You’ve probably heard people talk about how big game-changer data and data analytics is in the eCommerce business. Truth be told, big data analytics isn’t some new wave, it’s the very technology that is boosting your conversion rates and sales right now. Name any vertical of a business, and eCommerce analytics is having an impact.
In fact, data within the eCommerce realm can be copious especially since the business and interaction with customers is done online. However, it may not always be easy for businesses to properly analyze the data they are collecting. This may come from the fact they have so much data, they don’t even know where to start. To narrow down the focus, establish clear cut goals, data analytics is effectively utilized in the eCommerce industry. It all comes down to finding a way to increase conversion rates at the end of the day. If you run an e-commerce store using any of the marketable platforms, you’ve got access to a massive amount of data. Your customer insights data offer untold opportunities for increasing revenue and growing your business only when you are doing it efficiently.
What is eCommerce Analytics All About?
You must have seen online brands all over Facebook, Instagram, emails and possibly every other social channel promoting their products, trying to target the same audiences.
But if you ask me, they’re all just doing what the other one is. The e-commerce marketing strategies are just a shot in the dark. While it works for some brands, others simply fail at turning these tactics into great sales.
The reason being, lack of tracking and recording the right data.
Broadly speaking, data analytics in the eCommerce space is a way to gain a deeper understanding of your current and potential customers. More specifically, these analytics look at a number of important factors such as the site’s bounce rate, the keywords that attract the most customers, what customers click on, where customers come from, etc. Needless to say, that’s a lot of information for eCommerce organizations to hold onto. The more customers, the more data they’ll need to collect and analyze. This type of data is extremely valuable since it’s one of the main ways that businesses can gain important insights into who their customers are and what makes them behave the way they do, especially when it comes to purchasing decisions.
Talking about increasing conversions, eCommerce analysis with big data is almost an essential strategy for eCommerce companies looking to remain competitive. Right from on-site behavior to how shoppers interact with your social media advertisements, emails, and other strategies of getting them to make a purchase again, e-commerce analytics comprehensively brings it all together.
Why do You Need eCommerce Analytics?
Having some sort of analytics tool is pretty much indispensable to having a successful e-commerce business. Integrating and using analytics tools on your eCommerce website is a major key to success and will help you score a huge advantage over your competitors. Not paying attention to the minute analysis means passing on vital information that can help you to stand out from your competitors in the eCommerce world.
Without analytics tools, it’s impossible to really understand the various factors that drive the customers to make purchases, how users get to your site, how they behave on it, which products they are interested in, wherein the sales funnel you lose potential buyers and generally how to optimize that will lead to more sales.
How to Take Data-Driven Actions
Using the critical AARRR metrics, you can grow your eCommerce business immensely. Let us get into the different parts of the AARRR roadmap:
image source: Twitter
Simply put, how you get your visitors. Most businesses see visitors coming from search engines like Google or Bing, social networks, and paid advertising (via Google AdWords, etc). Regardless of what your user acquisition strategy is, it’s important to track where they’re coming from and double down on the sources that feed your website consistent traffic. A typical store runs multi-channel campaigns, so it is important to monitor which one works best for them. Is it social media that is driving more sales or are shoppers coming through the search engine? Are your email campaigns doing better than your retargeting ads? Uncover it all with e-commerce analytics.
This is when a user signs up for a product trial or for your newsletter. The wheels are moving and they’ve started to take actions that lead to them purchasing from you. A shopper just subscribed to your newsletter. But, hold on, that doesn’t guarantee a purchase. The shopper may be interested in what you offer but they still need a little nudge to actually convert. This may require retargeting them with ads or sending them multiple email campaigns. E-commerce analytics will help you identify the channel that is the most effective at turning subscribers into customers.
Remember what we said at the start? A shopper has at least ten brands to choose from when making a purchase. Simply put, there is no guarantee that they will come back to you for another purchase. That’s where retention comes into play.
E-commerce analytics studies the activities of the shoppers that visit your store. It takes into account how they browse products, which ones they show interest in the most and which ones they do purchase.
Collating this data over a specified period of time helps you segment your customers.
