E-commerce Analytics in Magento 2

Have you ever thought you want to be more in control of planning your business’ growth? Have you figured out which reports you want to optimize for higher sales? Most definitely “Yes”, right?

You must have also listed out which key areas of performance you want to track.

This article will help you understand which metrics can be measured through analytics and what information can be derived from it.

Why should you set up e-commerce analytics?

Imagine you have a retail store. The key factors to analyze sales pattern would have been — the number of customers visiting your store, sales figures and may be marking the days when there were high sales conversion.

But in an e-commerce business, there is so much more you can track and optimize.

Setting up analytics will help you find insight into your best-selling products and help you find areas of improvement. We have already discussed how to setup Google Analytics with Magento 2 before.

Google Analytics collects two types of data — transactional and item wise.

Transactional data is all the things that are involved in making a successful transaction. Transaction ID, sale figure, taxes, shipping rate, etc., all come under transactional data.

Item data are details about the product or service purchased. Product ID, SKU, product price and category, etc., all come under item data.

So how does this data help you? Google Analytics creates reports using this data to determine conversion rate, average order value, revenue generated and much more.

Understanding Sales Funnel in E-commerce

To set up analytics for e-commerce you must first understand what happens when a product is sold from your store. Sales stages of two e-commerce store may differ from one another depending on the type of business.

We’ll list out the stages in a sales funnel for an e-commerce store which sells apparels. You can add or remove steps to customize to your store.

Sales Stages of an online apparel store:

  1. Customer comes to the website
  2. Customer browses product pages
  3. Customer adds product to cart
  4. Checkout and confirmation

Google Analytics allows you to set advanced e-commerce settings. You can put the stages mentioned above as Destination Goals in your Google Analytics account. This helps Google to start tracking customer behavior. They collect data on the path taken to achieve sales, and where customer dropped off from your store.

Customers visit your online store through multiple sources or mediums. You must be aware of how you’re attracting the targeted audience to the website and optimizing for more traffic.

When they are on your website, customers will search and explore for the product of their choice. You should use analytics to see how much of the total traffic is passing from this stage to adding a product to cart. If you feel that not enough of the potential customers are going to the next stage, you know where to focus!

You have to repeat the same thought process for each such transition.

Using Analytics Reports

Reports can be accessed from the Conversions -> Ecommerce tab in the left sidebar on the Analytics page. When you’ve setup the e-commerce analytics, Magento shares information about your products, sales and conversions with Google for analysis.

Below are various types of metrics for which performance is measured -

  1. E-commerce Conversion Rate — It is the percentage of total website sessions which resulted in e-commerce transactions.
  2. E-commerce Transactions — It is the total number of purchase orders generated.
  3. Total Revenue — It is the sum addition of total product revenue, tax, and shipping charges.
  4. Average Order Value — It is the average value of an e-commerce transaction. It is calculated by taking a ratio of total revenue and total transactions.
  5. Unique Purchases — It is the total number of times a product was part of a transaction.
  6. Quantity — It is the number of times a product was sold.
  7. Average Quantity — It is the average number of times a product was sold in one transaction.
  8. Average Price — It is the average price of a set of products or a single product.
  9. Product Revenue — It is the total revenue generated by a product.
  10. Per Session Value — It is the average value of a session on your online store.

Other than these, Google Analytics still has more insights to offer like Time to Purchase. Time to purchase is the number of days and sessions it took for a customer to finally make a purchase.

You should strive to reduce time to purchase so that the sales process is agile.

Conclusion

Analysing data is important to understand the buying behavior and psychology of your customer. You must strive to make your business customer-centric, and your customers will reward you for it, as we have seen with Amazon.com. Analytics is what will help you grease your sales machine.

We hope the information we have provided helps you to plan out areas of improvement for further growth!

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