Here at SimplicityDX, we know the importance of Commerce analytics.
That’s why, in this guide, we’ll outline what customer analytics mean in retail commerce, the metics that matter most for your retail business, and, of course, the value a commerce experience analytics solution can provide when introduced correctly.
Let’s dive in.
What are customer analytics in retail?
Customer analytics are what power the most successful eCommerce and online retail businesses today.
In essence, customer analytics can be understood as the total workflow involved in gathering customer data and customer behavior, then using that data and behavior to identify, entice, and retain their most profitable customers long-term.
The observing, tracking, and real-time reporting of these analytics is something eCommerce businesses are particularly well placed to do, thanks to the wide array of online analytics tools, resources, and data points made available to business owners. Get your customer analytics right, and your business decisions will be smarter, more effective, and more profitable too.
That’s because customer analytics come in the form of key metrics and information that an online and/or clicks and mortar retail business can use to measure the following:
- Sales performance
- Marketing effectiveness
- Inventory management
- Operations processes
- Customer engagement and customer satisfaction
- Sales forecasting
- Commerce experience
- … And much, much more.
How can customer analytics be used in the retail industry — and specifically online?
As we touched on above, the customer insights gathered in customer data collection can be put to work to optimize many aspects of the online retail experience. Such as…
Improving your marketing and sales efforts
Retail analytics make it so you can dive deep into your customers’ needs, preferences, and pain points. This, in turn, works to help you and your team generate more accurate ideas on how to best market and sell your offerings.
Which ads have resonated the most in the past? What types of marketing channels do your customers typically buy from? Which pricing strategies work best for conversion? These are the types of data that can be put towards continuously refining both your sales and your marketing processes.
Optimizing your operations processes
Observing and reporting on customer analytics can also help you to improve commercial decision-making across your operations.
- Minimizing or increasing the amount of inventory that’s bought or stored, depending on seasonal purchase trends
- Better resource allocation, such as dedicating more time or staff members to certain product development or specific marketing initiatives
- Quickly identifying problems or pain points, like recurring payment method issues or shipping errors.
Bettering your customer experience
Last but certainly not least, customer analytics provide valuable insight into the factors that boost customer engagement and keep customers loyal to your brand. Customer data also reveal factors that may be losing you repeat business and areas of your customer experience offerings that could use improvement.
Leveraging these analytics means an improved customer journey experience that leaves customers more satisfied and more willing to shop from your eCommerce business long-term.
Which customer analytics are most important in eCommerce retail?
Now that you know what customer analytics can do for you, let’s outline which ones are the most important for you to be observing, reporting on, and actioning.
- User engagement analytics: How much of your content are your users actually engaging with? That’s what user engagement analytics determine. If these metrics point to the fact that your website visitors are not finding value in your content and, as such, quickly leave without making a purchase or reading further, it’s time to reevaluate the kinds of content you are publishing online.
- Customer retention analytics: Did you know that repeat customers make up, on average, 40% of a business's revenue? If your business’s repeat purchase rate is low, that’s your signal to start putting more time and effort into refining your customer retention strategy.
- Customer acquisition analytics: Determining the effectiveness of your existing customer acquisition efforts can help you to mitigate customer acquisitions costs (CAC) and hone in on which areas of your marketing or sales strategies need improvement. A tried-and-true tactic for this that many eCommerce businesses leverage is to create more educational content in order to inform potential customers about the benefits of their offering.
- Mobile adoption analytics: Analyzing your mobile adoption analytics can help you determine the number of customers that use your mobile app (or, alternatively, the mobile version of your site.) From there, you can also extract further consumer behavior data to helo create an omnichannel retail experience that runs smoothly no matter which personal mobile device your customers choose to shop on.
- Conversion rate analytics: As one of the most important metrics to measure, conversions tally the number of point-of-sale purchases that are made per day, per quarter, and per year. When putting this sales data against the financial goals that you have set for your eCommerce business, you can determine how effective your checkout process is, what needs to change about your site to better the customer experience, and even which products are selling the best at any given time.
- Behavior analytics: Behavior analytics track how your customers behave at each interaction point throughout their customer journey — providing valuable insight into which interaction points prompt the most customer engagement. What encourages customers the most when it comes to signing up for your email list? How can you improve your on-site merchandising, to A/B test designs that deliver the best results? Behavior analytics explore all of this.
- Commerce experience analytics: As customer engagements transfer online in greater and greater numbers tracking digital experience across commerce touchpoints is increasingly important. Different from behavioral analytics, it focuses on detecting and analyzing the customer frustrations that create barriers to conversion. Frustrations such as broken links, inventory, search and usability issues. When these struggles are detected quickly they can be resolved before they impact revenue, which of course is essential to customer satisfaction and conversion.
Are you looking to leverage the power of retail data and commerce experience analytics? SimplicityDX is here to help
In short, commerce experience analytics can work to answer the following questions for your business (and guide you towards fast, effective solutions):
- “Where and why do we tend to lose customers online?”
- What customer frustrations do we need to prioritize to support conversion?”
- “How are inventory issues impacting customer satisfaction and conversion?”
- “Are we providing a consistent customer experience across social commerce and our brand sites?”
- “Where are the gaps in our search results?”
- “Are coupon codes incentivizing sales?”
- “Which campaigns are driving the most traffic to individual product lines?”
- “How can we predict demand for individual variants more accurately?”
If you are ready to get these questions (and more!) answered, then it’s time to start leveraging the power of commerce experience analytics.
If you’re ready to begin observing, tracking, and reporting on these key metrics, know that SimplicityDX is here to help. As a Commerce Experience business that’s dedicated to helping retail eCommerce businesses across North America make the most of their analytics, we have the resources and know-how you need to get started. Contact us today.