Data is a great way to represent a bunch of information and present t in structured forms to save one from the stress of sifting through unnecessary verbiage. What is better than data is analytics, which takes a step further by eliciting crucial information, inferences, and insights that can be transformed into practical applications.
One sector that benefits a ton from the application of data is eCommerce through a process known as eCommerce analytics which has a tremendous ability to help businesses scale up in efficiency and their growth and revenue metrics.
Curious to discover the dimensions of eCommerce analytics in how it can help drive sales. Read on to find out.
What Is eCommerce Analytics?
eCommerce analytics is a process of collecting, structuring, and analyzing data relevant to your eCommerce store and activity. It involves the use of digital tools to group data and present a structured analysis of different sections of eCommerce business.
The goal behind eCommerce analytics is to derive insights on relevant parameters and identify shifts in trends and consumer behavior, the knowledge of which is pivotal to improving sales.
Types of eCommerce analytics
eCommerce analytics is an umbrella term with several divisions representing different aspects and intricacies of eCommerce. This form a solid foundation to shape your marketing strategy and help you improve sales.
Here is a look at the common types of eCommerce analytics.
1. Audience Growth:
This aspect of eCommerce analytics reveals data on the trajectory of your audience. It informs you of the volume of the audience, flows, and ebbs across different times. This provides great insight into the number of audiences at specific periods and can be instrumental in developing a marketing strategy to improve sales.
2. Site Traffic:
This monitors how much activity and engagement is ongoing on your website. With this analytical tool, you can detect the performance of specific marketing strategies or ad and referral campaigns and track all other promotional activities.
3. Traffic source/medium:
This is a better-advanced analysis that expounds on the site traffic, indicating the source and cause of traffic. It helps eCommerce merchants evaluate the cause-and-effect relationship between targeted ads and affiliate programs and aids assessment of performance.
This aspect of eCommerce analytics is closely intertwined with the audience. Demographics classifies the information about the audience on your site; these classifications include gender, location, and age range and are a treasure trove for extra targeted sales and marketing campaigns. It also makes it easier for merchants to promote audience-specific products to a selected demographic group.
5. Average Order Value:
If you want to know which products or services drive the most sales and rake in the most orders, the average order value is an indicator of this. It estimates the sales per order and can be factored into calculating ROIs. It is also one metric that should be monitored frequently to look for dips and peaks so relevant decisions and actions can be taken.
6. Revenue And Profit:
This has to be the most used analytics needing little explanation. It helps businesses to keep track of the revenue obtained from certain products and facilitate the calculation of the profitability of certain goods. One can confirm through these metrics the most profitable goods and the poor performers.
7. Customer Lifetime Value:
Long-term customer patronage is a great asset to a business. Customer lifetime value gives you an idea of the total revenue incurred from a customer over time. This analytics helps you with estimating customer satisfaction and is a handy tool when you need to reward customer loyalty.
8. Refund Rate and Return Rate:
This is also a crucial aspect that helps to determine customer satisfaction. While the term is self-explanatory, its implication is often revealing. A high rate of refund and return should prompt a quality assessment of a product and services.
Benefits Of eCommerce Analytics
The benefits of eCommerce analytics all lie in its insight and how it is an anchor to help you decide on certain affairs. Here are the following benefits of eCommerce analytics.
1. Aids with strategic decision-making:
With all the knowledge obtained from eCommerce analytic tools, you can make better strategic decisions guided by accurate data analytics. This way, your decisions emerge from an informed perspective and are likely to be more profitable.
2. Guides towards optimization of eCommerce:
Analytical tools such as demographics, audience, site traffic, and source can easily craft and design programs to optimize sales and boost revenue. The inside knowledge gives you an idea of a sales funnel's effectiveness and allows for improvement where necessary.
3. Detection of performance of goods and services:
If you have launched a new product on your eCommerce site or intend to estimate the performance of already existing products, analytical tools such as the return and refund rate, the customer lifetime value, and the average order value can help you make decisions at to what needs improvement in the catalog and also guide you towards maximizing and upselling the most profitable products.
4. Evaluation of trends and assessing the impact of a campaign:
In business and eCommerce, there are strategies peddled by different experts and experienced stakeholders. Through analytical tools, one can determine which marketing strategy, ad campaigns, referral programs, or affiliate programs are beneficial to the performance. Additionally, you can identify trends and alterations in customer behavior which is great to help forecast sales and profitability of goods.
5. Personalization of consumers' experiences:
With eCommerce data analytics, you can help influence the purchase cycle of your consumers and make strategic imports at different points in the sales funnel based on the data relating to the specific preference of a consumer. This is great to help you with optimal sales and targeted content to improve customer experience.
Data and inference obtained from eCommerce analytical tools are key to unraveling specific marketing strategies and intervention programs that can help to boost sales. For eCommerce businesses, this analytical tool is an eye-opener to what goes beyond the exchange of goods for revenue.
This is why every firm needs DG1, which provides an all-in-one digital platform for small and mid-sized businesses to efficiently scale up their eCommerce activities and digital marketing campaigns.
If you are ready to build a recession-proofed eCommerce site, you can start a free trial here. If you need help creating your cost-effective eCommerce site, contact us online to book a call with our expert today.