How to Use Analytics to Increase Ecommerce Conversion Rate

In ecommerce, the conversion rate is the holy grail that defines success. When you are spending money to run paid ads, you must earn a positive return on investment (ROI). If you aren’t doing that, pay-per-click (PPC) campaigns can quickly become a costly endeavor. Thankfully, modern marketers have all the tools they need to hit their goals. One of the most important tools is Google Analytics.

In this article, we’ll discuss the benefits and features of Google Analytics, showing you how to increase conversion rates in ecommerce business with the insights it provides.

What is Ecommerce Analytics?

Ecommerce analytics is a software tool that provides marketers with insights about their audience, such as their on-site behaviors, purchasing habits, and browsing history. You can use ecommerce analytics to determine important factors like:

• Where your users came from?
• How much time they spent looking at a particular product, category, or page?
• Where they spend most of their time?
• How far they scroll down a page?

 
If you’re going to succeed in the current digital landscape, your business must have a deep understanding of its audience. Only when you know what they want and need, will you be able to serve them better than any other competitor.

 

AARRR for Ecommerce

The AARRR method is one of the best ways to grow an ecommerce business. AARRR stands for:

• Acquisition
• Activation
• Revenue
• Retention
• Referral

 

Acquisition

How do you get visitors? Most companies drive traffic from social media or Google – organic and paid. Whatever your user acquisition strategy is, it’s essential to track the sources. Once you identify effective channels, you can invest more to nurture those relationships.

View in Google Analytics: Acquisition > All traffic > Source Medium

Activation

Once a user signs up for a product trial or subscription, the wheels are moving! They are moving down your sales funnel towards a purchase.

View in Google Analytics: Conversions – > Goals – > Overview

Revenue

You can calculate revenue after you complete some conversions and sales. In the Conversion section in Google Analytics, you’ll see data for overall conversions and assisted conversions, which provides attribution insights for a multi-channel marketing campaign.

Retention

When someone buys something from you, it’s no guarantee that they will come back for more. If you want to earn repeat business, you must focus on retention, which is all about nurturing a strong, lasting relationship with customers to earn their trust and establish brand loyalty. Doing this is money well spent, as it’s cheaper to sell to an existing customer than to acquire a new one.

View in Google Analytics: Audience Section > Cohort Analysis

Referral

You may already have loyal brand advocates but still, struggle to take your business to the next level. You can break through using referrals, as many of your customers will likely have friends and family who will be interested in what you have to offer.

View in Google Analytics: Acquisition > All traffic > Referral

What Metrics You Should Focus On For Your Ecommerce Store

If you want to dig deep into your ecommerce business and implement a strategy that will help your business and brand maintain sustainable growth, then you need to look beyond vanity metrics like social media likes. It’s time to discover the metrics that matter in Google Ads, so you can pinpoint the areas that deserve your attention.

 

New Visitor Conversion Rate

Keep tabs on the new visitor conversion rates to gauge how many people buy from your brand on the first visit. Typically, this won’t be very high, but that doesn’t make it irrelevant. Sort this information by medium to identify which marketing channels provide the highest-quality new traffic.

View in Google Analytics: Acquisition > All traffic > Channels

 

Cost Per Acquisition (CPA)

Before a user completes the customer journey, they may engage your brand on multiple channels. You’ll need to work hard at guiding them along your funnel, and the CPA metric can tell you how much you spend before the point of conversion.

If it’s possible, divide your data by new and returning customers to learn the cost of selling to your first-time customers versus loyal shoppers.

Exit Pages

Ecommerce conversion rates improve when you know why people don’t buy from you. What turns them off? What makes them leave your site? Analyze your exit pages to find the flaws in your funnel, then optimize them to improve results.

View in Google Analytics: Behavior > Site Content > Exit Pages

 

Completed Goals

You can define unique goals, and track micro-interactions along the way, assessing customer behavior throughout the customer journey. Create goals related to your size charts, shipping tools, page behavior, and other non-purchase conversion options.

View in Google Analytics: Conversions > Goals > Overview

 

Goal Conversion Rate

When you’re learning how to increase conversion rate ecommerce, you’ll see a big impact from analyzing micro-interactions and making minor improvements to your site content. The Goal Conversion Rate offers insights into the number of people who completed your desired goal, whether it’s a purchase, download, subscription, or simple interaction on the website.
View in Google Analytics: Conversions > Goals > Overview

On-Site Search

On-Site Search considers the terms that people type into your search bar to navigate your website. Ideally, your site should suggest corrections if a customer misspells something, making it easier for them to get the results they desire.
View in Google Analytics: Behavior > Site Search 

 

 

Product Analysis

 

So, with the metrics down, let’s take a look at the products in your store. You should think about which products contribute the most to your total revenue. If you have several high-selling products, it’s smart to invest more time and effort in promoting these products. Consider the following:

• Product sizes – If you’re selling clothes or shoes, for example, you will need to have products in a range of different sizes. Ask yourself what products people view, and which sizes are most popular? With a wider range of available sizes, you can maximize the sales potential of your products, particularly during high seasons.
• Cart-to-Detail Rate – This rate is the number of products added to a shopping cart compared to the number of product-detail views. You can analyze this rate to learn more about what attracts your customers.

 

Search Console Analytics

With Search Console Analytics, you can see how customers view your brand and get an understanding of what drives them to click on ads. This can answer important questions related to organic bounce rate and poor performance.

If you want to use Search Console reports, enable Search Console data sharing in your property settings. You must have administrator permissions on both the Google Analytics and Search Console accounts.

