To understand the value of ecommerce analytics, it is useful first to begin with its definition. eCommerce analytics is a business intelligence process that aggregates data points around inventory, products, marketing and customers, that can be interpreted and leveraged to better understand target audiences and effectively make smarter decisions around your ecommerce strategy.
The importance of eCommerce analytics has increased as businesses have become online-first, seeing growing shares of their revenue come from digital channels. The need to understand these online customers has led companies to place a higher priority on data that can help their marketing and sales teams reach target audiences, understand buying behaviors, and optimize customer journeys in order to maximize retention and revenue.
Here’s a look at what eCommerce analytics is, why it’s so important to companies today, and how to aggregate and interpret the data you need to leverage your digital channels effectively.
The purpose of eCommerce analytics is not simply to collect or analyze data, but to harness analysis for actionable insights. Some of the applications of eCommerce analysis include:
By effectively analyzing your eCommerce data, you can better understand which channels produce results and better segment your customers. For example, you might analyze where your buyers are coming from and what their demographic characteristics are in order to improve your understanding of your target market. Google Analytics is a great example of a common tool that provides demographic data on your visitors. You can also analyze which traffic sources are funneling visitors toward sales, what your return on ad spend is through various platforms, and which channels produce the highest lifetime value.
Analyzing customer analytics also helps you optimize the customer journey. By leveraging this data to create better customer segments for tools like Klaviyo, you can provide more relevant messaging to your customers. Better messaging makes for a better customer experience - and also, generally, higher sales.
Here’s a quick example: Maybe you have a segment of customers approaching their lapse point where an email campaign might save a few of those clients, improving your overall retention.
Or, maybe you run a sale where you target your lower AOV customers and exclude your biggest spenders. There are many ways to leverage eCommerce analytics- but first, you have to make sure you’re getting these actionable insights.
By providing practical business insights into the entire eCommerce process, eCommerce analytics delivers numerous benefits to businesses:
This wide array of benefits underscores the immense practical value of eCommerce analytics. Together these benefits ultimately serve to increase sales results.
An overarching benefit of a well-executed eCommerce analytics strategy is that it provides you with data-driven intelligence to improve your marketing and customer understanding. Instead of relying on intuition or guesswork, you can use objective data as the basis for strategic adjustments to your marketing campaigns and/or sales approach. This allows you to focus your efforts on more cost-effective strategies that generate real results and get the most out of your investment.
With the right data points, an eCommerce analytics platform can can help you:
Using this type of data enables you to focus on what’s relevant to your buyers, while driving higher sales.
Pricing is an important component of your retail strategy and eCommerce analytics allow you to leverage price differences as efficiently as possible. A simple example would be running a discount campaign for your customers approaching their lapse point to entice them to return and stay engaged. If you know which of your customers routinely pay full price, you might exclude them from discount campaigns. Likewise, you might target your lower AOV customers with specialized sale campaigns.
If you’re aggregating the right eCommerce analytics, the insights your data provides should allow you to make more accurate forecasts of not only buying trends, but churn and inventory management as well. You should be able to identify how much revenue was generated, and how much product was sold, through campaigns and channels to help with future planning. You can take this same information to help determine gross profit (revenue - COGS) for a specific time period, and more accurately plan your future net profits based on historical trends.
Also, if you’re effectively tracking LTV, you can determine if the average customer is becoming more or less valuable, as well as which channels are producing greater stickiness to help determine where to allocate future spend. This type of invaluable information can empower you to adjust your tactics and optimize your performance.
Your eCommerce analytics should help improve your marketing performance by allowing you to better track and tweak your campaigns. More specifically, which campaigns, keywords, and channels are generating purchases and which aren’t. With so many advertising channels available, it’s important to understand which channels are generating a healthy ROI, the highest LTV customers, and which ad content and campaigns are working best across all of them.
To track all of these metrics, you'll need to use more than just Google Analytics. A platform that aggregates your eCommerce analytics data across all of your channels (email, affiliate, paid) and tools (Google Analytics, Shopify, Klaviyo, etc.) is the only way to get a 360-degree view of your campaign performance. With the right eCommerce analytics platform, you should be able to take all of these metrics and utilize them to determine important KPIs, such as net profit just for your campaigns. You can also take your current customer data and target specific users for unique goals. For example, maybe you want to run a referral campaign targeting customers who have left positive reviews through Yotpo, or for those who have made a recent purchase.
The possibilities are endless, as long as you have a unified view of your customers with the ability to segment them across the right data points.
There are different approaches you can take for collecting eCommerce data. Many eCommerce applications have their own basic, built-in analytics tools. As an example, eCommerce platforms like Shopify and BigCommerce typically have their own native analytics and reporting features that provide information on transactional activity.
However, the problem with relying solely on these types of native analytics tools is that they only pertain to their individual app, or in some cases, a limited range of supporting apps. This fails to provide you with a comprehensive view of all the data points in your eCommerce and retail stack, leaving blind spots in your analysis of your customers and their buyer journeys.
A more effective approach is to use an analytics platform that has the capability to combine data from all of your important tools and platforms. However, building your own integrated eCommerce stack to support all of your apps requires significant expertise, time, and expense. You’ll need connectors to all of the platforms that will require constant updating, a data warehouse to ELT the data into a cross-referenceable format, and a reporting tool for querying that data warehouse and visually displaying the information in the form of charts and graphs.
Once you consolidate all of your eCommerce data into one place, you can begin leveraging important KPIs in order to make strategic adjustments and improvements to your business.
Fortunately, it is not necessary for you to build an integrated eCommerce analytics platform from the ground up. The need for eCommerce analytics has fueled the development of integrated platforms specifically designed for this purpose. The Glew platform is custom-built for eCommerce, allowing you to connect, transform, and visualize all your data in one convenient place without the need for separate connectors, a data warehouse, or custom BI visualizers.
The Glew platform allows you to view and manage all of the business intelligence needed to grow your business through intuitive dashboards, 150+ pre-built KPIs, and custom reports. It also allows you to automate recurring reporting tasks by setting up scheduled reports and creating automated alerts.
Specially designed to support eCommerce analytics, Glew integrates with leading eCommerce apps and other popular tools, making it easy for you to stay on top of your key numbers. Schedule a demo to see how it works, or start a free trial to experience first-hand how eCommerce analytics can transform your business.
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