The world of e-commerce has recently undergone quite an expansion. With the combined effects of the pandemic and the shift in shopping habits, e-commerce stores are popping up like mushrooms.
A more saturated market naturally also demands improvements in the way e-commerce businesses are run. Having a store has never been enough, but even mere marketing and digital advertising won’t cut it anymore.
To take your e-commerce brand further, you need to start relying on data more than ever before. And we’re not talking about generalized market research data. We’re talking about specific, precise, personalized data about your customers and their preferences.
Let’s dive into the world of e-commerce analytics and explore how data can help you drive more sales.
Data-Driven Product Development
Online shoppers have more choices than ever before. As a result, they now have much higher expectations regarding user experience, product quality, and delivery. After all, they are able to find practically anything they can think of. It takes only a little bit of research and the use of the right keywords.
With the insight that real-life data gathered from your previous customers can provide, you are now able to design or source products your target audience will truly appreciate. This will enable you to sell out more of your stock while at the same time keeping your target audience satisfied.
Smarter Inventory Management
One of the biggest e-commerce challenges is inventory management. But when it’s data-driven, it becomes much simpler and causes fewer headaches. Data-driven inventory management enables you to:
know at all times where your products are
keep precise and accurate track of stock
predict your inventory needs for the foreseeable future, cutting down on lead times
This will reduce the chance of your most popular items going out of stock too often. Plus, you will no longer be investing in stock that sits on your shelf for ages. It will certainly take some time to gather enough data to be able to make these kinds of predictions, and you’re still encouraged to think outside the box and stock new product categories. Your choices will merely be better informed.
Increased Order Value with Cross- and Up-Selling
Don’t forget that acquiring new customers costs about five times more than retaining existing ones. That’s why it’s crucial to ensure your shoppers have a positive experience with your brand and want to come back again.
And as millennials tend to be loyal to their favorite brands, once you establish yourself as one, you are likely to see an increased and consistent spend.
By relying on your customer data to offer personalized and relevant cross-sells and up-sells, as well as personalized recommendations in general, you will pique shopper interest and be able to showcase more of your offer. This, in turn, can deepen the relationship you have with customers and increase your average order value.
Improve Return On Ad Spend
E-commerce analytics can also help you maximize your ad spend. More importantly, they’ll prevent you from spending money on ads that don’t bring in any paying customers.
Ads are a vital part of e-commerce marketing. However, when you don’t rely on your own data and choose to go with what a third-party tool suggests, you can end up choosing quite the wrong kinds of keywords.
With the help of analytics, on the other hand, you can target your ads more intelligently. You can serve them to the right audiences at the right time, ensuring higher conversion rates. Don’t forget that serving the wrong kinds of ads to the wrong audience may still get you a fair amount of clicks, but it will also increase your bounce rate, thus harming your rankings.
Let us now dive into some e-commerce analytics best practices and how to put them to good use.
Gather Data Across Multiple Channels and Platforms
To gain a competitive advantage, companies are gathering data across all of their marketing channels and content platforms. This not only ensures their data is reliable but also helps them factor in every sliver of their target audience.
Actually gathering this data is the challenge, of course. Most e-commerce stores will have their scattered across Google Analytics, Shopify or Woocommerce, Facebook, Instagram, Google Ads, et cetera. If you were to copy and paste row upon row of figures into a sheet, you would lose valuable time (and the data would start to go a bit stale by the time you manage to gather it all), and you would lose a bit of your mind as well.
However, there are plenty of so-called “data connectors” that can help you merge different data sources and ensure your resources and figures are consolidated. That leaves you the task of analyzing the data and figuring out the best ways to implement your findings.
Use It To Better Your Customer Experience
Without a doubt, UX is one of the more underrated ranking factors. And it’s one of the key elements of conversion rate optimization too. No matter how good your products are, you are not likely to retain (or acquire) that many customers if your store offers a horrible user experience. This is typically the case with e-commerce sites that are cluttered and difficult to navigate.
Now that you’ve gathered all that data from your marketing stack and hopefully organized it in a transparent way, you need to apply logic, intelligence, and creativity to the figures, and take concrete action.
Of course, this is the most difficult part of the process. The tools you are using may have recommendations of their own, but it still takes a human brain to be able to interpret user data and leverage it in the right way.
For starters, use it to offer personalized recommendations to your shoppers. You can do it on-site with a People have also bought widget or an Other popular items in this category widget. You can do it via email and send customers links to products you think they might like, based on the purchasing habits of customers with similar interests and habits.
When you notice high bounce rates from certain pages, work on pinpointing the issue and changing them. If you notice high traffic to certain products, make sure you have them in stock at all times, and perhaps offer a bundle that includes them too, at a discounted price.
Remember: gathering data is useless (and a waste of resources) unless you use it to better your store.
Establish Rule-Based Alerts
Rule-based alerts can help you stay on top of everything that is going on in your store. You can get notified when:
- a product is selling out
- you need to make a new order
- a product has not been sold in days, etc.
These notifications can help you pinpoint the bottlenecks and identify your best-performing products. You can then take timely action and ensure a smooth experience.
You can also use similar triggers in your email marketing campaigns. Notify shoppers about abandoned carts, items back in stock, or the arrival of new items they may be interested in.
Automate Your Reporting Process
Instead of pulling manual reports from your dashboard (which hopefully features all of the data you need), you can reach for process automation and establish an automated reporting schedule that will deliver all the relevant data to your inbox at a specific time of the week or month.
That way, you can focus on the insights that can be gleaned from these figures. You’ll analyze these insights to uncover a deeper meaning.
Try to refrain from sending yourself daily reports. Sure, it’s always fun to end on a high and know just how much you’ve earned on a given day. But analyzing reports will start to take up too much of your day.
Besides, in order to be relevant, data needs to be gathered across a certain period of time. Otherwise, you may just be looking at an outlier. Quite simply, it could just be a particularly successful or a particularly slow day that may have nothing to do with your store.
Share Reports With the Right People
Unless you are a one-person e-commerce superstar, you also need to make sure the relevant reports are seen by the relevant people. Transparent, timely reporting and communication are crucial for the decision-making process, but you can’t expect anyone to make the right decisions without access to the relevant data.
Set up a simple way for everyone to know, well, everything. Data silos will only harm your performance. Even if you feel certain team members don’t need to be given access to certain information, rethink that decision. Your marketing team may not need to know how much stock of a certain item you have. But if they do, they will be able to pause an ad when stock is running low, instead of allowing shoppers to click through a link to a sold-out product.
The only exception are your financial reports, which you can retain for yourself or only share with your key people.
E-commerce analytics will play an even more important role in the near future. However, we need to remember that data without interpretation and human analysis is practically worthless.
Don’t let your data sit in a sheet or a report, and don’t use it just to give yourself an ego boost. Act on it, use it intelligently, and let it guide your store to the next stage of growth.