This enables you to create personalized customer journeys and campaigns to keep these customers engaged. The more they come back to your store, the higher are the chances of them making another purchase!
Oh, and did you know that increasing your customer retention by 5% can increase your profits by 25-95%?
So you have these repeat customers but how do you grow and take your business to the next level? Through referrals! Chances are, your customers have family and friends who could be interested in what you’re offering and nothing is more powerful than a referral from a family member or friend. Referral program helps in eCommerce growth effectively through word of mouth So when you’re already focusing on customer retention, why not reach more customers through them? You can set up a referral marketing program offering different incentives to shoppers for inviting their friends.
But with e-commerce analytics, you can identify which of the incentives really nudged the shopper to not just make a purchase, but invite more people to the store.
In the end, it is all about sales and the money your store makes. After all, that’s how a business runs. With all the data on one dashboard, an e-commerce analytics platform identifies and highlights the market opportunities. Is there a certain segment of shoppers that are more likely to buy bundle deals? Is there a segment that is willing to pay more for a high-quality product? With data, you can adjust your product pricing and campaigns accordingly to cash in more revenue.
Simply knowing about eCommerce data analytics isn’t enough; You have to implement the right strategy at the right time that will keep your sales funnel strong and business going but with so many options, it’s best to narrow down and focus on just a few.
Here are some of the ways you can use eCommerce data analytics in order to get kind of conversions you’ve always wanted.
Ways to Use eCommerce Analytics to Boost Conversion Rates
Product Page Optimization
The product page is where all the action happens. It’s where the customer can see your product, read up about it and peruse other customers’ reviews. Do a product page well, and you’ll see your sales take off. Do it poorly and sales will struggle to get off the ground. But if your product pages aren’t performing well, how do you figure out what the problem is and how to fix it?
Product page optimization will collect the data gathered by customer actions and then analyze it to observe deeper insights. Sales data analysis assists you to determine where the problem lies in getting a customer to go from browsing to buying. Perhaps the page doesn’t flow well with a layout that does a poor job directing the visitor to where they want to go. Or maybe the call to action buttons aren’t prominently displayed or do a bad job communicating what will happen when the customer clicks on them. These are only a couple of factors that can affect conversion rates.
One key to better engaging your customers and responding to their needs is through predictive analytics. Analysis of the data you collect can help you determine what customers expect. Take recommendation engines for example. Based on what customers have looked at and purchased in the past, it can be determined what a specific customer would likely buy in the future. Think of it like a hyper-personalized marketing approach. Predictive analytics makes sure that what you recommend to customers is more likely to work.
Predictive analytics can also help you determine what prices to sell products and services at. Gone are the days of simply choosing the intersecting point of the supply and demand curves. In today’s eCommerce world, a customer’s willingness to pay a certain amount can vary depending on the time of day, week, month, or year along with any number of other factors. Price optimization can pinpoint the best prices for customers to pay that will lead to the most conversions, helping your business grow. Analytics of this type can also play a role in determining when businesses should respond to customers and what responses will yield the best results.
Choosing the Best Match
Sometimes selecting a single approach isn’t possible since customers can vary greatly in their behavior. That’s when utilizing best match algorithms can be extremely useful. This type of algorithm tests out two different versions of something — a landing page, call to action button, etc. — and recording the data on which is more effective at getting the desired reaction from a customer.
Based on this information, you can get a better picture of what will lead to more conversions. Some analytical capabilities can change out the choices depending on times of the year, ensuring you are getting an accurate picture of what customers are doing.
Getting the Data
eCommerce data analytics needs the extraction of the data in the first place. These data extraction solutions also give you the ability to monitor customer sentiment, helping you understand how customers are responding to your product as well as your competitors’ products. Data extraction from websites makes implementing strategies of eCommerce much easier.
image source: Paymill
There’s no single solution that will lead to incredible conversion increases, but eCommerce data analytics can become a key component in your online sales strategy. It’s an effective way to understand your customers and optimize your online presence so that your business may continue to grow.
Hope this article gave you a sense of how the E-Commerce industry leverages analytics to make customer experience delightful.