In the age of ecommerce, it is the customer who is called the king. The beauty of ecommerce is that it has put the customer in a central position to decide about the worth of the products. This has served multiple stakeholders in the ecommerce market. These stakeholders are trying their level best to provide the best possible shopping experience to the customers and other players in this domain. This article is aimed to launch a sequential probe into ecommerce analytics. It also endeavors to understand the art of speeding up online sales with the aid of insightful data.
Ecommerce analytics- The first look
Ecommerce is all about the art of collecting data from different sources either directly or indirectly and analyzing it deeply. This data is useful for comprehending the shift in the trends of consumer behavior. This type of analytics can be very helpful to understand the customer journey and position a brand accordingly in the prevailing market.
Let us now try to understand the importance of ecommerce analytics from a statistical viewpoint. A report by Statista notes that there would be an increase of about 200% in the number of people who carry out their business online. As such, the number of people who buy most of the goods via online modes would reach up to to 2 billion by the end of 2021. Subsequently, this number is slated to increase by 3 folds in the next five years. When we look at the size of the ecommerce industry, statistics point out that there would be a four-fold increase in it by 2025. The major drivers of success for the ecommerce industry in the next five years would be customer analytics, customer segmentation, and predictive analytics. Another report by Deloitte shows that more than 50% of online businesses have adopted analytics in one form or the other. This has not only helped them in making better decisions but has also empowered them through strategic initiatives. In one word, ecommerce analytics have improved the relationship and bridged the communication gap between the customers and the companies. Lastly, a report by Profitero notes that more than 50% of the brands have witnessed great improvements in the distribution channel after they have adopted ecommerce analytics in a full-fledged manner. All this points out that ecommerce is inevitable for the logistics industry in general and the digital marketing domain.
Key metrics of ecommerce analytics
There are five key metrics or stages of ecommerce analytics. The first metric is called data discovery. In this stage, companies need to collect a lot of information from their customers so that they can make informed decisions by processing this unstructured data. One common tool that we can use is Google Analytics which provides multiple facets of customer information like demography, age, gender, and even preferences for products. This information is critical in creating user personas for better customer outreach. In this, we collect data about the number of customers that buy some products from an online store. One important tool that we use at this stage is called the click-through rate or CTR. This is the ratio of users who are driven to our website through a specific link to the number of customers who view a specific post without clicking on it. The third stage is called the conversion stage. This is named so because it focuses on the conversion of the visitors into customers. This is done by targeting the customers through a specific promotional campaign and giving the required incentives after some purchases. One of the key tools that we used at this stage is called the sales conversion rate. We may also calculate the cart abandonment rate to get an idea of the customer who stores products in their cart without buying them. The fourth metric is called the retention stage. This gives us an idea of the number of customers that we can retain in the long run. An increase in customer retention rate denotes that the business is performing very well. One of the important tools used at this stage is called the customer lifetime value. This denotes the amount of money a customer spends on our business in the long run. The last metric or stage is called the advocacy stage. In this stage, we make our prime customers advocates of our marketing strategies. The prime customers try to motivate other customers, and this can have a snowball effect on the growth of our business. The most loyal customers are those who are promoters of our business.
In one word ecommerce analytics is not an overnight process but takes a long time to benefit our business in a real sense. With the help of insightful data, we can not only speed up online sales but can ensure sustained growth for the business in the long run.
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