There are 26 million e-commerce websites worldwide. And retail e-commerce sales will reach 7.5 trillion dollars by 2025, according to Statista. These stats reveal the competition in the e-commerce space, and in such a competitive environment, businesses need advanced data and e-commerce analytics tools to hold out. Most e-commerce stores fail to survive the competition due to a lack of proper strategy, as they miss out on analyzing the data about their customer behaviors on the website, most popular products, engagement and conversion rates metrics, etc. Business owners should analyze their online store data and trends to make informed decisions to survive the fierce competition. In this article, I have discussed the important KPIs to measure for online stores and the best tools to track the e-commerce KPIs. Let’s first understand e-commerce analytics.
What is E-commerce Analytics?
E-commerce stores generate a vast amount of data daily, such as transactional data, customer activities, customer searches, user behavior on the website, log files, and various other visitor-related data. Web admins need to use all of these generated data to make decisions about the store and generate sales. E-commerce analytics is used to drive these purposes. E-commerce analytics is how to analyze and find insights from the generated data and explore unseen patterns and trends from datasets to forecast business growth and improve the current state based on analyzed data. E-commerce data can be scrutinized using advanced e-commerce analytics tools. Before discussing the e-commerce analytics tools, let’s take a look at a few criteria that regulate the performance of the e-commerce market.
Key Performance Indexes (KPIs) in e-commerce Analytics
Average Order Value (AOV)
Average Order Value will tell you how much the customer is spending on your store per order. It can be calculated by dividing your revenue by total orders. It is one of the best methods to track profits and revenue. AOV should be more than the customer acquisition cost. Every e-commerce store should be tracking AOV and try to increase it. Methods to increase average order value are upselling, selling product combos to increase order value, etc. Higher AOV allows the e-commerce store owner flexibility to provide discounts, free delivery, and absorb higher customer acquisition costs.
Conversion Rate (CR)
E-commerce stores get a lot of traffic, but it’s essential to know how many visitors buy or convert into customers. Conversion rate is the percentage of visitors converting into customers on an online store. Conversion rates give interesting insights about a website, such as website engagement, site optimization for conversions and products, etc. Optimizing conversion rates is vital for increasing sales, revenues, and AOV. E-commerce conversion rates can be optimized by using the simple design of the website, fixing technical issues, and using e-commerce analytics tools to understand customer exit points on the website and improve the overall user experience. Tracking conversion rates at an atomic level is essential. Conversions can be set up by channel, category of product, and campaigns. This setting will give you an idea of which products or channels are getting better sales. CR can be calculated by dividing the total no. of orders by total traffic and multiplying it by 100.
Shopping Cart Abandonment Rate (SCAR)
The shopping cart abandonment rate is the percentage of visitors who add the product to the cart but do not finish the checkout process. If your online store has a higher shopping cart abandonment rate (SCAR), you need to determine its reason. There can be various reasons behind it: a complex checkout process, lack of payment options, or higher shipping fees. Optimizing the checkout abandonment rate is a more straightforward task as it only requires optimizing the shopping cart by improving the overall checkout experience. SCAR is calculated by dividing the total sales by shopping carts created, multiplied by 100.
Customer Retention Rate (CAR)
Customer retention rate tells you about customer loyalty. This e-commerce KPI indicates the percentage of customers who returns to your store after their first purchase. It defines the customer satisfaction level with your products and services; a better customer retention rate implies that your product and services satisfy the customer’s needs. The customer retention rate can be calculated by subtracting the number of new customers acquired in a defined time from the total number of customers at the end of the specified time, dividing by the total number of customers at the start of that time, and finally, multiply it by 100.
Sales Revenue
Overall sales revenue is the most important KPI every e-commerce store should keep tabs on and track it weekly, monthly, quarterly, and yearly. Store owners should focus on tracking gross revenue and no. of products sold in a particular period. Most e-commerce analytics tools will have the feature to track sales on the dashboard. This KPI gives insight into your growth, product adoption, and brand reputation. The metric is as good as a brand’s progress card.
