Having helped a number of ecommerce businesses as a Fractional CMO, I know firsthand how important it is to speak the language of Excel.
What do I mean? When you are responsible for an ecommerce marketing budget, you need to be able to explain to your client—or boss—in clear numbers what your ROI looks like and if things are improving or not.
Of course, ecommerce analytics is about more than just that.
In today’s digital-first world, leveraging ecommerce analytics is crucial for understanding customer behavior, optimizing sales funnels, and ultimately scaling your ecommerce business. Whether you’re running a small ecommerce shop or a large online enterprise, understanding these metrics and selecting the right analytics tools can provide actionable insights to help you stay competitive.
What is Ecommerce Analytics?
Ecommerce analytics are metrics used to help Ecommerce businesses assess their numbers, and determine the efficacy of their marketing efforts. Analytics help online businesses make data-driven decisions to improve customer journey, and develop marketing strategies that drive success. Although many marketers and business owners are likely familiar with analytics in some form, the analytics that come along with Ecommerce businesses versus only marketing platforms or brick-and-mortar stores differ from those found in other areas.
As you familiarize yourself with the metrics measured in your Ecommerce business and how those metrics might impact your different customer segments, learn to keep a close eye on five key performance indicators in particular.
5 Key Metrics to Track in Ecommerce
Just as marketing campaigns must track the efficacy of their tactics, ecommerce businesses should keep a close eye on customer behavior, sales numbers, sales trends, conversion rates, cart abandonment rates, and average order value. Measuring each of these metrics in your ecommerce business can help you keep a finger on the pulse of your online business, including how well your ecommerce platform is performing. I have gone into greater detail on each below.
Cart Abandonment Rates
Cart abandonment rates are a useful metric to track for several important reasons: an abandoned cart can be a measure of customer loyalty, interest in a particular product, or even willingness to purchase at a series of rates. Potential customers require continual support to effectively turn into actual customers, so measuring shopping behavior like abandoning a shopping cart prior to purchase can help determine whether or not your site, product descriptions, and prices are compelling.
Conversion Rates
Making informed decisions is vital to ensure that your conversion rates remain high. If your ecommerce metrics indicate that your conversion rates remain stubbornly low, it can indicate the need for changes to your site, your platform, or even your marketing channels. A conversion is measured any time a purchase is made. This is an important distinction that differs from conversion rates measured in marketing avenues like email campaigns: a conversion in marketing is a desired action taking place, while an ecommerce conversion describes an actual purchase.
That being said, the click-through rate of your marketing efforts does have the potential to influence and give you a deeper understanding of your purchase rates. Conversion rate measurements are a powerful tool as you examine the efficacy of your ecommerce efforts.
Average Order Value (AOV)
The average order value (AOV) on your ecommerce site describes the average size of orders coming in. This particular measure can be used in predictive analytics, to give you an idea of what you can expect from your monthly conversions, and it can also give you a deeper understanding of customer behavior. Someone who has a low average, for instance, might consider looking into how they can encourage customers to bundle purchases.
Customer Lifetime Value (CLV)
Your customer lifetime value can help drive business decisions, as well; CLV helps demonstrate how valuable your customers are to you. This includes the entirety of a customer’s journey, and includes purchases, customer satisfaction, and even potentially engagement. Think of it this way: customer experience can help further drive sales by providing customer feedback and reviews, and encouraging others to purchase.
Customer purchases alone can help lend credibility to your business. Your customer base is one of your greatest assets, and your CLV can help demonstrate this in real time.
Customer Acquisition Costs
Customer acquisition costs describe how much money is required to acquire customers. This metric is expressed as a dollar, and measures the percentage of customers coming in against the amount of money used to market to or acquire a customer. This is an important measurement in overall business performance, because it indicates how efficiently your marketing efforts are working, and can indicate the need for changes to user interactions or marketing tactics as a whole.
General analytics tools like Google analytics are useful, but there are many more that hone in on the different aspects of business that impact ecommerce stores. Although Google Analytics can certainly help, let’s go over some of the other tools currently available to evaluate your ecommerce business and determine how effective it is in practice. Using these analytics, you can make data-driven decisions and improve your business.
Google Analytics is often considered the gold standard of analytics tools, and with good reason: Google Analytics delivers virtually everything, from which popular products are bringing in the most, to what seems to bring customers back, to where the majority of your traffic is coming from.
Pricing: Freemium
Shopify Analytics are great for those using Shopify as their preferred store platform. Like Google Analytics, Shopify’s metrics focus on providing the most detailed analytics to help you move forward and reach your business goals. Analytics detail conversions according to search, acquiring returning customer rates, total sales, and more.
Pricing: Included as part of a Shopify shop package
Hotjar’s analytics tool is one that places a stronger emphasis on customer behavior and making changes accordingly. The valuable insights delivered by Hotjar include recordings of actual user sessions and heatmaps for the free option, as well as segmented data, frustration signals, and user actions with higher tiers. Hotjar is a great option if you are interested in both understanding and improving user experience.
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Pricing: Freemium
Further Reading: The 5 Most Powerful Ecommerce Digital Marketing Strategies
Kissmetrics is an analytics tool that highlights customer behavior across customer demographics, to help develop changes to your marketing and site strategies to increase conversions. Although the metrics are valuable insights like many of its contemporaries, Kissmetrics analytics are primarily focused on behavioral data, and how that data impacts your sales funnel.
