This Is How to Use Ecommerce Analytics for Optimal Performance [CHECKLIST]

This Is How to Use Ecommerce Analytics for Optimal Performance [CHECKLIST]

Elena Doynova

Mar 26, 2024 • 8 min read

This Is How to Use Ecommerce Analytics for Optimal Performance [CHECKLIST]

No matter the size of your online store – whether you sell a single product or a catalogue of thousands, optimization is a daily struggle. If you disagree, we’d like to hear about your setup and how you keep up with the fierce competition in e-commerce. For us, the only way out is through rigorous testing and iterating, and we’ve been putting this hypothesis to the test in the past six months. If you want to hear about how ecommerce performance analytics helps our customers make data driven decisions about anything from marketing strategies to inventory management – keep reading!

What are ecommerce analytics for performance?

Ecommerce performance analytics are tools and processes used to measure and evaluate how well an online business is doing. They track various metrics to provide insights into sales, customer behavior, and overall website performance.

10 Key Metrics to Track the Performance of Your Ecommerce Business

Tons of guides will tell you you need a complex dashboard with a hundred charts to keep track of. The truth is, the most basic setup gives you answers to most questions. In this section, we’ve tried to summarize the most important metrics for your sales performance analysis, marketing campaigns, and customer experience optimization. While the list is not exhaustive, these metrics are a great starting point for all ecommerce analytics deep-dives, and understanding them is foundational for building a successful ecommerce business. And if you decide to add more to your list (you probably will), just remember to keep it simple.

Sales and Revenue Metrics

The following metrics are every e-commerce manager’s (why not even the CEO’s) best friend as they give you a glimpse into the growth and profitability of the business.

Gross Revenue: This is the total sales-generated income before any deductions. It’s crucial because it reflects the overall health of your business.

Net Revenue: This is the revenue after deducting all expenses like discounts, refunds, and shipping costs. It gives a clearer picture of your actual profits and whether the business is set on a growth trajectory.

Average Order Value (AOV): AOV is the average amount spent by customers in a single transaction. Tracking this helps in devising strategies to increase sales value.

Customer Acquisition Metrics

Just like a brick-and-mortar store, every online store needs visitors. Your marketing and acquisitions team will surely be interested in dwelling on the following metrics…

Conversion Rate: Conversion rate indicates the percentage of visitors who complete a desired action, like making a purchase. It shows how effective your website is in turning visitors into customers.

The best ecommerce analytics tools will show you this metric first

Customer Acquisition Cost: CAC is the cost associated with acquiring a new customer. Keeping this metric low ensures better profitability.

Customer Lifetime Value: CLV represents the total revenue a customer is expected to generate over their entire relationship with your e-store. It helps in prioritizing customer retention strategies.

Customer Behavior Metrics

Customer behavior is elusive – we get it that you spent countless nights poring over funnels, hoping to discover valuable insights about drop-offs and you know, getting to know your average customer. But it’s not only the quantitative data that matters – you also need to consider qualitative data analytics.

Session Duration: Session duration measures the time a user spends on your website during a single visit. Longer durations often indicate higher engagement and interest (such as browsing product categories or reading product descriptions).

Returning Visitors: Tracking returning visitors helps in gauging customer loyalty and the effectiveness of your retention efforts. You don’t want to convert a visitor into a one-time purchase. You want to convert them into a loyal customer!

Frustration signals: Ever heard of dead clicks and rage clicks? These nasty metrics come to the front when your customers are struggling. Be it a broken link, an image that looks like a link but isn’t, a button that doesn’t work… It helps to keep track of these to spot arising issues and fix them promptly.

Session replays: Customer feedback is one thing, but data analytics paints a whole different picture. Sometimes, the two might be pointing in different directions. Watching an entire user session can be eye-opening. The funny thing about UX and UI is that we often think visitors will use our website in one way and they find ten other ways to use it that are not covered by any user journey we’ve ever imagined.

Choosing the Right Ecommerce Analytics Tools

Selecting the right analytics tools is crucial for performance tracking. Tools like Google Analytics offer comprehensive features for analyzing ecommerce data, including sales performance, user behavior, and traffic sources. But which one to choose? Or rather, which combination is the most reliable?

Google Analytics

Google Analytics is widely used in the ecommerce industry due to its robust features. It provides detailed insights into website traffic, user behavior, conversion rates, and more. Sadly, with the introduction of GA4, many businesses have struggled to understand the new interface. Still, it remains the most widely used tool thanks to Google Analytics Enhanced Ecommerce – a portion of its integration entirely dedicated to the biz.

Aren’t there more specific tools, you ask?

Ecommerce-Specific Analytics Tools

Top ecommerce analytics tools use a combination of strong data collection practices (proprietary pixels or snippets), a variety of data sources (integrating marketing data with sales performance and store performance), and qualitative data (session replays, customer feedback, etc.) to paint the full picture.

From Hotjar to Triple Whale, the niche is rather busy. This is why we at SessionStack had to develop something truly unique to stand out.

Meet SessionStackAI: the conversion rate optimization genie that takes customer behavior data and transforms it into actionable insights you can implement right away and watch your ecommerce metrics bloom. If you want to skip the entire checklist thing this article is all about, you can learn more about SessionStackAI at the end and save some time – now and forever!

How Analyzing Ecommerce Data Can Drive Success: The Checklist

Ecommerce data analysis contributes to business success by providing insights into the customer journey, identifying high-performing pages, enabling testing and optimization, improving conversion rates, and implementing personalized experiences to enhance customer satisfaction. Phew, that’s a lot to swallow, right?

