Ultimate Guide to Ecommerce Analytics

The success of your online business relies on ecommerce analytics.  The use of ecommerce performance measurement began in the early 2000s when online sales began gaining traction. Over time, as analytics continued to evolve, business owners started to value its…

The success of your online business relies on ecommerce analytics. 

The use of ecommerce performance measurement began in the early 2000s when online sales began gaining traction. Over time, as analytics continued to evolve, business owners started to value its potential and looked to get a wider understanding of how it works and how they could implement it in their business.

Ecommerce analytics has not stopped growing since. It has been getting increasingly popular among online business owners who seek to establish strong brands and profitable businesses.

If you have not had the chance to learn more about how ecommerce analytics software and tools can help you improve your website, you’re at the right place!

In this guide, you can read about the concept of ecommerce analytics, its importance, why and how you should use it, and its major challenges.

What Is Ecommerce Analytics?

Ecommerce analytics is the process of collecting, analyzing, and interpreting data related to purchases in online platforms. Analyzing this data gives you new and useful insights into your customers and sales.

In turn, this allows business owners to boost their sales as they get more knowledge on how their customers behave and which channels are bringing in more purchases. That is why ecommerce performance measurement can help you drive business growth.

Ecommerce performance measurement relies on metrics to interpret data and identify and solve problems. Because the amount of data analytics collects is so large, the process can be overwhelming and complex. 

To make this easier, ecommerce analytics is split into several types, according to the typology of data. 

And how do you choose which types on which to focus? Is that not too much information as well? 

This choice will depend on your industry, business, and, more importantly, your business needs and goals. However, 4 types of ecommerce analytics can be considered essential for all businesses, as they provide critical information on business performance and customer behavior – two key areas that contribute to the success and growth of any business.

Customer Analytics

Customer Analytics provides information about retaining customers and their journey and behavior.

The metrics and key performance indicators (KPIs) included in this type of analysis are:

1 – Customer Lifetime Value (CLV) – the estimated value a customer will bring to a business over a period of time.

2 – Customer Churn Rate – the percentage of customers who stop doing business with a company.

3 – Engagement – how customers interact with the website, focusing on page views, clicks, and time spent on the site.

4 – Demographics – information about the age, gender, income, and location of customers.

5 – Purchase History – the products customers have purchased and when they purchased them.

6- Customer Feedback – customers’ opinions about the company and its products and services.

Acquisition Analytics

Acquisition Analytics provides information related to the acquisition of new customers.

The metrics and KPIs focus on acquiring new customers and include:

1- Traffic source – the channels through which new visitors find your website.

2 – Conversion rate – the percentage of visitors who become customers.

3- Bounce rate – the percentage of visitors who leave the website without taking action.

4 – Customer Acquisition Cost (CAC) – the cost of acquiring a new customer, including marketing and sales expenses.

5 – Return on Ad Spend (ROAS) – the return on investment generated by advertising spend.

Sales Analytics

Sales Analytics is a type of ecommerce analytics provides information about the buyer’s patterns and business performance.

Some relevant metrics and KPIs to consider are:

1- Revenue – the total amount of money your business makes through sales.

2 – Average Order Value (AOV) – the average amount of money spent in each transaction.

3 – Gross Margin – the difference between the cost of the products and the money earned from sales.

4 – Cart Abandonment Rate – the percentage of shoppers who do not complete their purchase.

5 – Repeat Purchase Rate – the percentage of buyers who make more than a single purchase.

6 – Sales by Product/Category – the revenue generated by specific products or product categories.

Website Analytics

Website analytics focuses on the behavior of visitors on a website.

Some of the best ecommerce KPIs and metrics in Website Analytics are:

1 – Marketing channels – analysis of the channels used to reach customers, such as social media and email.

2 – Return on Investment (ROI) – the return on investment generated by marketing expenditure.

3 – Lead Conversion Rate – the rate at which leads generated through marketing efforts become customers.

4 – Campaign Conversion Rate – the rate at which customers take action after encountering a campaign.

Why Is It Important?

As online purchases grow exponentially, businesses need optimized systems and strategies to keep their competitive edge.

Ecommerce analytics has the power to make businesses successful using only one thing: data. Information on customers, sales, and website performance allow you to make data-driven, strategic decisions and thus improve your online presence.

Using ecommerce analytics can help you gain more customers, have a more cost-effective business model, and significantly increase your profits. 

Why Use Ecommerce Analytics

You have probably understood by now that ecommerce measurement performance is an essential part of creating a successful online business: it brings more customers, more profit, and better business. But how? In what areas can analytics be decisive for your business success? Let us get into it. 

Gain Valuable Insights Into Customer Behavior

The data analytics tools collect data to show your customer’s actions on your website. You can access every click, every shopping cart, every purchase and almost-purchase, and every minute spent on your website. 

As you follow the customer’s journey, you gain actionable insights that allow you to improve your business from the customer experience perspective. 

Analyzing customer patterns also helps keep track of trends and shape the offer according to what the average customers are looking for.

As you start making data-driven decisions, you improve your business by not only increasing sales but also – and especially – by acquiring loyal customers.

Enhanced Customer Insights

Ecommerce analytics is a viewing lens for understanding your customers. By going through gathered data about, for example, the demographics and location of your customers, you can determine their preferences and pain points. 

And as you figure out your customers’ likes and dislikes, you can make better, data-driven decisions about your products, marketing strategies, and problem-solving approaches. This helps you create a strong, customer-oriented brand, and a profitable business.

