Understanding customers is a major aspect of ecommerce, and if you do it right, you can discover untapped market opportunities to skyrocket your revenue. One of the best ways to do that is through ecommerce analysis.
Simply put, ecommerce analysis involves dissecting and understanding data from various sources that directly or indirectly affect your business. By interpreting this data, you can identify weak points, growth opportunities, and make informed, data-driven decisions to help your store flourish.
It isn’t just about crunching numbers; it's your gateway to discovering what makes your customers tick. You can uncover market opportunities before they hit the mainstream or find niche markets hungry for what you offer.
Overall, it’s more than just a strategy – it’s a way of thinking that keeps you a step ahead. Let’s dive deep and learn more about it.
5 Pillars of ecommerce analysis
Knowing which datasets you should focus on can get overwhelming with such an abundance of available information. However, the five points given below are a few areas that cannot be ignored.
#1 Audience insights
Audience analytics can provide important information about your customers, such as their demographics, age, gender, location, purchase patterns, engagement rates, and more. You can use this information to address their concerns and make necessary changes, such as optimizing your website for different devices, changing marketing strategies, and offering promotions based on their purchase patterns and history.
According to Temkin Group, 77% of customers would recommend a brand to a friend after having a single positive experience. This tells you that understanding your customers' needs and ensuring their satisfaction can develop a healthy community, which in turn can help you get more sales.
#2 Acquisition strategies
If you want your ecommerce business to expand, you constantly need to acquire new customers. Acquisition analytics provides essential information about where your website traffic is coming from and who those individuals are. By analyzing it in depth, you can determine which marketing channels bring in the most website traffic and have the best return on investment.
Once you’ve identified the high-performing channels, using strategies wisely becomes easy. For example, if paid ads fetch you the best results, invest more in them. Similarly, if blog posts are the channels fetching you high-value customers, you would want to spend your time and effort publishing valuable content for your audience.
#3 Behavioral analysis
Studying the behavior of users who visit your website can reveal crucial information that can assist in optimizing the overall experience. Look at what products most customers view, how much time they spend on a page, the load times of your store, and what journey the user takes from seeing to purchasing.
These can help you figure out what might be causing a user to not perform a desired action, like making a purchase. How many carts are being abandoned? Is the checkout procedure too lengthy? Are users not spending enough time on your website? Understanding these areas allows you to address the problems and keep improving as a business.
#4 Conversion tracking
One of the most important metrics for an ecommerce business (or any business) is the conversion rate. It helps you raise questions, such as:
How many visitors to your store are turning into actual customers?
How many of them are becoming long-term customers?
How long does it take for a user to convert into a customer?
What is the average order value and cart abandonment rate?
Conversion tracking can answer all the questions posed above and provide valuable insights. It can also help you determine which campaigns are performing the best.
#5 Performance of paid marketing efforts
Since Google Shopping is the number one advertising channel in all product categories, according to the Multichannel Marketing Report in 2023, paid marketing is a channel you simply cannot overlook. It is one of the most commonly used strategies to attract traffic to a store and generate a sale without waiting long (unlike SEO).
However, you must constantly monitor your paid marketing efforts across all platforms and channels to ensure you’re not burning your budget. When running ads, look at the return on investment and determine what objectives aren’t producing results. Depending upon your findings, you might have to tweak your target audience, demographics, keywords, and other areas to improve its performance. The key is to pinpoint high-performing campaigns and invest more in them.
Key performance indicators vs analytics
It’s easy to confuse key performance indicators (KPIs) with analytics, as many people use them as synonyms. These two concepts are interconnected and appear the same at face value but are indeed different.
Let’s take a look at them individually to see the differences between them.
#1 Key performance indicators (KPIs)
KPIs are metrics that can be defined quantifiably, and these metrics are used to determine the success of the strategies your ecommerce business is using to reach its objectives and goals.
Here are some examples of key performance indicators:
Return on investment: This measures the amount of profit generated in relation to the investment made.
Conversion rate: The actual number of users that turned into customers.
Customer acquisition cost: The cost of acquiring a new customer, majorly including marketing costs.
Customer lifetime value: The revenue a single customer generates throughout their journey with your online store.
Average order value: Average amount of money spent by a customer on orders.
In other words, these metrics are benchmarks that can be used to track and evaluate performance to find areas of strength and weakness.
#2 Analytics
Unlike KPIs, analytics cover a broader spectrum of factors. It isn’t used to judge the performance of your store. Rather, it tries to understand and study current and historical market patterns, trends, and correlations along with customer behavior and tries to gain insight from it. These insights can be used to make future predictions, optimize operations, and make strategic decisions.
In other words, KPIs and analytics can be put together as siblings who argue all the time but secretly can't live without each other. KPIs are your end goals or the "what" you aim for. They're like street signs, showing you the way towards your ultimate destination. Analytics, on the other hand, are the "how" and "why" of your process. It calculates every step you take, offering feedback and insights to help you optimize your strategies.
For example, if your goal is to increase sales of your online store, your KPI might be hitting 200 monthly sales. Analytics come into play by showing you which products are the most profitable, how users find your online store (social media, Google searches, etc.), and the best pricing strategies to adopt. This information can be incredibly useful, as it helps you make smarter decisions to hit those KPIs.
