E-commerce Analytics in 2024: 5 Benefits & Methods

The technological developments in the e-commerce sector have transformed the way businesses interact with customers, offering new opportunities to reach a wider audience and generate leads..

However, with the growing market and demand for online shopping (Figure 1), e-commerce businesses face challenges in monitoring and analyzing the vast amounts of data generated from their websites and sales channels. E-commerce analytics enables businesses to overcome this challenge by helping them understand customer behavior, optimize marketing efforts, and make data-driven decisions to improve their bottom line.

To help e-commerce businesses leverage the power of analytics, this article explores:

• What is e-commerce analytics?
• 5 benefits it offers
• And 5 effective ways to implement the technology

Figure 1. E-commerce market projections

What is e-commerce analytics?

E-commerce analytics is the practice of collecting, analyzing, and interpreting data from e-commerce platforms, websites, and other digital channels to improve business performance. It involves monitoring key performance indicators (KPIs) such as conversion rates, website traffic, and sales revenue to understand how customers interact with the business and identify areas of improvement.

Top 5 benefits of e-commerce analytics

McKinsey¹ says for businesses to transition to the new generation of e-commerce, they need to focus on “The Big Six Forces” that are driving the industry. Effectively leveraging the power of data is one of those forces.

1. Improve competitor analysis

Many Startups are joining the e-commerce industry every year (Figure 2). More startups mean more competitors. Staying ahead of competitors is a key goal for any business. E-commerce analytics solutions provide valuable insights into competitor analysis by collecting and analyzing data on:

• Competitor performance
• Customer behavior
• Market trends 

E-commerce analytics can further offer the following benefits:

• Identify where competitors are getting their traffic from
• Track competitor pricing strategies
• Analyze competitor product performance
• Monitor market trends and shifts in consumer behavior

Figure 2. E-commerce unicorns that joined the market in 2022

Sponsored

Staying ahead of a growing number of competitors can be overwhelming for some businesses. BrightData offers an AI-powered web data platform to help e-commerce businesses stay ahead of the curve. The platform offers:

• Data analytics of multiple competitors
• Track competitor pricing for their products and services
• Monitor competitor product catalogs to help you improve yours
• Monitor consumer sentiment toward your brand

2. Improve customer experience

In the current volatile business environment, for a business to grow, it has to be customer-centric. E-commerce analytics helps businesses understand customers’ buying behavior and identifies the pain points in the overall customer journey. Businesses can identify areas where customers may be struggling or experiencing friction by analyzing data related to:

• Website traffic
• Click-through rates
• Conversion rates

For example, shopping cart abandonment is one of the biggest issues faced by e-commerce businesses (Figure 3). If customers are often abandoning their shopping carts during the checkout process, businesses can use analytics to pinpoint the source of the problem and make changes to improve the checkout process.

Figure 3. Average shopping cart abandonment rates by devices

3. Increase sales and revenue

E-commerce analytics solutions allow businesses to optimize their marketing efforts and tailor offerings to meet customer needs more accurately. For instance, businesses can identify which products are most popular and which marketing channels are most effective in increasing sales by analyzing customer purchase data. They can then use analyzed data to refine their marketing strategies and focus their efforts on the most profitable products and channels.

4. Identify and fix website issues

No customer likes a faulty website. Through effective e-commerce analytics, businesses can debug technical issues with their websites that may be affecting customer experience and driving down sales. For example, by monitoring visitors behaviors and website traffic, businesses can identify links that are broken, pages that are slow to load or other technical issues that may be driving customers away. Businesses can improve their websites’ performance and improve the customers’ shopping experience by fixing these issues.

5. Optimize marketing campaigns

Measuring the impact of marketing campaigns and identifying areas for improvement is one of the most important functions of a business. E-commerce analytics can help streamline that process. It allows marketers to track metrics such as click-through rates, conversion rates, and return on investment (ROI), to identify which campaigns are most effective and which channels are driving the most traffic and sales. They can then use that information to refine their marketing strategies and optimize their campaigns for maximum impact.

