eCommerce is a growing industry, with more and more people moving their businesses online. The term “eCommerce” refers to the practice where commercial transactions are conducted over the internet rather than in a physical store. Some of these “online storefronts” are the only way a business sells its products or services, while other businesses use eCommerce alongside physical stores.
Whether your main source of income involves eCommerce, or you use it as a way to make a bit more money on the side, knowing how to use data to enhance your business can both increase potential sales and help you to work more efficiently.
Why the eCommerce Industry Is So Successful
According to 99Firms’ eCommerce statistics, there are more than 3.4 billion eCommerce users around the world. While you’re unlikely to attract 3.4 billion users to your store, these numbers demonstrate how large the eCommerce industry has become in recent years. This number is set to increase as time goes on.
The increased popularity of eCommerce business enterprises has a lot to do with convenience, both for the business owner and for the customer. Someone can order a product from halfway across the world and have it delivered to their doorstep, without having to do more than push a few buttons.
Online businesses also enjoy a massively increased potential customer base, thanks to the continued increase in online shoppers worldwide. So, because customers are proving receptive to the eCommerce model, more and more businesses are moving online, making it so that customers are more likely to go online to shop. It’s a positive feedback loop that businesses can benefit from if they’re able to utilize their online presence well.
The online nature of these businesses means that owners have to be able to set up a website to sell their products. Rather than having to code everything themselves, many businesses are found on certain platforms, such as Shopify. These platforms allow eCommerce stores to start selling as quickly as possible, regardless of their technical knowledge.
However, to make sure that the business is successful, the owner will need to track the performance of the website, which involves collecting and analyzing data, or “metrics”. For example, if your site uses Shopify as a platform, you will need to use what’s known as Shopify metrics to determine how well it’s performing.
You need to know how well your website is performing because, simply put, it’s your storefront. If your physical store had issues that prevented sales, you would want to know what they were and how you can fix them. The same principle applies to an online store.
The Importance Of Metrics and How To Read Them
When it comes to words like “data” and “metrics”, your eyes may begin to glaze over. Most people didn’t start a business or hustle out of a desire to stare at charts and spreadsheets, but these things are an unfortunate fact of any business, large or small.
A metric is measurable data that can quantify an aspect of website performance. Basically, they’re how you can tell how well things are going and where changes need to be made. There are a whole host of different metrics that you can use, and it’s easy to get overwhelmed. However, you don’t have to be an expert to learn how to use this data.
Before figuring how to use data, it’s best to determine what you should be paying the most attention to. There are a few major data points that can explain how and why certain aspects of your eCommerce store might not be doing so well.
- Is your site being visited? This is a major question. You can’t sell a product or service if nobody is visiting your eCommerce store, much like how a physical store can’t make any money if nobody walks through the door. First, you need to know if people actually know your website and brand exists. Next, you need to determine how many of those people decide to visit your site.
- Do people want to buy from your website? Once you’ve managed to get a potential customer to visit your site, it’s important to know if they then move on to buy your product. Metrics can help you to determine whether people are attempting to make a purchase, but get frustrated before completing the checkout process. You can also use metrics to find out which products are more successful than others.
- Do people return to your website? Repeat customers are the bread and butter of any business, as it’s far easier to retain customers than to repeatedly attract new ones. Also, these metrics will help you to determine how much people appreciate whatever your selling. Lots of repeat customers typically mean that you’re doing something right.
- Finally, you want to find out how many of your new customers are referred to you by a current customer. This is another reason why pleasing customers is ideal, as they’re not only more likely to come back for more, but they can be a great source of fresh shoppers.
So, you know the kind of data that metrics can show you and how useful they can be in determining the potential success of your eCommerce venture. Each of the above bullet points might involve several different metrics and, as has been said, this can be daunting, especially to a small business owner.
The convenient thing about metrics is that, while they sound scary and number intensive, they can mostly be depicted visually. Instead of staring at raw data, most people find it far easier to look at a graph or chart that clearly shows trends in performance. So, rather than trawling through every scrap of data individually, many eCommerce site owners prefer to use software that can collate all of the most relevant metrics into one place and in an easily readable format so that they can compare and track trends with ease.