Running an online business as a retailer is a monumental responsibility. Every single facet of your store, including your page design, branding, and content marketing, must be tailor-made to your specific vision and your target market.
The most important task, however, is to make sure your business stays on the path to growth. This requires you to make data-driven decisions on a consistent basis. You should have no room for guesswork and let data show your next move.
Without further ado, below are some of the most important pieces of data in eCommerce and what you should do with them:
1. Low Conversion Rate
Generating traffic to your online store is only one side of the coin. You also need to design an experience that will convert them from visitor to paying customer.
According to statistics, the median conversion rate of eCommerce businesses fluctuates at around only 2.95% globally. This is by no means acceptable, especially considering how difficult it is to generate traffic to your site.
Image: Smart Insights
Unfortunately, conversion rates depend on a variety of different factors, and it can be tricky to pinpoint which ones affect you. You may need to build social proof, improve the performance of your site, or perform a complete redesign of your landing pages.
A good place to start is to observe the known conversion rate optimisation or CRO practices, which are summarised in this post. But when it comes to the on-page factors, the only surefire method to identify what affects conversions is to use A/B testing. It is the process of testing two or more versions of the same page to determine which configuration works best.
Here are some of the tools you can use for A/B testing:
2. Unjustified Customer Acquisition Cost
In eCommerce, acquiring a customer costs money ” be it through CRO, content marketing, or paid advertising.
Sure, investing in inbound marketing strategies like SEO might pay off eventually. But when it comes to outbound strategies, you need to avoid going overboard and operating at a loss. And that’s where the customer acquisition cost metric comes into play.
Put simply, the customer acquisition cost or CAC measures the number of sales and marketing expenses needed to acquire one customer. This can be calculated by dividing the total expenses by the total number of customers acquired in a specific period.
Of course, the CAC is subjective to each business. For example, a company that sells luxury cars might be comfortable with a CAC of $20, but that same figure could demolish an eCommerce business that only sells home cleaning and laundry products.
A high customer per acquisition cost could indicate a mismatch between your content marketing and your ideal audience. This can be avoided by integrating customer personas into your content development process ” making sure your content resonates with your audience’s needs and interests.
Cyfe is one of the tools you can use to monitor key performance indicators, including the cart abandonment rates. It works through pre-built widgets that seamlessly integrate the platform with other services, such as accounting software and eCommerce platforms.
When launching costly marketing campaigns or PPC ads, you can use Cyfe to set SMS alerts ” allowing you to make the necessary adjustments and stay within your budget.
3. High Cart Abandonment Rate
Not all customers who reach the checkout process will close a purchase. In fact, the average documented shopping cart abandonment rate is 69.23% globally, which means less than a third of customers who fill their online shopping carts actually push through the transaction.
According to statistics, some of the top reasons for cart abandonment during checkout include mandatory account creation, insufficient security signals, and the lack of transparency. The presence of extra costs is right at the very top, with 61% of consumers reporting it as the cause of abandonment.
Eliminating these issues and ensuring a smooth checkout experience is a step in the right direction. Lost sales from shopping cart abandonment can also be recovered through remarketing strategies, such as sending a follow-up email or presenting retargeted ads.
Remember that there are plenty of avoidable reasons why customers might abandon their shopping carts. This includes lost internet connectivity, unexpected website errors, or the presence of physical distractions around the customer.
In these cases, all you need to do is to give customers one final nudge to get them to convert.
Currently, eCommerce platforms like BigCommerce also have integrated remarketing features that can help you squeeze more sales from shopping cart abandoners. These work by automatically sending emails that encourage customers to complete their checkout ” usually accompanied by a direct link to their virtual cart.
In BigCommerce’s case, this is called the Abandoned Cart Saver , which can be modified to include a custom message and follow a specific follow-up schedule.
4. Refund and Return Rates
In eCommerce, refunds are never good news. The refund and return rates measure how many sold products ” which should be on the positive side of your balance sheet ” make their way back into your inventory. Worse, it could negatively impact your brand’s image in that customer’s perception.
Most refunds and returns occur for three reasons: poor customer service, bad product quality, and misaligned customer expectations. Improving customer service is more than doable, especially if you learn how to utilise big data to augment their experience. Unrealistic customer expectations, on the other hand, can be prevented by uploading high-definition photos of the product as well as segmenting them into different categories.
However, a bad product quality may signal a much deeper problem, which may require drastic measures such as cutting the product off your digital catalogue. Just be sure to protect yourself from serial returners by providing clear returns and refunds policies on your website.
Making data-driven decisions for your eCommerce business is easier than ever, thanks to tools and services that improve acquisition and monitoring. This may not transform your online store into a cash cow overnight, but eCommerce success doesn’t necessarily need to be a race. Take one step at a time as you let data guide your next move.
