DAY 8 On an ecommerce platform, what monitoring and analytics would implement and why?

 DAY 8

On an ecommerce platform, what monitoring and analytics would implement and why?

What is ecommerce analytics?

Ecommerce analytics is the process of gathering data from all areas that have an impact on your online store and using this information to understand the trends and the shift in consumers’ behavior to make data-driven decisions that will drive more online sales.

eCommerce data analysis is used to help businesses better understand data and effectively use it for customer-centric initiatives, including:

• Personalized marketing
• Improved conversion rates
• Omni-channel merchandising
• Store promotions
• AI-enabled commerce
• Inventory planning
• Supplier management
• IOT and real-time visibility
• Improved customer service
• Reduced costs

According to Statista, the number of people buying goods and services online is expected to reach 2.14 billion in 2021, up from 1.66 billion global digital buyers in 2016.

Benefits of eCommerce analytics

With e-Commerce data analytics, organizations can spot areas of opportunity, predict important trends, and gain efficiencies that can lead to growth.

Produce data-driven insights to inform strategy

Data analytics helps eCommerce businesses gain insight into what is happening in the business and can uncover important market trends and risks.

Better understand customer demographics to tailor individual experiences

Understanding how consumers interact with a brand can inform what types of content, formats, and channels resonate with key demographics. eCommerce data analytics can also help optimally position product mix and enhance the buying experience for shoppers.

Optimize pricing, inventory and up-sell performance

eCommerce data analytics can give organizations a granular picture of what drives prices for each customer segment. That insight can help uncover the best price points at the product — not category — level to earn maximum revenue.

Analyze patterns or trends in the data for accurate forecasting

eCommerce analytics allows organizations to understand how their business is performing and how it will likely perform in the future. This forecasting informs everything from sales and hiring goals to ensuring the right products are available at the right time to meet customer expectations.

Measure the effectiveness of sales and marketing campaigns

Data analytics can help eCommerce businesses measure the effectiveness of marketing campaigns, inform holistic marketing programs, gain more omni-channel traction, and improve decision-making.

5 key areas of ecommerce metrics

When it comes to ecommerce metrics, one common mistake companies make is they get overwhelmed just by thinking how much information they need to gather. So in most cases, they decide to make their decisions based on a gut feeling instead of real insights. 

To make things simple and clear, we’ll separate the most important ecommerce metrics in 5 pillars that cover the whole customer lifecycle. 

1. Discovery

First things first. You have to gather information for your audience and create awareness that will lead them to your online store.

Reach — the number of people who have seen your email or content on social media. Here we talk about your subscribers and social media followers, and the best way to improve this metric is by regular campaigns to get more people to sign up or follow you on social media

Impressions the total number of times people saw your post

Engagement The rewarding feeling of getting likes and shares is the ultimate goal of regularly communicating with consumers across channels. 

2. Acquisition

All the time and money you invest in the discovery phase is worthwhile if visitors actually get to your online store. Google Analytics gives a great overview of different channels’ performance and goal conversion rates. 

Click through rate (CTR) — the percentage of users who click on a specific link, to the number of total users who view an email or social media post  

Cost per lead (CPL) — the average cost of generating new business leads

Cost per acquisition (CPA) — this metric goes one step further and measures the average cost of acquiring a customer

 

3. Conversion

Sales conversion rate — the percentage of visitors who make a purchase on your online store; increasing the traffic to your website will help you reach your target sales. 

Average order value (AOV) — the average amount of money spend when a customer places an order on your website

Cart abandonment rate — the percentage of shoppers who add products to the shopping cart but abandon your store before completing the purchase

4. Retention

Always have in mind that acquiring new customers is way more expensive than retaining existing ones. On top of that, increasing customer retention rates by 5% increases profits by 25% to 95%, according to research done by Frederick Reichheld of Bain & Company.

Customer lifetime value (CLV) — represents the total amount of money a customer is expected to spend in your business, during their lifetime; one of the main goals for every company is increasing this value

CLV = Customer value (CV) x Average customer lifespan (ACL)

ACL = Total customer lifespans / Number of customers

CV = Average purchase value (APV) / Average purchase frequency rate (APFR)

APV = Total revenue / Number of orders

APFR = Number of purchases / Number of customers 

5. Advocacy

Shoppers that reach this stage are far more than regular customers. They are your brand ambassadors. Not only do they love your products, but they’re also telling their friends and family about it.

• Promoters — your most loyal customers
• Passives — customers that are satisfied with your service but not happy enough to be your brand ambassadors 
• Detractors  — red flag, unhappy customers who are not just unlikely to buy from you again, but they may even discourage others from doing so. 

I have taken information from google Ecommerce analytics 101 by Kaleigh Moore.