Improve Your Marketing Strategies

Did you know that, more often than not, business owners fail to take advantage of marketing data? They have high amounts of information about their clients, but due to the complexity of the data, they fail to use it to build solid marketing strategies. This results in many lost business opportunities.

Ecommerce analytics can tackle this issue. Using analytics, you can segment your customers and create targeted marketing campaigns, thus bringing in more customers and increasing marketing ROI.

Moreover, ecommerce analytics helps identify which campaigns are working and which are not, allowing you to optimize them using valuable insights.

Increase Your Conversion Rate

Analytics can also play a role in customer conversion by improving two key areas: funnel and product performance analysis.

As customer analytics allows you to track and analyze the buyer’s journey from the very beginning to the last click, you can pinpoint the barriers that stop visitors from becoming customers. Here, the concept of funnels is crucial. As you segment your audience into funnels and analyze each stage, you are more effective at identifying bottlenecks. Once you locate the trouble in the conversion funnel, you can explore ways to improve and grow. 

Keeping an eye on the performance of products is also a great way to improve conversion. By knowing which products are most popular among your customers, you can optimize your marketing strategies as well as your business offerings, thus increasing your conversion rate.

Increased Profitability

Information is power – and money as well. Your profits can only increase when you take advantage of the marketing data you get from your website and use it effectively. 

For one, with buyer’s behavior data, you can figure out the pain points in key areas, such as customer conversion and feedback, and begin working out solutions to fix the issues and improve your business.

Analytics also allows you to pinpoint the best-performing products and prices. That not only helps you find more customers and retain the ones you already got but also contributes to the reduction of resource expenditure. 

In addition, you can optimize your marketing campaigns. With the help of ecommerce analytics, you get access to high amounts of useful information related to customer acquisition and marketing analytics. As a result, you can concentrate your spending on the best-performing channels and cost-effective marketing strategies that drive business growth and maximize ROI.

Implementing Ecommerce Analytics

If you want to make your business grow with ecommerce analytics, you have come to the right place. Below, you will find helpful information about implementing this data analysis process.

Setting Goals and Objectives

How can you use ecommerce analytics to improve your business? Increase sales? Better engagement? Be more cost-effective?

It is crucial to set clear goals and definitions to determine an actionable and focused business strategy. But be sure to identify your business needs and your target audience as well, as they are important factors to take into account when establishing goals and objectives for a business.

Metrics and key performance indicators (KPIs) are vital to helping you reach your goals, so decide on which are the most relevant to your business and be sure to monitor them closely. They will give you the data you need to measure your progress and develop an adequate strategy to drive website growth.

Always balance your ecommerce analytics objectives with your business view to ensure the outcome is always positive.

Utilizing Dashboards

Dashboards provide a visual representation of the data obtained through metrics and KPIs. They present the data in real time and in a clear format, which makes it easier to monitor them and detect any changes.

Additionally, the way dashboards present data helps you identify patterns and trends more quickly. 

Dashboards are also customizable, which means that you highlight the metrics and KPIs that are more relevant to you, according to the business goals and objectives you set.

Leveraging Automation

As we have mentioned, ecommerce performance measurement works with large amounts of data, and it is challenging to manage so much information manually. 

Hence automation joins the conversation.

Automated systems can help streamline the process of collecting and analyzing information with increased accuracy and consistency in less time. That reduces the factor of human error and, at the same time, frees time for you to focus on other important business tasks. 

And since automated systems are scalable, you do not have to worry about the increasing amounts of data. 

Challenges of E-Commerce Analytics

Ecommerce performance measurement can make your business grow, but implementing and maintaining it comes with a few major challenges. 

Finding the Right Tools

There is an array of analytics tools available, and choosing the ones that best fit your business can be tricky. However, it is crucial to pick tools carefully, as working with inadequate tools can stop you from taking the most advantage of the data you collect. 

When investing in analytics tools, consider the volume and type of data you will be working with and your goals and objectives. Your budget is also a factor to consider, despite there being popular tools free of charge, such as the ecommerce analytics software Google Analytics. 

Before making a decision, especially with paid tools, it is a good idea to try out several different tools so you can make an informed decision.

Data Collection & Analysis

Analytics tools are indispensable in analyzing the data generated by an ecommerce business. However, the high volume of data and its complexity make it more difficult to extract valuable insights. That also makes it tricky to find the right analytics tools. 

Your choice must factor in the need to manage data of different types and levels of quality and maximize the marketing potential of information. 

Integration Issues

Ecommerce analytics commonly collects data in different formats as it comes from different sources. That makes the analysis process more complex due to the difficulties in combining the data.

You must use data integration tools that can ensure data compatibility, standardization, and reconciliation to get the most out of the insights you gather.

Managing Data Privacy & Security

Analytics collects a wide variety of data, including information about individuals, so privacy and security are a priority. Nonetheless, it is surely challenging to guarantee data security in the online realm.

Analytics tools can also pose a risk when it comes to keeping data private and secure.


Ecommerce analytics is quite a dense area, but it is as dense as it is important. Any online business looking to thrive needs to be in perfect sync with the process of data collection and analysis. It is the most stable and assuring strategy to acquire and maintain clients. Similarly, it provides useful insight into your business performance.

But while a lot of comprehensive data about your audience, sales, and website can benefit your business, it can also make ecommerce analytics challenging.