According to a recent study by Deloitte, almost half of respondents believe that analytics assist them in making better business decisions. Yet, only a tiny fraction of e-commerce businesses use analytics. This is quite alarming, as e-commerce businesses stand to gain a lot by tracking and analyzing their data.
Here are five important e-commerce analytics that you should be keeping track of:
1. Segmented Conversion Rate
Conversion rate is the percentage of visitors to your e-commerce store who complete a purchase. It’s calculated by dividing the number of sales by the total number of visitors.
For example, if your store had 100 visitors and five sales, the conversion rate would be five percent.
This conversion rate is not the end-all-be-all figure, though. It’s important to break it down by segmentation. That is, by traffic source, product category, device type, or other factors.
Your e-commerce business’s conversion rate will be different for each segment of traffic that you attract. For example, your conversion rate for paid search traffic might differ from your conversion rate for organic search traffic.
It is important to track and measure the conversion rates for each type of traffic so that you can identify which sources are generating the most sales. This will help you to allocate your marketing resources more effectively.
You can calculate the segmented conversion rate by dividing the number of sales by the total number of visitors within each segment. For example, you might want to know your conversion rate for paid search traffic, organic search traffic, and social media traffic.
2. Segmented Revenue
In the same way that you should track segmented conversion rates, you should also track segmented revenue. Segmented revenue is the total amount of money generated by each type of traffic.
Segmented revenue value can be a more useful metric than conversion rate because it takes total revenue into account, not just the number of sales.
For example, if you have a high conversion rate but a low average order value, your overall revenue might be lower than someone with a low conversion rate but a high average order value.
By tracking segmented revenue, you can see which types of traffic are generating the most revenue for your e-commerce business. This will help you focus your marketing efforts on the sources producing the best results.
3. Funnel Abandonment
Cart abandonment is a common problem for e-commerce businesses. In fact, according to eMarketer, the average cart abandonment rate is around 69 percent.
This means that nearly seven out of every ten people who add items to their shopping cart end up abandoning them.
The good news is that you can do something about this high abandonment rate. One way to reduce it is by tracking funnel abandonment.
Shopping cart abandonment occurs when someone adds an item to their shopping cart but doesn’t complete the purchase. This can be due to a variety of reasons, such as not being able to find the checkout process or being asked for too much information during checkout.
By tracking funnel abandonment, you can identify which steps in the purchase process are causing people to abandon their carts. This will help you fix the problem areas and increase your conversion rate.
You can track funnel abandonment by creating a funnel report. This report will show you how many people progress through each step of the purchase process and how many people abandon their carts at each step.
4. Percentage of Returning Customers
Another important e-commerce metric is the percentage of returning customers. This figure shows how many of your customers are coming back to make another purchase.
The percentage of returning customers can be a good indicator of customer loyalty and engagement. It can also be a predictor of future sales.
You can track the percentage of returning customers by creating a Customer Lifetime Value report using Google Analytics. This report will show you how many customers return and the average amount they spend each time they purchase from you.
Return customers are a valuable asset for e-commerce businesses. They don’t need to be acquired, which means that you don’t have to spend money on marketing campaigns to bring them back.
Instead, you can focus your efforts on retaining and engaging your existing customers. This will help you increase your revenue and profitability.
They are also likely to leave positive reviews and referrals, which can help attract new customers.
5. Average Order Value
This e-commerce metric shows how much people are spending on average per purchase. It’s calculated by dividing the total revenue by the number of orders.
The average order value can be a useful metric for understanding your customer’s purchasing behavior. It can also be used to identify areas where you could increase your revenue by increasing the average amount that people spend on each purchase.
You can increase the AOV using strategies such as:
- Offering discounts for larger orders
- Add more high-priced items to your catalog
- Offering free shipping on orders over a certain amount
The average order value can be a valuable metric for e-commerce businesses. By tracking it, you can identify areas where you could increase your revenue by increasing the average amount that people spend on each purchase.
E-Commerce Analytics to Keep Track Of
These are just five of the important e-commerce metrics that you should track. By monitoring these metrics, you can improve your e-commerce business and increase your revenue.
If you’re looking for more marketing tips and e-commerce analytics tools, The E-Comm Boardroom is a great resource. We provide in-depth training on all aspects of e-commerce analytics, from understanding your data to using it to make decisions about your business.
Contact us today to get a free business audit and consulting session.