When it comes to building a sustainable, profitable e-commerce website, only one thing matters – sales. See a spike in sales of your brand new products and you’ll be happy all day long. Watch your total sales slump after your holiday promotion, and you can kiss the holiday spirit goodbye.
When the latter happens, most small business owners react by spending more money on advertising, changing the price point, altering the site layouts and so on. These impetuous, aimless actions aren’t strategies – they’re what happen when you’re flying blind. And what happens when you fly blind? You’re bound to come crashing down.
Almost 65% of businesses fail in the first 18 months and 90% in the first few years – often because of the lack of long-term marketing strategies to navigate the challenges of online business. When you understand analytics, you’ll be able to optimize for more sales and predict when and why sales may dwindle. It’s the single best skill you can acquire and, quite possibly, the one with the most ROI attached.
What is Analytics?
Analytics is the process of measuring site statistics to drive continual improvement of your customers’ online experience. All that translates to achieving your desired outcomes. In short, analytics provides relevant information you can use to improve your business.
As an e-commerce business, your number-one desired outcome is increasing the sales of your product. If your site has gained a significant number of visitors, it’s time to start using analytics software to collect their data and analyse it.
The most popular tool is Google Analytics. It’s free and relatively simple to install on your e-commerce site. You can access it here.
How Analytics Can Make You More Money
1. It helps you understand what’s affecting your sales performance
Sometimes your product just doesn’t have product-market fit. But you wouldn’t have developed it in the first place if you didn’t know there was an audience ready and willing to buy (right?). So the answer to poor sales might not be market sentiment or external factors, but rather a breakdown in user experience.
Analytics help you get a better picture of how customers use your website and where they run into problems. For example, analytics can reveal cart abandonment numbers, and even at which stage of the purchase customers drop out.
You can use this insight to optimise your checkout page to reduce shopping cart abandonment and improve your sales, which likely won’t take much effort or expense, but have a huge impact.
2. It’s how you optimize conversion across your e-commerce site
Once you have carefully studied the actions of your visitors or web users, you will be able to act accordingly in order to optimise your website. You’ll also have an idea about which things need altered and which aspects of your website appeal more to your target market.
You’ll know which products are the most viewed and which ones are all but ignored. You can adjust certain aspects of your website that need improvement, like updating the headline on the homepage, editing product descriptions to match the message with product and brand, re-positioning your call-to-action button on the checkout page, and resizing product images to make them larger and clearer.
You can then fix any technical problems; or you can focus on how to improve, streamline or reshape site navigation to better assist your site users or visitors.
3. It’s the foundation of your sales and marketing strategies
Web analytics show you where your best return on investment (ROI) comes from in terms of ad spend and marketing strategies. With hard numbers as your foundation, you can be confident that you’re giving customers the experience and products they want.
For example, by tracking the items that get the most views, you can tell which products are appealing most to your visitors. Add segmentation and you can see where each group of visitors come from, what each group tends to look at, and what characteristics add up to someone highly likely to buy. That wealth of information is what you need to effectively target your pay-per-click advertising, social media advertising and many more.
Once we’ve identified what Google Analytics can do for us, let’s discuss e-commerce analytics and some KPIs you should be following in order to understand you buyers.
Setting Up Google Analytics For Your E-commerce Site
To begin setting up Google Analytics, click here and sign in with your Google account.
The above screenshot is already set up for tracking specific web site. New users will be offered a detailed guide to set up a new account in Google analytics. Follow the steps required for the setup. Make sure to add the Google Analytics tracking code to your store so Google will start tracking traffic.
Your code will contain a Universal Analytics tracking code, unique to your website (aka. “property” – you may have several properties on every account). After everything is set up correctly, you’ll start seeing data in your Reporting tab. This is where the magic happens, so let’s get familiar with it.
Besides information on the Audience (your website’s visitors), Google Analytics uses Acquisition, Behavior and Conversions, which describe the customer journey as visitors move through your e-commerce store and make purchases. You’ll find these sections on the left-hand side-bar in the Reporting tab.
Set up your goal
Let’s get real here for a minute: The main goal of any e-commerce store is to sell. That’s our goal for analytics too – getting the information you need to make more sales. Every time a visitor makes a purchase, it counts as a completed goal and shows up in your analytics reports.
But, in order for Google Analytics to start tracking your conversions, you have to define and set up a goal, which can’t be as vague as “sell more!” Don’t worry, it’s easy.
To start, click on the Admin tab in the main menu at the top of the page. On the right hand side you should see the ‘Goals’ sub menu. Click on ‘Goals’.
Click on the red ‘+ New Goal’ button. Select a template and then select ‘Place an order’ on the drop-down menu. Now click the blue ‘Next step’ button.
Next up, name your goal. For example ‘Purchase’ for your macro conversion goal or ‘Blog post read’ for micro conversions, and leave it checked as ‘Destination’ under type. Now click the blue ‘Next step’ button to continue.
The final step is to define the URL of the Thank You page. This setting is extremely important because it will show you exactly whether visitors are completing the purchase or not on your e-commerce site.
Most e-commerce platforms’ Thank You pages have ’/checkout/thank_you’ as seen below. Leave the monetary value turned off. Turn the funnel optional switch to ‘On’. Now list the pages (with their respective URLs) that your visitor goes through during your checkout process.
Final Step: Verify Goal!
Once you’ve completed all the relevant steps, click ‘Verify this Goal’ and make sure the percentage is more than 0% (unless your store is brand new and had no sales yet) so you know you got the destination URL correct. Now you’ll start seeing conversion data for your reports.
Get Insights Quickly With Google Analytics Dashboards for E-commerce
There’s a vast amount of data available in Google Analytics you can explore. For e-commerce sites, the data generated by Google Analytics are huge and can be daunting, especially accessing the key metrics at a glance.
The solution – Google Analytics Dashboards for E-commerce. This is a great way to get an instant overview of what’s happening in your e-commerce site.
These dashboards show you report summaries comprising a maximum of 12 widgets (boxes), at a maximum of 10 rows per widget. Each Google Analytics account has an allowance of 20 dashboards.
To get an idea for what’s possible, here are some custom dashboards you can explore from e-commerce experts.
The above report uses the 12-widget dashboard limit and includes some of the most important e-commerce transaction metrics. The top left bar chart labeled “Ecommerce Conversion Rate by Medium and Device Category” shows conversion rate by device type, broken down by desktop, mobile and tablet. There’s also a “Transaction by Medium” pie chart that shows the top six sales referral channels.
If you look closer, you’ll see corresponding tables for those graphs, as well as standard e-commerce metrics like transactions, conversion rate and revenue. They also use a “Transaction and Ecommerce Conversion Rate by City” report, which is one way you can segment your data.
Google Analytics offers incredibly useful features for your e-commerce site. Have you used analytics for your e-commerce site? Let us know your experience in the comment below.
For those of you who did not establish the analytics account yet or added analytics to your web site, here is a quick checklist what you need to do.
- If you do not have Google Account, create one now
- Go to the Google Analytics page or type ‘google analytics’ in your search engine
- Open the link, most likely the first in the results
- Follow the instructions on the screen
- Once you complete the process, you will get the tracking ID. Tracking ID is a randomly assigned ID number, unique to your account.
- Once you do this, the code will automatically send the information about your web traffic to Google Analytics.
- Congratulations, you have just set up the Google Analytics to track your website! Seeing results may take a few days.