Top 5 business areas to implement e-commerce analytics

This section highlights the top 5 areas in which you can implement e-commerce analytics in your business.

1. Website analytics

Website analytics is a part of e-commerce analytics that enables businesses to manage the data generated from their websites related to website traffic, user behavior, and conversion rates. Businesses can obtain insights into how customers interact with their website and identify areas for improvement by tracking key metrics such as 

• Bounce rate
• Time on site
• Conversion rate

For instance, an online store notices that a large percentage of website visitors are leaving the site after viewing only one page. By analyzing user behavior and activity data through an e-commerce analytics tool with website analytics features, the company found that the main navigation menu is confusing and difficult to use. Their team can then make changes to the menu, resulting in an increase in pageviews and a decrease in bounce rate.

2. Sales analytics

Sales analytics is also an important part of e-commerce analytics. A tool with sales analytics features can allow e-commerce businesses to access data related to 

• Sales revenue
• Order volume
• Customer purchase behavior

Businesses can analyze this data to see and identify patterns and shifts in their sales and customer behavior. Analyzed sales data enables businesses to identify their top-performing products, and optimize pricing strategies.

 Suppose an online retailer of sports goods notices that a certain product is selling significantly better than others. By analyzing the sales data, it identifies that the product is most popular with customers in a specific demographic. The retailer can then targets this demographic with more specific marketing campaigns and ultimately increase in sales revenue.

3. Social media analytics

Social media marketing is one of the top marketing channels to yield the highest ROIs (Figure 4). Leveraging an e-commerce analytics tool with social media analytics features is crucial for efficient social media marketing performance. Such tools provide access to data related to social media engagement, follower growth, and content performance. 

By analyzing this data, businesses can identify which social media channels are most effective in reaching their target audience and which types of content are most engaging.

For instance, if a clothing brand notices that traffic on its Facebook page has been declining over time. With social media data analytics, it can identify that the majority of their followers are now using Instagram instead of Facebook. The brand can then shift its social media strategy to focus more on Instagram, resulting in increased engagement and follower growth.

Figure 4. Top benefits of social media marketing worldwide in 2022

4. Email marketing analytics

Analyzing data from email marketing is also an essential part of effective e-commerce analytics. A solution with email marketing analytics capabilities can offer businesses access to data related to: 

• email open rates
• click-through rates
• conversion rates

You can use an email scraper to access and collect data such as the target audience’s email addresses. By analyzing this collected data, businesses can identify which types of emails are most effective in driving sales and engagement and optimize their email approach accordingly.

Suppose an online electronics store uses email marketing to share its campaigns. The business notices that their email open rates have been steadily declining over time. By analyzing email marketing analytics data, they detect that the subject lines of their emails are not engaging enough to entice customers to open them. The store can then test different subject lines and observe the impact they make on open rates and click-through rates.

5. Customer feedback analytics

A customer-focused business needs to have effective customer feedback analytics practices in place. Web scraping tools help businesses to automatically gather customer feedback, such as customer review data, from web sources and social media platforms. E-commerce analytics solutions with customer feedback analysis features can provide businesses with data on: 

• Customer satisfaction
• Pain points
• Customer preferences and expectations. 

Smart analytics solutions also provide insights to businesses on how to use this obtained data to improve their products, services, and overall customer experience.

For instance, the data can help identify that customers are frustrated with the amount of time it takes to receive customer support after they make a complaint. By using these insights, a business can implement changes to its customer support process and observe the impact on customer satisfaction ratings.

Further reading

• E-Commerce Sentiment Analysis: Top 3 Applications
• Ultimate Guide To Competitor Analysis for E-Commerce

References

1. “Becoming indispensable: Moving past e-commerce to NeXT commerce”. McKinsey Reports. November 15, 2022. Retrieved: March 01, 2023.