Customer Lifetime Value (CLV)
Tracking CLV is important as it advocates brand loyalty. Customer lifetime value KPI gives data about the average money that the customer will spend through their engagement with the business. CLTV measures the yield you are getting on customer acquisition cost, and it indicates the customer retention capacity of the business. Higher CLV proportionate to AOV, the more shopping frequency.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the amount the business or e-commerce store spends to acquire a customer. It is a crucial e-commerce KPI as it tells the business owners and marketers about the cost they spend to acquire a customer. If CAC is less than the average order value, it indicates marketing campaigns are performing well, but if CAC is more than AOV, then campaigns should be reoptimized to reduce the CAC. It can be calculated by dividing the spending on the campaigns and the customers acquired. Calculating CAC also helps in budget allocation for the campaigns; for instance, if you want to acquire 100 new customers, and your customer acquisition cost is $10, then the budget will be $1000 (CAC*no.of customers)
Return on Ad Spend (ROAS)
Return on Ad Spend measures returns your marketing campaigns are generating for you. It estimates the total sales or revenue generated by all the marketing campaigns. ROAS can be calculated by dividing the returns generated by campaigns and the total cost of the campaigns. This KPI is important for marketers to understand the effectiveness of the campaigns. ROAS may sound similar to CAC, but both have differences. CAC is the budget required to acquire a customer, while ROAS measures the revenue generated by the ads. ROAS calculation advises marketers on how the ads are performing; a higher ROAS indicates their spending on ads can be increased to increase the number of customers. But if ROAS is lower, it is a warning to reduce the ad spending and focus on conversion rates. Let’s now look at the top e-commerce analytics tools.
Supermetrics
Supermetrics is an excellent tool to aggregate data from omnichannel, be it Facebook, Instagram, or social adverts. The wide variety of data sets supported by Supermetrics makes it intuitive and easy to evaluate the combined data by different platforms. Supemetrics lets you customize views with parameters and tagging. Supemetrics is wholly automated and aids create a suite of reports that can be shared with the business. It collects data from all marketing platforms and adds to data analysis platforms like a spreadsheet, BI tool, or any reporting tool. It works in three steps, connect, analyze and automate. Supermetrics can be connected to any reporting tool to collect data from marketing platforms. Then it helps e-commerce store owners understand the data and finally automates tasks like adding the data to eliminate the monotonous tasks from your routine.
Savvycube
SavvyCube can help you acquire a clear picture of your business performance by analyzing Adobe Commerce, PayPal, Google Analytics, and Shopify. Savvy’s analytics tool provides you with a bird’s eye perspective of your sales and helps you make better decisions. You can enhance your customers’ shopping experience and boost order volume and frequency by learning more about their buying habits. The tools give detailed sales information by geographic location, product, and marketing channel. It is possible to track visitors who leave their shopping carts using reports that track KPIs like conversion rate and average order value. SavvyCube provides 30 days free trial with the advantage of monthly billing and no contracts. It offers paid plans starting at $49/month.
Woopra
This is a customer journey analytics tool that changes the way businesses think about, analyze, interact with, and keep their customers. The platform is built to help companies improve and grow through a customer’s lifecycle. Woopra has a unique way of tracking how people use your website, product, and mobile apps. 51+ one-click integrations with partners like Salesforce, Marketo, and Intercom help teams and tools work together better. It can also effortlessly map multiple databases without writing SQL. With the help of marketing automation and CRM solution, Woopra can build a complete view of the customer journey, trends, and segmentation. Woopra has a free plan that offers support till 500k actions/month with 90-day data retention and 30+ integrations options. Paid plan starts from $349/month.
