7 Ways Analytics Can Improve Your Ecommerce Business
Ecommerce is a rapidly growing industry. In fact, eMarketer predicts that the retail ecommerce market will be worth more than $4 trillion by 2020. With this growth comes heightened competition, which means ecommerce businesses must leverage all possible sources of competitive advantage. One key tool for gaining an edge over rivals is analytics.
Analytics allows ecommerce businesses to track customer behavior, including where traffic is coming from, what products customers are browsing, how long they spend on each page, what items they add or remove from their carts, and how successful businesses are at closing sales. With this information, businesses can better understand their customers and tailor their strategies accordingly.
Here are seven areas where analytics can help to significantly improve an ecommerce business:
1. Tailor a customer experience unique to your market
Providing a superior customer experience is essential to ecommerce success. However, simply following “best practices” may not be enough. Every ecommerce business operates in a unique context, so it’s crucial to monitor how customers behave in your specific market, especially if you operate in a particular vertical or niche. By using analytics, you can determine what content your customers are looking for, which can help you optimize features like comprehensive product descriptions, user reviews, and Q&A. Additionally, analytics can help you identify any areas that need improvement so that you can minimize customer effort throughout their journey and increase your conversion rates.
2. Curb cart abandonment
Cart abandonment is a major concern for ecommerce businesses, with an average abandonment rate of 70 percent across all industries. Fortunately, analytics can help identify precisely when users are leaving your site, allowing you to pinpoint areas that need improvement. By improving these “weak spots” and intervening when necessary, you can win back potential customers and improve your conversion rates.
3. Improve marketing efforts
Engagement campaigns and loyalty programs are effective ways to keep customers coming back to your site. By utilizing analytics, businesses can personalize these campaigns based on customer behavior, creating a more tailored experience. Additionally, automation tools can be integrated with analytics data to better manage marketing activities and campaigns. For example, web push notifications or emails can be sent to customers if they leave items in their cart, encouraging them to return and complete their purchase.
4. Manage stocks and pricing better
While sales figures alone can give businesses an idea of which products are performing well, they don’t provide the whole picture. Analytics can help businesses delve deeper into their sales data and determine which products are more popularly browsed, or added into carts without actually being bought. By applying these insights, businesses can tweak their pricing, optimize their product listings, and even focus on the items that generate the most profits.
5. Minimize returns
Returns can be a major cost for ecommerce businesses, particularly those selling clothing online. Blame it on the potential for sizing errors or the difficulty of evaluating clothing quality online, but US fashion retailers report a return rate of between 20 to 40 percent. Analytics can help solve this problem by integrating data into personalization platforms that suggest fit and size recommendations for customers, helping to minimize returns and costs.
6. Enable personalized recommendations
Personalization is a powerful driver of customer engagement. Amazon, one of the largest players in ecommerce, attributes a significant portion of its sales — 35 percent according to McKinsey — to its personalized recommendations feature. Analytics helps businesses identify individual behaviors and patterns, allowing them to create highly personalized recommendations for each customer.
7. Prepare for cross-border ecommerce
Many ecommerce businesses are venturing into the global market, but localization remains a key challenge. Culture has a great impact on buyer attitudes and preferences, which is why analytics can help. By comparing user behaviors for each specific market, businesses can customize strategies and campaigns accordingly.
By adopting analytics early on, ecommerce businesses can collect longer historical information about their customers and their business trends. This data can then be used to help develop more effective engagement programs and personalization features. Additionally, analytics provides objective information that businesses can rely on, rather than relying purely on intuition.
In conclusion, analytics can be a game-changer for ecommerce businesses. By monitoring customer behavior, using the right tools, and understanding market trends, businesses can effectively optimize their strategies and achieve higher conversions. Remember to always focus on a customer-centric approach, and never forget the importance of utilizing data to deliver a better experience.
