Analytics lets you establish KPIs, track metrics, and act on the data you gather.
Keep reading to see part of our eCommerce business guide and learn the ins and outs of eCommerce analytics, the tools you can use, and the metrics you'll want to track.
What Is eCommerce Analytics?
eCommerce analytics is the act of gathering data that impacts your business and using it to understand eCommerce trends and make data-driven decisions.
This eCommerce performance analytics data is collected from a number of places, including your headless eCommerce platform, eCommerce payment gateway, sales team, and more. This data establishes how well your business is doing and defines goals.
eCommerce Analytics Tools
To understand how your eCommerce business is doing, you need to gather data. Making sure you get the most accurate data requires using a few tools.
Here are the eCommerce analytics tools we recommend:
- Google Analytics. Google Analytics eCommerce tracking is the most important tool in your analyst's tool belt. It can be integrated with your website or online marketplace to track a slew of metrics. It can let you know how a customer got to your site, how many pages they viewed, what they clicked on, and more. You won't find a more useful tool for understanding your customers than Google Analytics.
- SEMrush. If you want to have a successful eCommerce business, you need to understand your eCommerce SEO. You can track the SEO terms you rank for, compare yourself against competitors, and even research new keyword ideas. This research can be used to increase visits to your site and you might even get new eCommerce business ideas.
- Crazy Egg. This is one of the most popular analytics tools for small businesses for two reasons. First, it's very affordable and even comes with a 30-day free trial. Second, it produces a heatmap of your site to show where visitors are clicking. This lets you know the effectiveness of different elements on your site. You can then adjust your user experience to maximize engagement and increase eCommerce sales. This tool is generally more useful for direct to consumer brands, but that's just one way that B2B vs B2C differ.
eCommerce KPIs and eCommerce Metrics
KPIs, or key performance indicators, and metrics are types of data that are used by a business to determine success.
Here are the top ten KPIs and metrics to look at:
- Conversion rate. Your conversion rate is the percentage of website visitors that made a purchase. This number lets you know if your B2B marketing or DTC marketing strategies are working. If this number is too low, you'll want to look into why your prospects aren't becoming customers.
- Customer lifetime value (CLTV). CLTV is a measure of the total value each customer has to your business. It is a mixture of conversion rate, average order value, and return customer rate. It can uncover issues with customer retention and tell your sales team that they need to work on maintaining relationships.
- Average order value (AOV). All businesses will get large and small orders, whether they’re a B2B business or sell direct to consumer. By calculating the average value of all orders, you can determine if you need to make changes that avoid losses. You may want to establish a minimum order quantity (MOQ), use a more cost-effective eCommerce shipping software, or reduce the time between purchase and eCommerce fulfillment.
- Profit margin. Every business owner likes to see a large profit margin. This number shows the difference between your costs and revenue. If this number is low, it means you need to look at increasing prices or reducing costs like inventory carrying cost. Remember to factor in all costs related to your B2B eCommerce platform, B2B online marketplace, or owned eCommerce site.
- Return on investment (ROI). If you pay for any form of advertising, you'll need to calculate your ROI to determine effectiveness. This will let you know how much money you make off of every dollar spent. If this number is negative or too low, you'll need to review your ads and see why they aren't working.
- Cost per acquisition (CPA). Another paid advertising metric to look at is CPA. This is the total ad spend divided by buyers. If this number is lower than the revenue those customers bring in, your ads are hurting more than helping.
- Bounce rate. This metric tells you what percentage of website visitors leave without clicking on anything. It's a very valuable number that can highlight issues with page speed, website quality, or just a lack of good content. Focusing on strong SEO content for eCommerce can pay dividends here.
- Organic search rankings. Though a more complicated metric than many of the others, organic search rankings are very valuable. They show what words people search to find your site and how well you meet their needs. These can be improved by looking at your eCommerce SEO efforts and making changes to your on page SEO for eCommerce. Luckily, food suppliers that use BlueCart eCommerce don't have to worry, as it has already been optimized for SEO. Just upload your products and imagery and see the orders roll in.
- Gross Merchandise Volume (GMV). GMV is a measure of the total value of products sold during a given time. It's a valuable metric that signifies overall success. If this number is increasing, it means your bottom line is as well. This metric is very valuable for wholesalers (see wholesale meaning) as it's vital to sell large quantities when you're selling wholesale.
- Customer satisfaction. The final metric you need to keep an eye on is customer satisfaction. Though it's harder to quantify, it affects every aspect of your business. Regularly speak with your customers or use surveys to get a sense of their happiness. You might discover there are issues with a part of your business that you've been neglecting, like using underperforming eCommerce platforms.
Analytical by Nature, Profitable by Choice
One of the surest ways to achieve success as an eCommerce business owner is to rely on analytical data. Whether you're looking at conversions, visits, or customer satisfaction, you can adjust course based on your findings. Remember, your eCommerce business plan template isn't written in stone. You should also invest in eCommerce software and eCommerce packaging that can help you reach your goals.