Mixpanel
Mixpanel allows improving mobile and web applications by tracking user engagement and interaction with them. It helps business and online store owners analyze conversions and dropoffs, measure user engagement, and find ways to improve customer retention. Mixpanel lets organizations better understand their consumers by using conversion funnels and retention cohorts to analyze their behavior. As a result, you may improve our product’s usability by addressing user segment research findings. It’s simple to share since everything is visually beautiful. There are so many charts, filters, and perspectives! Mixpanel’s free version allows tracking 100k monthly users with unlimited historical data, reports, and monitoring & alerts. The growth plan starts at $25/month with all the features of the free plan and unlimited saved reports, cohorts, data modeling, analytics, and other data pipelined add-ons. Mixpanel has customized enterprise solutions with advanced controls, SSO & automated provisioning, and dedicated customer support for larger online stores.
Google Analytics
Google Analytics is an essential tool every website should have to track the website’s overall performance; It can measure the performance of your online store by analyzing the following important metrics – bounce rate, sessions, top-performing product pages, audience targeting, real-time data, converting products, etc. Google Analytics can help you track other important e-commerce metrics such as conversions, overall sales and revenue, website traffic, sources and medium of traffic, customer shopping behavior, and shopping cart abandonment rate. Overall, Google Analytics is an exceptional tool for measuring your marketing campaigns and helps analyze performance by different channels such as SEO, Google Ads, social media, etc.
Semrush
Semrush is an outstanding tool for analyzing online marketing performance. It also comes in handy for scrutinizing and optimizing the marketing campaigns for an e-commerce store. Semrush is a top-rated tool for SEO as it can assist in keyword research, backlink suggestions, and website audit for different technical SEO issues on the website. Not only SEO, but Semrush can also track your ad campaigns, perform competitor research, optimize CPC and conversions, manage social media and online reputation, etc. Overall, this tool can help you increase specific e-commerce KPIs like increasing website traffic, optimizing, and running effective campaigns.
Amplitude
Amplitude is one of the best products and e-commerce analytics tools present in the market. With Amplitude, digital teams can better understand their consumers, personalize their experiences, and track the overall success of e-commerce stores. It analyzes the conversions and suggests recommendations to improve them. It provides different features for analyzing the e-commerce store data, such as behavioral cohorts for user behavior, integration with other apps, and compliance levels for data security. Amplitude provides a starter package for free with core analytics, unlimited data retention with unlimited users with 10 million actions/month. Other paid plans are growth and enterprise that provides behavioral and product analytics platforms.
Glew
Glew is a business intelligence tool specially built for e-commerce platforms. It lets you connect your online store with business tools that can help you smooth management and multi-platform reporting. It provides individual solutions for different e-commerce operations such as product analytics, inventory analytics, marketing analytics, and customer and subscription analytics. Enterprise analytics solution includes custom reports, data warehouse, and data pipeline. Glew has three different pricing packages Glew starter, Glew Pro and Glew Plus. Glew starter is free forever with unlimited users and stores and allows for tracking of 20 crucial metrics such as LTV, net profit, top products, etc. Glew pro starts with $79/month with 250+ KPI, 40 integrations, 30 pre-built customer segments, and sync with Klaviyo and Mailchimp. Grew Plus has custom pricing 150+ integrations and other tailored solutions for bigger e-commerce stores.
Conclusion
Running an e-commerce store is not a walkover; business owners are constantly vying for increasing online sales and revenue. Improving e-commerce KPIs is backbreaking, but the right data analytics tools help understand the data, measure KPIs, and plan growth. The e-commerce analytics tool helps optimize the different Key Performance Indicators for the online store, such as user behavior, conversions, data security, etc. Implementing e-commerce analytics tools to analyze data can help you in multiple ways. Some benefits are:-
Provide insights on marketing campaigns that can help you optimize the campaigns and increase the conversionsCapture the customer data that help deliver a seamless customer experience at every touchpoint and deviceGive data-driven insights on top products that assist in managing and planning the inventory.Recommendations to optimize the user journey at every stage of funnel discovery, acquisition, conversion, retention, and advocacy
I have given the list of best e-commerce analytics tools to help you exploit the data generated by your online store and use that data to make informed decisions.
