on different devices.
• Being able to find their product quickly – Ensure the journey to purchasing a product is smooth and quick. Adjust your purchase process to remove any unnecessary or complicated steps.
• Being able to choose from a wide range of products – Find out what products are the most popular with your visitors and which ones they are looking for. See how to adjust your offer to let them buy more of what they need.

Define your KPIs

Defining and tracking the right KPIs is crucial to your ecommerce analytics strategy. Marketers should establish performance indicators specific to every step of the customer journey and evaluate the success of their activities based on these metrics.

For example:

• In the consideration stage, you want to learn more about user behavior and observe patterns to plan improvements and get more sales. Consequently, your KPIs here could include engagement rate, bounce rate, returning visitors, and cart abandonment rate.
• In the purchase stage, you want to convert more users into buyers. Hence you may track metrics such as orders by new vs. returning customers, average order value by channel, revenue by product, and customer lifetime value (CLV).

Integrate the components of your analytics stack

Integrating your data lets you work on accurate, in-depth data sets and apply the insights you’ve gained to benefit your business. You’ll gain a comprehensive understanding of your customers and take action to drive more sales, improve customer retention, and optimize your store to provide a better user experience.

With an integrated analytics platform, you can connect ecommerce data from all your sources with analytics data and make it available to different teams. When choosing the right platform, ensure it meets your teams’ needs, doesn’t strain your resources, and offers a scalable solution that can grow with your business.

Join the dots between your customers and the data

Marketing tools often provide excessive amounts of data – don’t fall into the trap of gathering as much data as possible. You need to have a purpose for every piece of data you collect. Data becomes valuable when you correlate the numbers with your customers. Looking at data in isolation can lead to errors by obscuring the bigger picture.

Adjust data for seasonality and other trends

Analytics lets you uncover trends, identify patterns and discover seasonality. It allows you to better understand your business’s current performance and how it can potentially look in the future. This, in turn, lets you make more accurate business forecasts that can inform your future actions.

Monitor your product performance over time

Tracking product category and individual product performance over time will enable you to discover your biggest revenue drivers and what you should invest in. It’s a great place to begin if you want to find out what products are performing well and which aren’t doing as well as anticipated.

Conclusion

Ecommerce businesses deal with uniquely large volumes of data. However, many truths are the same for organizations in all industries that rely on analytics. Specifically, the road to success is paved with understanding which data points are essential and using that knowledge to continuously improve customer experience.

Interested in learning how Piwik PRO Analytics Suite can help your ecommerce business surface valuable insights?