Pricing: From $229/month
Further Reading: 20 Definitive Ecommerce Marketing Strategies to Implement in 2024
Woopra is a more full-service analytics tool, with different areas of focus from which to choose. Titled Journeys, Trends, and Retention, Woopra dives deep into the parts of your business that inform customer journeys, demonstrate trends in preferences and purchases, and result in customer retention. Performance metrics like customer retention rates can help businesses gather information about where they may be struggling, and which aspects of their business are thriving.
Pricing: Freemium
Glew is a large-scale platform, offering numerous different types of analytics, including inventory management. Glew’s ecommerce analytics focus on business operations as a whole, highlighting product performance, customer segment performance, and customer behavior. Gathering data on these three areas helps improve user experience and drive sales. With many other types of analytics available, Glew is a great option for people looking for a host of tools in one place.
Pricing: Available upon request
Billed as a Google Analytics alternative with a hefty dose of privacy, Matomo offers the same standard benefits of ecommerce analytics as Google Analytics, allowing users to achieve the same basic analytics goals. With tools like heatmaps, session recordings, and customer behavior insights, Matomo is a great alternative for customer data platforms that do not emphasize privacy in reporting.
Pricing: Free, if used on internal servers
Crazy Egg is a more simplistic tool, designed to turn visitors into customers. By paring down its analytics and focusing on customer engagement through evaluating heatmaps, session recordings, and A/B testing, Crazy Egg is a great option for anyone looking to improve marketing performance, and crack the stubborn egg of a short customer lifecycle.
Pricing: Starting at $99 per month
Further Reading: Generative AI in Ecommerce: 17 Ways to Boost Your ROI
Keeping in line with its title, Supermetrics actually combines marketing and ecommerce analytics, to help identify what makes the average customer tick, and how that customer actually interacts with your ecommerce site and products. Supermetrics’ marketing analytics tools are twined with metrics regarding business strategies and ecommerce websites, allowing users to develop a comprehensive, data-driven plan for their ecommerce business. This is a great option for businesses looking to simplify and streamline analytics tools.
Pricing: Starts at $29 per month
Mixpanel is an analytics tool that highlights the basics in ecommerce. Audience and customer growth, revenue growth, revenue over time, top purchased items, and more are included in Mixpanel’s list of analytics. This is a great option for anyone looking for the critical metrics involved in running an ecommerce business, with the end game of meeting conversion goals with ecommerce practices.
Pricing: Freemium
Further Reading: 15 Best Ecommerce for Small Business Platforms in 2024
How to Use Ecommerce Analytics for Growth
Analytics insights are an important source of truth for business owners, as they offer comprehensive reports created from identifiable data. That data can then be converted into insights that have the ability to boost performance and optimize your site. Analytics can help determine which products to highlight, which aspects of a site are being skipped over, and even identify and sort through customer behavior. Putting all of these insights together, ecommerce business owners can make better marketing decisions, and change their sites according to incoming data.
Ecommerce Analytics in Action
To illustrate the value of analytics tools, take a closer look at the following examples:
BUFF demonstrates the value of using Google Analytics. The company, a sports and lifestyle brand, used Google Analytics to track user metrics and make necessary changes to their online stores. Over time, the use of Google Analytics and other tools has led to BUFF achieving a conversion rate of 48%.
Mixpanel has helped users improve their reach and, consequently, improved their ecommerce strategy. Immoboliare utilized the analytics service to prompt a 40% increase in real estate listings and converted over 50,000 users in only 5 months. The use of Mixpanel to develop business strategies and implement company goals was ultimately identified as the source of these leaps in success.
Finally, Credo demonstrates the value some users have found in Hotjar. Credo is a CRO agency that used Hotjar’s analytics to increase revenue by 220%. Using heatmaps, A/B testing, and frustration signals, Hotjar helped identify the areas of Credo’s site in need of improvement, which ultimately drove engagement, encouraged conversions, and resulted in a significant bump up in revenue.
Best Practices for Ecommerce Analytics
As you settle in and decide on the best ecommerce analytics tool to meet your needs, consider the best practices recommended for setting up and maintaining those tools. Ensuring accurate data tracking, using customer reports, and segmenting data according to either demographics or product type are all expected when employing an Analytics tool. Make sure that you are keeping a close eye on your numbers and double checking for accuracy to ensure that your analytics tool is actually keeping you in the loop.
There are some drawbacks associated with ecommerce analytics, the most significant of which is the issue of privacy. As you gather information about your customers and site visitors to learn more about customer behavior and improve your own conversion rates, you are gathering sensitive information. If that information were to be hacked, customers would likely be quite frustrated and upset. Learning how to appropriately manage data and sensitive information can help alleviate any issues in this area.
In a similar vein, permissions are essential to gather data without violating privacy and while maintaining your own adherence to laws and regulations. Verify legalities with any analytics tools that you use to protect yourself against legal action.
Further Reading: 17 Ecommerce Statistics You Need to Know to Improve Your Ecommerce Marketing in 2024
Conclusion
Selecting the right ecommerce analytics tools can truly be a game changer for your business. Knowing the essential metrics of your business can mean the difference between understanding customer behavior and key metrics, and floundering without any deeper insights into your customers’ behavior. Analytics tools empower you to make data-driven decisions to spur growth, improve customer experience, and generally improve your ecommerce business.
Whether you are optimizing conversion rates, refining your marketing strategies, or more deeply evaluating the behaviors of your target audience, the right analytics platform can help provide the clarity and direction you need. Staying competitive in the ever-changing landscape of ecommerce sales can be challenging, but analytics make it one step easier. By exploring the tools I have gathered together above, you can select an ecommerce dashboard that aligns with your needs, and sets you on the road toward lasting success.
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