Ecommerce 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.
In order to make the most of your budget, you need to know how to use these tools correctly.
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Here are some important principles that will help you optimize your marketing and analytics for eCommerce: While these principles are useful, it is important to remember that there are a lot of different analytics tools out there. 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 a number of 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
Ecommerce Analytics can Help Understand What Customers are Looking for
The eCommerce analytics tool is a set of software that the owner of an online business can use to track and measure customer behavior.
This can help to understand what customers are looking for in the product catalog, where they are coming from, and their actions.
Ecommerce analytics tools can help to create an idea of how the website is performing. Many eCommerce analytics tools include a way to track customer behavior and to measure the effectiveness of marketing campaigns.
Ways to Use Data Like Targeted Marketing or Customer Service
For eCommerce 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.
There are many different types of analytics tools that exist for eCommerce 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 Continuous Process
If you are in the process of developing your company’s marketing analytics, don’t feel like it is a one-time thing.
Marketing analytics is a continuous process that needs to be revisited and refined.
Benefits of Ecommerce Analytics
There are several insights that eCommerce analytics helps obtain. These are User behavior data, product data, and marketing data.
Thus, user behavior data gives you details about consumer behavior during purchase and, in fact, 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, moving some of them to the shopping cart, checkout; the entire customer journey is mapped and reported on. This gives you a clear idea of how your visitors move down the funnel, thus identifying weak links in your chain.
Increase your ROI with intelligent product recommendations
Ecommerce analytics also helps your business get insights into products and their performance. It gives insights into the number of products sold across a timeframe, product list views, product list clicks, all of which help you with inventory management, and the cross-selling, and up-selling of the products.
Ecommerce analytics helps you with your marketing. Such tracking allows you to monitor internal and external marketing efforts.
You can see metrics like internal promotion views, promotion clicks, metrics related to the performance of your order coupons vis-à-vis revenue, and also track external marketing campaigns like email campaigns, catalog promotions, etc.
Crucial eCommerce Metrics and KPIs to Track
Following are the eCommerce metrics and KPIs that can be tracked using advanced eCommerce analytics tools to enhance various regions of the business.
Sales & Marketing
- Add-to-Cart Rate
- Customer Acquisition Cost
Supply Chain Marketing
- Order Accuracy
- Refund Rate
- Inventory Turnover
- Gross Profit
Customer Support & Retention
- NPS of Customer
- Churn Rate
- Product Affinity
Use of AI and ML in eCommerce
Artificial intelligence allows eCommerce businesses to automate the segmentation of users and personalization to provide 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 implement sentiment analysis to analyze the intent behind product reviews and effectively use ML-driven algorithms to develop dynamic pricing for eCommerce products to remain competitive in the market.
eCommerce Analytics Best Practices
A lot can be measured in the eCommerce 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, stick to business goals, and determine what can be done to measure KPIs and performance without ignoring the latest trends.
Invest in the suitable data stack:
Soon after having a clear understanding of which data points to track, the next step is to make sure that you are developing a complicated system for collecting and structuring data.
A combined data stack, uniting dissimilar data from various origins into a unified origin of truth like a data warehouse, can enhance the accuracy of data and decision-making.
Focus on data quality: To achieve a higher ROI, you have to make sure that eCommerce analytics data is reliable and error-free forever.
Issues associated with data quality, such as missing records, duplicate data, or irregular formatting can result in 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 using valid analytics tools, consistently auditing the origins of the data, and utilizing 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 don’t use it unnecessarily if not required.
You need to ensure 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 obtainable with individual teams, it’s not going to help.
Data should be centralized and unified so that employees within the organization can look at the same data and insights.
Make proper use of data: The majority of businesses use the information to inform all major business decisions.
For this, you have to make sure 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 study conducted by McKinsey states that 53% of rapidly developing and high-performance sales businesses are effectively using analytics.
Incorporating an eCommerce analytics tool is a challenge for online stores that wish to track the performance of their store and what factors are deterring or driving sales.
Express Analytics is the most reputed eCommerce analytics service provider in the market. The company can visualize the performance of a business via metrics associated with products, channels, subscriptions, and consumers.
Get in touch with Express Analytics to understand how we can help your store generate more sales with the necessary data.