KPIs vs analytics: A tabular comparison
Here’s a table comparing the two:
KPIs | Analytics |
Measures performance against specific goals | Analyzes data and extracts insights |
Quantitative in nature, and focuses on specific metrics | Quantitative and qualitative in nature, and focuses on patterns and trends |
Often reviewed at regular intervals (monthly/quarterly) | Can be real-time, daily, or as needed |
Helps set targets and define what success looks like | Helps understand how to achieve targets or why certain outcomes are happening |
Indicates whether goals are being met | Provides the “why” and “how” behind the outcomes |
Examples include ROI, conversion rate, and average order value | Examples include behavioral analysis, demographics, and acquisition |
Best practices for ecommerce analytics
There are certain tactics that can help you extract more out of your analytics. Here are some of the best ones:
#1 Combine marketing data across platforms
Using a single marketing platform may not be ideal, as it can limit your growth. You should use emails, social media, blog posts, paid ads, and more to market your store to your target audience.
More specifically, when you have multiple marketing channels, your insights and performance metrics are spread out. However, for a thorough understanding and analysis, this data from across channels and platforms must be gathered and assembled in a single place. This helps you pick and stick with the areas that are giving you the best results.
#2 Connect customer behavior with data analytics
Nothing earns you a client’s loyalty more than having a customer-centric approach to business. In fact, Keenfolks highlights that 80% of customers say the experience a company provides is as important as its products and services.
Therefore, you must understand how customers interact with your store and utilize data analytics to gain a deeper insight into what they are doing on it. Identifying factors like which products customers interact most with, what pages are visited most, and what the cart abandonment rate is can help you eliminate your weak spots and capitalize on your strengths. Plus, combining data analytics with customer behavior lets you strategize your promotions, discounts, and overall marketing.
#3 Monitor shopping behavior flow
Ecommerce shopping behavior flow refers to the journey a customer takes through your sales funnel, from entering your store to the checkout page. By monitoring the user throughout this process, you can gather information about the effectiveness of your sales funnel and the drop-off points.
A reduction in shopping flow indicates a problem in the journey. From there, you can start addressing the issues you might find, such as making the checkout process shorter or offering special discounts.
#4 Track product category performance
You must actively analyze your product categories to determine their performance over time. For example, if you run a clothing store, clothes that fall within the winter category would only perform well during winter, so continuing to sell those even in summer wouldn’t do any good.
Moreover, pay attention to trends and boost the marketing of certain product categories, like electronics, during the holiday season. Tracking and analyzing this data allows you to spot patterns and trends, make calculative decisions, and plan for the future.
Best ecommerce analytics tools
Gathering and displaying data coherently can be quite a task if you do it manually. Let’s take a look at some of the best analytical tools that can assist you with it.
#1 Google Analytics
One of the most widely used tools, Google Analytics, offers various features, such as tracking website traffic, conversion rate, and user behavior. It also gives you insights into your audience's demographics, ecommerce transactions, and more to allow you to make smarter decisions.
#2 Adobe Analytics
Adobe Analytics is an enterprise-level tool for gaining insights into a customer journey at all points. It offers real-time stats, predictive analysis, and a powerful reporting system. The data can be viewed using various visualization methods, including graphs, charts, and tables. Simply put, it can help immensely in making user-centric decisions and enhancing customers' experiences.
#3 Shopify Analytics
If you’re using Shopify as your ecommerce platform, you can enjoy access to their built-in reporting and analytics tools. It is a fantastic solution with over 60 pre-built dashboards, reports on sales performance, engagement metrics, and marketing insights.
How Shopware can grow your ecommerce business
Complete D2C, B2C, and B2B ecommerce software, Shopware can power your online store and help you grow it to its full potential. Our platform has enabled numerous ecommerce businesses to scale their operations and automate processes, allowing owners to focus on what really matters.
By taking a product tour, you can explore features such as:
Multi storefronts
Multi channels
AI copilot
Flow builder
Dynamic access
Subscription model
Social commerce
Ecommerce automation tools
If you want to combine performance with flexibility and the highest level of security, Shopware is your answer. Contact us today and take your ecommerce business to where it deserves to be.
Final Thoughts
Ecommerce analysis is an indispensable practice for online stores that want to prosper. By understanding your customers and market trends, you can be in a much better position to make changes where needed. Ultimately, it can help you increase sales, build a bigger customer base, and stamp your authority in the market.
FAQs
What is ecommerce analysis?
Ecommerce analysis is the study of data related to your business and market. This includes customer behavior, sales performance, website traffic, and more. This data is often taken from sources like reports, website analytics, and marketing campaigns.
How do you analyze an ecommerce website?
When analyzing an ecommerce website, several key factors should be considered. You can evaluate user experience, perform SEO audits, conduct content reviews, check conversion rates, and more.
What is the most popular ecommerce analytics tool?
In terms of sheer numbers, Google Analytics is the most popular ecommerce analytics tool out there. It provides comprehensive insights into user behavior, conversion rate, website traffic, and other areas.