As the owner or manager of a small or medium-sized online store, your resources are limited, making time and spending crucial elements for success. Lack of insight into the effectiveness of your marketing efforts can result in wasted time and financial resources. Additionally, without this understanding, you risk overlooking profitable channels, as your budget is dispersed among both profitable and unprofitable marketing strategies rather than being optimized for maximum returns.

Step 1: Understand the customer journey

Knowing your customers intimately helps you optimize user experience and drive conversions. What’s more, understanding the why behind shifts in consumer behavior gives you a competitive edge – as these shifts are sometimes connected to market trends.

How does this translate to everyday operations? You can use your good ol’ web analytics tools to monitor traffic – landing pages, drop-off points, path analysis, engagement. But to go deeper, you will need to ask the question Why? – ecommerce analytics tools add to that layer in the form of session recording and replays, funnel analysis with drop-off insights, sentiment analysis, or bug monitoring. With the help of all these relevant data points you can paint the full picture of the customer journey – not only fragments of it.

Analyzing sales data in e-commerce can help increase sales revenue.

The takeaway?

  • Examining ecommerce analytics gives you an insight into customer acquisition, customer demographics, viable marketing channels, and conversion optimization opportunities: an overview of the entire ecommerce ecosystem rather than only parts of it.

Step 2: Identify high-performing pages

Optimizing your online store based on analytics insights enhances conversion rates and boosts sales. That much you should already know. But how do you do this? First, you need to identify which pages bring you the best results – and find out why.

You can find your best-performing pages in terms of conversion rate easily in Google Analytics. But it won’t tell you what the weakest points on those pages are – the holes in your bucket that you can (sometimes rather easily) fix. Session replays can do that – watching specific user journeys can help you spot problematic areas that lead to a drop-off. Unfortunately, watching session replays is a tiresome activity and you might still miss important insights… We have a solution but you’ll have to wait a bit!

Step 3: Use ecommerce analytics for testing

A/B testing is the holy grail for conversion rate optimization. It gives you a statistically-backed ‘green light’ for implementing optimizations. But how do you find what to test in the first place?

Ecommerce analytics data can serve as a great entry point for A/B testing. Apart from basic traffic quality analysis to enhance marketing efforts and search engine optimization, in-depth funnel analysis and qualitative data can also help ecommerce companies meet their business goals via better tests.

This can take the form of uncovering frustration with dead and rage click analysis, improving forms to reduce friction on checkout, and adding more payment methods for customers who struggle to finish their purchases.

Step 4: Add Personalization

Personalized recommendations based on ecommerce data enhance customer experience and increase sales. Personalization can take many forms. The most typical one is the Recommended products section that you’ve no doubt encountered yourself. But how about customizing entire customer journeys based on historical data? You can take a product category and examine the ways your customers interact with it – and you might be surprised how much these interactions can vary between the categories in your ecommerce store.

Step 5: Improve conversion rate

Analyzing data from ecommerce platforms is proven to help in reducing checkout abandonment and optimizing the entire journey for increased online sales. But it’s a long, iterative game that most businesses have no resources to play. Whether it’s a family-run e-shop specializing in organic beauty or a marketplace with thousands of products, we believe we have the answer beyond building endless customer segments, exploring the next trendy social media, or tapping into another marketing channel. That’s simply spreading your resources far too thin and impact is not guaranteed…

SessionStackAI makes leveraging ecommerce analytics easy

To help ecommerce businesses improve their conversion rates, we did a rather simple thing (that turned out to be quite difficult but that’s a story for another time). We built an AI-powered insights engine that captures customer data, dissects it and spews out bright ideas ready to be implemented. SessionStackAI was built on top of our existing state-of-the-art session recording platform and enhanced with proprietary machine learning models. The result is a digital analyst that works tirelessly to help fuel your optimization efforts:

  • it helps uncover unexpected customer behavior
  • it helps fix UX/UI issues that might go unnoticed for a long time (or forever)
  • it illuminates technical issues
  • it helps quantify the impact of each issue so that you know which ones to prioritize

SessionStackAI is the right hand of every ecommerce business owner, from building ecommerce strategies to maintaining a blooming set of key performance indicators. Customer data is so much more than numbers someone has to pore over in the corner – it’s the key to increasing customer lifetime value and ecommerce sales.

Frequently Asked Questions

How do you measure the performance of an ecommerce website?

The performance of an ecommerce website can be measured using various key performance indicators (KPIs) such as conversion rate, average order value, customer acquisition cost, bounce rate, and website traffic. Analyzing these metrics provides insights into user engagement, sales performance, and overall effectiveness of the website in driving revenue.

What is the most popular ecommerce analytics tool?

Google Analytics is widely considered the most popular data analytics tool. It offers comprehensive insights into website traffic, user behavior, conversion rates, and more. While its robust features and integration capabilities make it a preferred choice for businesses of all sizes, it lacks a specific focus on e-commerce so complementary tools such as SessionStack, Triple Whale, or Hotjar might be needed.

What are the most important metrics for eCommerce?

The most important metrics for ecommerce include conversion rate, average order value (AOV), customer lifetime value (CLV), customer acquisition cost (CAC), cart abandonment rate, return on investment (ROI), and website traffic. These metrics help businesses gauge performance, identify areas for improvement, and optimize their ecommerce strategies.

See what SessionStackAI can do for your business