Your ecommerce store produces data every single moment of the day. From every action a user takes to the time they spend doing it, everything leaves behind a trail of data. Through ecommerce analytics, you’ll be able to turn your data stream into actionable insights that help you improve your business.
Considering that 90% of data was created in the last two years, ecommerce analytics is only ever increasing in importance.
Instead of a set of truncated data points, conducting ecommerce analysis will allow you to transform your data into a storyteller that points your business in the right direction.
By looking at trends and changes over time, you’ll be able to match up data variations with actions you’ve taken on your website.
Doing this reveals the reason for changes in data, then leading to suggestions about which actions you can then take to achieve your desired results.
What Is Ecommerce Analytics?
Think of ecommerce analytics as a process of gathering data on your eCommerce business and then putting it to use (if you’d like to know more, we’ve talked about data analytics for eCommerce here, and about the benefits of data analytics for ecommerce here).
Anything that has an impact on your store, from the total amount of customers to the bounce rate of individual pages, will clue you in on the inner workings of your website.
Statistical analysis of this data and logical deduction is the process you then follow to transform data into actionable insights.
What Is an Actionable Insight in Ecommerce Analytics?
Let’s break this into two parts. The first, ‘actionable’, the second, ‘insight’.
Actionable – In this context, actionable means that you can act upon data you acquire to bring about change. An example of this would be looking at the difference between two A/B campaigns and going forward with the one which has better results.
Insight – This relates to the type of information you’re finding. An insight is the form of data you obtain which you will then use to make an actionable change.
Simply put, this term relates to the data that ecommerce analytics finds, and the actions you take after discovering the reasons why it appears in the form it does.
It is about to process of both having and using data in your business to make positive changes.
How Do I Use Ecommerce Analysis to Turn my Data Into an Actionable Insight?
While there are many ‘insights’ (or small facts/statistics) you find about your business, what makes them ‘actionable’ is the balance between three factors:
- Suggested Reason
Let’s take a closer look at these.
The foundation of a great insight is data! No matter what form your data takes, without it there is nothing to base your insights on.
The most common forms of customer data used in ecommerce analytics are:
- Identity – The basic information about a customer (name, age, gender, location, etc.)
- Quantitative – Data in a numerical form (total sales, AOV, click-through rate, LTV)
- Qualitative – Data in a linguistic form (answers to surveys, customer responses and feedback)
These three forms of data will form the basis of the majority of the ecommerce analytics that your business is going to use.
But, data alone is not enough. To form actionable insights with data, we’ll need to pair it with these two following factors.
“Data Storytelling” is the process of construing data in certain contexts to change its general appearance. Just take a look at the following graphs by StateofDigital.
While they appear completely different, they all actually use the same data points. The only difference is the way in which the graph presents the data.
Charts like these demonstrate the importance of context. Try to always place your data in a context that will best reveal the target of your analysis. Try comparing your data to a goal that your business has, as well as adding clarification to any percentages.
Take this statistic for example – Sales increased by 40% over June when compared against May sales.
While that sounds fantastic, that all changes when you reveal that May sales were $500K and June sales were $700K. Suddenly 40% doesn’t seem like quite so much.
Put your data in a context that accurately conveys what you’re trying to discover. Don’t frame it in the best light possible, present it in a way that will give you a grasp of the real weight of the information.
3. Suggested Reason
Now that you’ve got a form of base data and have put it in context, it’s time to add a suggested reason that your data is this way.
This is an example of Data + Context: Total subscriptions rose by 20% (from 1000 a month to 1200 a month) across the month of June.
This is an example of Data + Context + Suggested Reason: Total subscriptions rose by 20% (from 1000 a month to 1200 a month) across the month of June after adding PayPal as a payment option.
In this second example, not only do you have data in context, but you also suggest the change that took place to bring about this subscription increase.
When you find that sweet spot that balances data, context, and a suggested reason, you’re on your way to having actionable insights.
For example, an action that we could take with the above example is to then introduce even more payment methods into your ecommerce site. Over time, you’d then be able to see if that change similarly boosts subscriptions per month.
In this case, you’ve used ecommerce analytics to craft data into an actionable insight.
How Do I Act Upon Actionable Insights?
By proposing questions when viewing data, like ‘Why has this number changed’ and ‘What action caused this change in customer feedback’, you’ll be able to find the actions behind your data.
Once you discover those reasons, you’ll be able to construe data in a way that makes your news steps obvious.
There are three courses of action you can take when you come across actionable insights:
- Rethink your strategy – If an insight reveals that your marketing isn’t working well, then the action you can take is to rethink and prepare new campaigns. You can then similarly put those to the test.
- Adapt your process – Has your data revealed a problem in your business? Perhaps your sales funnel is leaking leads on a certain page? If that’s the case, use your actionable insights as inspiration to change what’s not working. Focusing on what’s working, and adapt what isn’t.
- Realize you’ve done the right thing – If your data reveals that you’re on the right track, the action you take may actually be the absence of an action. Knowing that something is going well is excellent feedback from ecommerce analytics and will help you stay on the right path.
Final Thoughts on Actionable Insights
By attaching a context and a suggested reason that resulted in your data, you can effectively produce actionable insights for your ecommerce business. Ecommerce analytics will allow you to plan out the next, data-backed steps you should take for your business.
Follow these steps all you’ll be able to harness the power of actionable insights and take the guessing out of your ecommerce business. If you want to take advantage of data-driven marketing and insights, then give Verfacto’s one month free trial a go today!