Businesses can enhance their offerings and foster customer loyalty by analyzing customer behavior, optimizing product strategies, and personalizing the customer experience. Additionally, leveraging e-commerce analytics enables businesses to identify market opportunities, allocate resources effectively, and monitor performance metrics for continuous improvement, ultimately leading to sustained success in the competitive digital landscape.
What can E-commerce data and analytics tell you about your business?
Every company has access to huge quantities of data on customers in general and their interactions with your site. You can use this data to get better analytic insights into consumer trends, such as what customers are buying the most of, and how much they’re willing to spend on a product. All of this information helps to position your business competitively within the market it’s operating in. Utilizing this data can tell you how particular customer demographics will likely respond to sales and offers.
Customer analytics can also help you gauge what your top products are, how often customers complete purchases, and whether you’re experiencing shopping cart abandonment. If you have high levels of cart abandonment, it’s likely that there’s too much friction in the customer experience, meaning that you’ll need to look at streamlining this journey further for them. Shopify explained on customer journey, 69.57% of shopping carts are abandoned, which means that 70 out of 100 customers won’t purchase the item in their cart.
Overall, then, E-commerce analytics have the potential to boost your conversion rate – you will be able to test different tactics based on data analysis, and then again use this information to make even more successful decisions on what sells best to your customers. It also helps you to keep track of your most loyal customers, giving you the chance to reach out to them with loyalty offers – or if they are high-profile influencers, even ask to collaborate with them in order to promote your product to new audiences.
Those are some of the main uses of E-commerce analytics. But what tools on the market help you to gather this data in the first place? This is what we’ll look at next.
E-commerce analytics tools: how they work
Analytics can help you to target relevant demographics when you’re looking to market products better or learn which customers respond best to deals. But you can also use analytics to gain further insight into user behavior – including suspicious or criminal activity. We’ll now look at how you can use different analytics tools in order to both tailor marketing to your customers, and also prevent cybercrime (often with the exact same tools).
Behavioral analytics for uncovering customer patterns
Marketers use behavioral analytics to uncover granular preferences of demographics that shop with you. You can study them in order to find out how they behave throughout the entire customer journey – whether certain customers are likely to abandon their cart, and whether there’s any friction during the journey which is causing customer churn.
There are many free tools online that help you to gather data on your customers, presenting the information in clear reports. One of the most popular examples of this is Google Analytics. Some of the limitations of Google Analytics, however, is that not all users are tracked with it – it is easy for customers to opt out of Google Analytics. Since Google tracks customers via cookies, customers can also choose to block these too. This means that the data you receive on your customer base is somewhat limited.
Behavioral analysis can also tell you whether a customer is behaving suspiciously, by tracking mouse movement, how fast they click through your website, their IP address, and their purchasing patterns. If a customer’s behavior doesn’t match that of your typical customers, such as via mouse movement, typing cadence, or other clues, then fraud software using behavioral analysis will likely flag them as suspicious.
This leads us to device fingerprinting, for both marketing and cybercrime prevention.
Device fingerprinting for cybercrime – and marketing
It’s also possible to track down criminals on your site hiding behind a Tor browser or VPN with the help of device fingerprinting tools available on the market. Device fingerprinting works by assigning each user a hash based on the unique combination of their web browser configuration alongside their device model.
Web browser configuration explained by Attention Insight, marketers can look at customer device configuration data in order to discover whether “you’re using an expensive MacBook Pro or an affordable smartphone. They can ascertain your earnings with your IP as this information correlates to your location.” However, one potential issue with this kind of customer tracking is that many see this as an invasion of their privacy — it’s best to be transparent with them if you plan on using any tracking tools for analytics purposes.
Currently, device fingerprinting can be used for individual ad targeting. While it’s no longer possible in the EU and the UK to use web cookies in order to track individuals online and tailor ads to them individually, it’s still possible to do so with device fingerprinting – with their consent.
That’s because if you’re a company based in Germany – or a company working with German customers – it’s important to make sure that you follow the correct procedures for electronic marketing, according to EU GDPR regulations and German law. How you plan to use device fingerprinting also needs to carefully follow GDPR regulations. This means it’s probably a good idea to take legal advice on whether it’s possible to use certain digital marketing strategies when targeting German audiences.
Using fraud prevention tools to help you make better security decisions
Alongside market research, cybercrime defenses should also be a top priority for your e-Commerce business. SEON’s guide on fraud rates is climbing, with 5 in 100 transactions being fraudulent. They also claimed that “times of economic downturn tend to produce rising fraud rates, as people increasingly seek alternative streams of income, even illicit ones.” Therefore, monitoring fraud can help you make more informed decision-making – such as including multi-factor authentication or any other verification checks for your customers.
The future of E-commerce analytics
The way that companies are allowed to use customer data for analytics purposes is constantly changing. Therefore, it’s important to keep up-to-date with how you’re able to both use and store customer data.
As Germany follows the EU GDPR data protection regulations, this means that there are plenty of restrictions on how companies are allowed to use customer data. It’s important for any companies based in the EU or those marketing to EU customers to comply with these regulations. This includes making sure that customer data is stored securely, as well as giving customers the opportunity to request that their data be deleted off company servers. It also means that EU customers have more control over how companies get to use their data. Customers also have to grant permission for you to send them promotional material – this can be done through web forms or “opt-in” emails.
According to a recent study, “Exploring the Impact of GDPR on Big Data Analytics Operations in the E-Commerce Industry”, “any changes in e-commerce analytics systems [because of GDPR] will depend on the company’s setup” and that “customer participants revealed they do not feel the least concerned when their data is used to improve the accuracy of machine algorithms in making personalized recommendations.” Therefore, how much a company is affected by these regulations will depend on the way that they originally store personal/sensitive data, as well as how happy customers are with the way that they use their data to provide product recommendations.
Reuters reported that this year, several US states such as Colorado, Connecticut, Utah, and Virginia will be introducing GDPR-inspired laws which will give customers greater control over whether their data can be harvested by e-Commerce sites or not. This puts customer data back into the hands of the customer, meaning that it could become harder for US-based E-commerce sites to gather customer data as they did before.
E-commerce analytics is a complex landscape in 2023, but still useful
E-Commerce analytics help you make better-informed decisions about advertising and marketing – all leading to potential increased conversion rates and business growth. All of this is down to the different types of customer data you’re able to gather via the range of different strategies and tools on the market. However, it’s worth making sure that the way that you use and store customer data is GDPR compliant, as well as following any additional data protection rules in your customer’s country. As e-Commerce becomes increasingly global, it’s clear that transparency, efficiency, compliance, and cybersecurity should be at the forefront of your business strategy.
Discover the latest e-commerce trends and boost your business – join our community: