Ecommerce Analytics: A Guide to Measuring Your Online Business Success

Guides & Advice
December 16, 2020
Guides & Advice
Ecommerce Analytics: Measuring Your Ecommerce Success

Imagine you are selling books online: you wholeheartedly welcome every new subscriber, offer Black Friday discounts, and even host online reading events in the hope of higher customer engagement. Still, your sales have hardly increased in the past 6 months, and customers don’t rush into buying some of the gems of your book selections.

What might be the problem? The chances are you’re missing out on ecommerce analytics tools.

In their Advantage Survey, Deloitte Analytics discovered that:

  • 49% of company CEOs in North America, the United Kingdom, and Asia claimed that data analytics help them make better strategic decisions,
  • 27% believe that analytics is most important for increasing sales to new and existing customers,
  • and 55% reported that analytics has “significantly” or “fairly” improved the organization’s competitive position.

By investing in ecommerce performance analytics, you might recognize loads of potential red flags for your business, missed clients, and decreasing sales.

So what is ecommerce web analytics, why do you need to track it, and which metrics bring the most benefits to your business – read in this article.

What Is Ecommerce Analytics?

Kaleigh Moore at Supermetrics defines ecommerce analytics as:

the process of gathering data from all areas that have an impact on your online store and using this information to understand the trends and the shift in consumers’ behavior to make data-driven decisions that will drive more online sales.

Ecommerce analytics include metrics related to the full customer journey from familiarizing the buyer with your product to converting them into an advocate of your brand. Metrics allow you to collect data – both big and small – and analyze it in relation to the common shopping trends, your sales and product performance, and user behavior on your website and/or app.

Why Should You Track Ecommerce Analytics?

From setting measurable goals to monitoring your sales performance, data drives every promotional and marketing decision in a successful online store. Here are a few reasons why ecommerce analytics will help you leverage your online business potential:

Identify Shopping Trends

Ecommerce tracking tools scan the customers’ data and identify trends based on the most-searched and rising product lines. You’ll get access to the shopping trends both on a global scale across various vendors in your product category and within an individual account based on your customer’s previous purchases.

With a simple sneak peek into the customers’ behavior and into the product performance in your business category, you will understand what the shoppers are looking for and push relevant offers towards the customers.

Get to Know Your Customer

Ecommerce businesses are often claimed to lack a personal touch with customers, but analytics tracking tools can easily address this issue.

Analytics reports provide some useful insights about where your shoppers come from, which items on your website are their favorites, how much they spend on average. This data will allow you to pamper your customers’ wants and personalize your offers.

Epsilon reports that 90% of customers are likely to shop three times more frequently if a brand offers a personalized experience. Such perspectives on customer conversion seem too promising to miss out on that Google Analytics Audience report.

Check the Effectiveness of Your Marketing Campaigns

Analyze whether your marketing campaigns are worth investing in and what revenue you get from your paid ads. With some best ecommerce tools, you’ll see which keywords in your ads convert into sales and how many new customers they bring into your e-store.

You may choose to pause a Facebook campaign if customer acquisition costs become too high, or invest more into your Google ads that drive more sales than usual. Whatever change your marketing campaign brings, you’ll see it displayed in your analytics report.

Manage Your Inventory

Tracking the location where your product is sold most and the time of the year when it is most popular will help you avoid unexpected stock-outs in your inventory.

A high cart abandonment rate in a certain location may also cause you to optimize logistics and prevent possible delays in product delivery. In the times when 98.1% of the US shoppers say that delivery impacts their brand loyalty, you might really want to see into those analytics reports to replenish your inventory at your buyers’ most popular location.

Must-Have Metrics For Every Ecommerce Owner

Ecommerce analytics is all about data and numbers. But how do you obtain them?

There are quite a few tracking metrics that, depending on your needs and objectives as an e-retailer, will give you valuable information on your brand success. Some of the most common classifications are:

  • based on the stages of customer lifecycle (discovery, acquisition, conversion, retention, advocacy),
  • AARRR metrics (acquisition, activation, revenue, retention, referral),
  • or based on focus areas (financial, marketing, sales, user happiness). 

In this article, we will discuss the latter category and explain the metrics falling under each focus area.

Financial Metrics 

Financial metrics focus on the revenues your business earns from various channels and customers. Here is the list of some most important financial metrics.

Monthly Recurring Revenue (MRR)

MRR measures the total amount of predictable monthly revenue, thus, giving insights about your brand’s revenue growth or decline. It is calculated by summing up all recurring income for the month, including gains and losses but excluding one-time charges and/or taxes:

MRR = Σ Recurring Revenue

Or, if your ecommerce business is based on subscriptions, you should multiply the number of active accounts by the monthly billing amount:

MRR = Number of Customers × Average Billed Amount

MRR serves to track business performance, measure comparative progress (month-over-month) of a brand, and – most importantly – plan budget. If your MRR is lower than expected, your e-store may have lost a few customers and you risk running into financial trouble. A rising MRR means you might afford to spend more on your marketing campaigns or product development.

Lifetime Value (LTV)

LTV measures the projected revenue that a customer will generate throughout the lifespan. The metric takes into account repeated transactions, average order value, and client abandonment rate. The easiest way to calculate LTV is by following the formula:

Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period

LTV is extremely useful to assess your ecommerce business health. A growing LTV means that the company satisfies its customers; a declining LTV indicates a brand loses money out on each customer and needs to work more on customer retention.

Customer Acquisition Cost (CAC)

CAC shows how much your company is spending to acquire a customer considering the cost of sales and marketing efforts. To calculate CAC, you should divide the total cost of sales and marketing by the number of customers acquired:

Customer Acquisition Cost formula

Try to keep your CAC as low as possible and compare it to your LTV values. Usually, the LTV:CAC ratio should be 3:1 (meaning a customer’s lifetime value should be three times higher than their acquisition cost). In case of rising CAC, you might want to optimize your sales and marketing efforts and invest less in customer acquisition strategies.

The change in LTV:CAC ratio from 2016 to 2022
The change in LTV:CAC ratio over years. Source: Corporate Finance Institute.

Marketing Metrics 

Marketing metrics measure the success of all your marketing activities, including social media campaigns, email marketing, and paid ads leading to your website. Here’s the list of metrics you should find useful:

New vs Returning Users

This metric shows the number of users accessing the webpage during a certain period of time. It is calculated based on the user IPs and cookies accepted on a device, so even a returning client accessing your e-store from a different device will be counted as “new”.

Example of new vs returning customer metrics
Example of new vs returning customer metrics. Source: Shopify.

A steady flow of new visitors helps you grow your customer base, whilst a high number of returning visitors is a sign of healthy retention rates.

Average Session Duration

As the name suggests, Average Session Duration indicates how much time a visitor spends on your website entirely. The values differ depending on the purpose of your website and on the marketing campaigns you’re running: multimedia content and improved UX design will hold your client longer in your e-store.

Average session duration by industry
Average session duration by industry. Source: Brafton.

Pages per Visit

This metric shows the number of pages a user has visited in a single session on your website. A high page-per-view rate shows a user’s interest in your website content and positive customer engagement. A 2019 survey of Littledata found that the average pages per session were 3.0, so you may consider yourself lucky if your online store scores are higher than this metric.

Bounce Rate

Bounce rate indicates the percentage of people who land on the homepage and leave without continuing to browse the website. An increasing bounce rate has the contrary effect to that of the rising pages-per-visit rate: it means that the users have no good reason to stay on your website, so you may be losing your clients. So if you’re working in retail, you wouldn’t want to see it rising over 40%.

Bounce rate standards for different types of websites
Acceptable bounce rates for different types of websites. Source: CrazyEgg.


Sales metrics measure everything related to online sales and payments, from the number of products sold to the average amount of money spent by a customer. Some of the sales metrics include but are not limited to the following list.

Average order value (AOV)

AOV helps you understand your customer’s spending habits, identify shopping trends, and create personalized offers in your e-store. Just divide your revenues gained in a certain period of time by the number of orders placed during the same time period.

Average order value formula

One way to boost your AOV is to introduce loyalty programs as well as improving prices, the quality of your products, and their design.

Cart Abandonment Rate 

Cart abandonment rate shows the percentage of users who have added items to their cart but left without completing a purchase. The value is calculated by dividing the total number of orders by the total number of visitors who have added something to their online cart. To obtain the percentage, subtract the obtained value from one and multiply by 100:

Cart abandonment rate formula

If your cart abandonment rate exceeds 50-60%, you might want to simplify the ordering process, add some more payment methods, or improve on-site messaging to help the customers proceed to the checkout.

Reasons for high Cart Abandonment Rate
Reasons for high Cart Abandonment Rate. Source: Monster Insights.

User Happiness

User happiness metrics measure customers’ satisfaction with your brand. It is worth mentioning one important metric in this category: Net Promoter Score.

Net Promoter Score (NPS)

NPS is relevant when a customer becomes your brand advocate. This metric shows how likely the customers are to spread the word about your e-commerce business and is obtained by surveying your clients. In-app messaging, customer feedback forms, and an after-purchase friendly pop-up saying “Rate Us!” are all the ways to calculate your NPS. The higher your customers’ rate, the more loyal they are to your brand.

Example of an NPS survey campaign
Example of an NPS survey campaign. Source: Upland Localytics.
Learn more about ecommerce metrics and ways to calculate them in another article of our blog:
Guides & Advice
eCommerce KPI: Top 10 eCommerce Metrics to Boost Your Business Growth

Best Analytics Tools for Your Ecommerce Business

Once you have decided on the metrics that are most important to your business, it’s time to choose the analytics tool that will put all the figures together. There’s a variety of online analytics tools – both paid and free – that will satisfy your ecommerce needs. Here’s a list of the most popular analytics tools to try for your ecommerce website.

Google Analytics

User-friendly. Detailed. Free. That’s all you need to know about this world’s most-loved tracking tool.

Here’s what you can get with Google Analytics ecommerce tracking:

  • Study your client database: access your customers’ demographical data (gender – age – interests – geographical location – devices used) as well as get the cart abandonment rate and bounce rate right in front of you.
  • Check your customer behavior: see which channel drives the most traffic to your online store, how long the visitors spend on your website, and how many (and which) pages catch their attention.
  • Track and evaluate your campaign performance: use traffic metrics (visits – bounce rate – page views) and conversions metrics (number of transactions – the average value of each transaction – total revenue from each source) to measure your ROI for both paid and organic campaigns.
  • Analyze your competitors: take advantage of the benchmarking tool in the Audience report to see how local businesses in your industry perform.
Ecommerce Overview report in Google Analytics

You may need to put some effort to set up a Google Analytics account (see how to add google analytics ecommerce tracking code here), but it is so worth it at the end of the day.


“Your business is based on real people. Your analytics tool should be too.” The essence of Kissmetrics lies in this single quote. Developers at Kissmetrics take pride in customer behavior tracking and an accurate LTV metric. Here are a few things you can do once you decide to subscribe to Kissmetrics services:

  • Obtain detailed customer activity reports. Kissmetrics reports include the most searched products in your e-store, the percentage of inquiries ending in a purchase, and popular discount offers among your customers. This data is more accurate than that provided by Google Analytics because Kissmetrics connects every single pageview to a user, not just a browser or cookies.
  • Accompany your customers throughout their journey. Kissmetrics allows you to segment your users (aka populations) based on their online behavior and target those specific populations with an email, reminding them about their activity on your site or inviting them to complete the purchase.
  • Track shopping trends down to the core. Kissmetrics Activity report not only notices the spikes in customers’ activity but also drills down the actual reason for the trend. Seeing which business segments contribute to the trend may help you stay ahead of your competitors and offer the customers what they’re looking for at that specific moment.
  • Control your revenues. With Kissmetrics analytics tool, you’ll get access to the lifetime value of your customers by segment and to the total amount of income by each marketing channel.
Kissmetrics sample report.
Kissmetrics sample report. Source: Kissmetrics.

Access to various Kissmetrics reports largely depends on your subscription plan. The prices get quite expensive as the cheapest option starts at $299 monthly. You don’t have to rush into the unknown, though: with a free demo, you’ll get a chance to see Kissmetrics features in action and then make an informed decision.

Crazy Egg

What makes the marketers love Crazy Egg is its world-class visual analytics. It’s been around since 2006 and earned the trust of the international community with its quick set-up and easy-to-use interface to:

  • Visualize your data: the Heatmap report is the signature of Crazy Egg allowing a business owner to see where people tap on the website, what time of the day, from which browser and search engine they come from – and much more!
  • Capture user activity: watch the user’s mouse movements with the User Recording feature and see if your most important links on the website are noticed.
  • Compare your reports: the Snapshots tool generates comprehensive reports for your A/B testing so that you know where to place your call to action and how to reduce your bounce rate.
Crazy Egg heat report
Crazy Egg heat report. Source: Crazy Egg.

Crazy Egg pricing plan starts at $29 after a 30-day no risk-free trial, so there’s plenty of time for you to see if their UX website audit meets your expectations. 


Founded in 2014, Hotjar is viewed by many as a younger sibling of Crazy Egg: both analytics tools boast of their heatmap reports and session recordings. Despite its shared functionality features, Hotjar still allows e-retailers to:

  • Visualize your users’ behavior. With heatmaps and screen recordings, you’ll analyze your customers’ onsite behavior, find their exit points, and pinpoint areas that need improvement.
  • Get customer feedback. The function of instant visual feedback collects your visitors’ reviews and is a way to measure the NPS of your brand. Customer sentiment is monitored across all pages on your website and is reflected throughout time.
  • Create on-page surveys. Customizable widgets and pop-up messages with specific questions about user experience will give you a better understanding of what your customers like/dislike and how you can improve your e-store.
HotJar analytics report.

Hotjar offers flexible pricing both for price-sensitive and high-end clients. Basic subscription for personal use comes for free (limited reports collecting data from a max of 2,000 pageviews / day) or at $39 (10,000 pageviews / day) per month. Subscription rates for corporate use start at $99 per month.

Magento Ecommerce Tracking Extension

This option works perfectly for those who have their online store built on Magento. Magento eCommerce offers a lot of extensions – both free and paid – to optimize your business, but its ecommerce tracking extension exceeds all expectations. You can now integrate a Google Analytics Enhanced Ecommerce tool to obtain personalized data and reports from your online store. Coming at a range of prices (from $39 to $100+), Magento 2 Google Tag Manager extension allows tracking button clicks, form filling, cart abandonment rate, and product promotion, among others.

Why should you pay extra for Magento extension if Google Tag Manager is free? Here’s what you can do once you sign up for a Magento 2 ecommerce tracking:

  • Customize your ecommerce tracking features: add or delete some specific tools, like Product Impressions or checkout events, to manage large volumes of data easier. 
  • Obtain metrics at each stage of your customer’s journey: with Shopping Behavior Reports, see your visitors’ activity in a single session – checkout, purchase transactions, pages per session – and improve your product placement strategy on the web, if needed.
  • Track the success of your social media advertising: use data from Facebook pixel tracking to refine your Facebook advertising strategies.
Example of Magento 2 tracking customer report.
Example of Magento 2 tracking customer report. Source: Mageworx.

To install the Magento ecommerce tracking extension, you need to go through a three-stage process and configure your Magento 2 store according to the user guide. If it seems like a lot of hustle and bustle for you, trust this work to a certified Magento Solutions partner, like Elogic, and they will take care of ecommerce tracking extension for you.

The Final Takeaway

When your online store is growing and you’re ready to invest in marketing, ecommerce analytics is the first thing you should consider. For some, tracking tools show nothing more than a bunch of figures, graphs, and charts. But for a successful ecommerce entrepreneur, metrics are a powerful source of information opening a world of opportunities for higher conversion rates, more customer satisfaction, and competitive advantage.

Get in touch with us if you’re looking for an ecommerce development partner to integrate analytics tools for your business.

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