Pages Per Session

This metric is the number of pages your customers click on during their time on your website. If you break down this information by channel or to view new customers only, you can see how engaging your website is for new prospects compared to returning customers. Learn from this to optimize your user experience (UX).

View in Google Analytics: Acquisition > All traffic > Source/medium 

 

Search Analysis

People that use site search more often are more likely to convert. You can identify new leads that display an interest in specific products, and then tailor your content and navigation structure to offer people the solutions they want.

Average Session Duration

When paired with Pages per Session, this metric helps you evaluate your traffic quality, enabling you to see if visitors are staying for long. When you want to increase ecommerce conversion rates, it’s crucial that you can engage people for longer, so the Average Session Duration metric is useful for A/B testing any new changes.

View in Google Analytics: Acquisition > All traffic > Source/medium 

 

Assisted Conversions

Nowadays, many ecommerce brands rely on multiple marketing channels to convert customers. A shopper might bounce on their first visit, but then return through social media, and finally convert after clicking on a paid ad. By studying the customer’s path to purchase, and assessing the role of assisted conversions, you can see how many times customers interact with your brand before they buy.

View in Google Analytics: Conversions  > Multi-channel Funnels > Assisted conversions  

 

Promotions Analysis

 

With every promotion, there comes an opportunity for new business. In many cases, promoting one category can have a positive impact on related categories, so it’s important to monitor revenue across the board when you run a promotion.

While some customers may not buy other products if there is no discounted offer, some other customers will see the additional product as good value because they have already saved money on the discounted category.

 

Time Lag

How long do customers take between their first visit and conversion? Improving the time lag rate effectively reduces the customer journey, which may lead to repeat business as people appreciate the smooth user experience.

View in Google Analytics: Conversions  > Multi-channel Funnels > Time Lag   

 

Customer Lifetime Value

The lifetime value metric tells you the long-term value of customers acquired through different channels. For example, if a new customer returns five times per year, then their value is five times their initial purchase.

View in Google Analytics: Audience > Lifetime Value 

 

Category Analysis

Most ecommerce stores organize their products in multiple categories. You should try to keep on top of this categorization system, no matter how fast your company grows. Ask yourself the following:

• Which category generates the most revenue?
• Which categories are the most popular?
• Which categories are the least popular?
• Do people show interest in one or multiple categories?
• Do people buy from one or multiple categories?
• Which category will be popular for the upcoming season (e.g., Black Friday, Christmas, etc.)?

 

Speed Suggestions

In Google Analytics, you can view the pages with the highest traffic, and identify those that need work to improve their loading speed. Slow sites are a nightmare for ecommerce conversion rates, so you should always keep an eye on your site speed.

View in Google Analytics: Behavior > Site speed > Speed Suggestions

 

Funnel Analysis

In ecommerce, the typical sales funnel is as follows:

1. A user is interested in buying a specific product
2. The user searches for products in the market to learn about trends and potential solutions.
3. The user lands on your website and explores the available products related to their needs.
4. They add one or more products to the basket. They may leave and return later.
5. Finally, on either the same visit or the next, the visitors go through the checkout process, completing the conversion to purchase the products.

Throughout this funnel, marketers can analyze the behaviors to learn more about the individual customer and the broader audience. This approach works best when you employ segmentation. Here are some methods to try:

• Analyze session-based sequential segments. (Audience > custom > user-defined – use different segment here)
• Analyze user-based sequential segments. (Audience > custom > user-defined – use different segment here)
• Analyze the navigational summary report. (Behavior > site content > all pages)
• Analyze the behavior flow analysis report. (Behavior > Behavior Flow)
• Analyze the users’ flow report. (Audience > user flow)
• Analyze the product performance report. (Conversions > ecommerce > product Performance)
• Analyze the time-to-purchase report. (Conversion > ecommerce > Time to purchase)

 

Purchase Analysis

A macro goal (or macro conversion) is the primary target on a website, such as convincing visitors to buy your subscription product. Micro goals are the secondary aims, such as capturing customer contact information or convincing them to download a brochure.

Segmentation works well because it facilitates granular analysis so that you can distinguish between macro and micro-actions and goals on your website. When you want to increase ecommerce conversion rate, try segmenting by:

• Sessions with transactions
• Sessions without transactions

 

When you analyze transactions, look for patterns in the number of transactions that happen during a set period. For instance, compare transactions from week to week, or by month, or quarter. Perhaps, certain days of the week generate a higher number of transactions than others. In this case, you should start working on increasing your transactions on the slow days, perhaps with more promotional emails or ads.

Post-Purchase Analysis

You should analyze what customers do after they make a purchase, as it can reveal some valuable opportunities. On your confirmation page, try asking questions like:

• What convinced you to buy this product?
• Did you have any doubts? What were they?
• Would you like to share your purchase on Facebook (show sharing buttons)?
• What predicted actions would you like to see on our site?

 
Gathering feedback in this way can help you optimize the UX, which will encourage repeat business, and help attract new leads.

Wrap Up

Everyone wants to know how to increase the conversion rate in ecommerce, but relatively few business owners take the time and effort to learn. If you want to build a brand that can scale and grow over time, you should focus on collecting valuable consumer data.

The more data you gather, the more success you will have with segmentation and detailed analysis. Google Analytics has all the tools and tricks you need to harness the power of the data-driven age, so you can know more about your audience, your website, and the user experience you offer. With these insights, you can continuously improve your online store to provide an online shopping experience people will remember.