4 Reasons Ecommerce Websites Need to Be Using Google Analytics

I know it’s been said over and over again, you need to be using Google Analytics for ecommerce websites, but why? Many business owners question whether its worth investing time in and what they can really get out of it. The answer is loads of useful information! Yes, there is a little bit a learning curve, but once you figure it out you’ll be thinking, “Why wasn’t I using this before?”

1. It can help you identify your customers’ barriers to purchase

According to the Bayard Institute, about 69% of users abandon their online shopping cart. That means that 69% of online shoppers add items to their cart and they leave the website somewhere during or before the checkout process. There are many reasons as to why this happens, but you can’t know what is causing abandonments on your website unless you call up your customers and ask why or have analytics set up on your website to capture the process.

Using Google Analytics Ecommerce Report you can see exactly how many people put a product in their cart and then didn’t purchase it. For example, you can see below that of the 515 times people added a product to their cart, only 254 actually purchased it. The product checkout section tells you how many times the particular item was part of the checkout process (meaning it wasn’t the only item in the cart). Again you can see that the number of items in the checkout process was higher than the number of products actually purchased.

Photo courtesy of Google Analytics’ Demo Account

Using this information you can get an idea of how many sales you are missing. With the Shopping Analysis Reports and the Behavior Flow Report you can get a good idea of where you are losing customers and you can then formulate a plan to fix it.

2. Remarketing isn’t possible without analytics

Remarketing offers you a way to reach people that have previously visited your website and either abandoned their shopping cart or just didn’t convert. You have probably seen remarketing in action. If you visit Amazon and add something to your cart but don’t purchase it, you will start to see ads for that item all over the web. This is Amazon’s way of reengaging you to hopefully get you to purchase that product. Now, imagine if that was your company! Using information from Google Analytics, Google Adwords can effectively reengage your customers through remarketing campaigns. Without analytics, you can’t know how much business you may be losing which means you won’t be able to effectively recapture some of it.

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3. You can see the customer’s path to purchase

Another great feature of Google Analytics is the ability to see the customer’s path to purchase. Knowing the path to purchase allows you to really be able to focus your marketing efforts to the correct channels. At the end of the day, more focused marketing usually gives you a higher Return On Investment (ROI) and saves you money.

You can see your top conversion paths in the Top Conversion Path section of the Conversions Report (Conversions > Multi-Channel Funnels > Top Conversion Path). This powerful report shows you all of the interactions a customer had with your website before they converted.

Photo courtesy of Google Analytics’ Demo Account

Using the top 10 ten conversion paths, you can start to understand what marketing efforts are most effective for your ecommerce site and ensure your money is spent in the right channels. Plus, before you know it you’ll be a lean, mean, marketing machine!

4. You can use analytics to help you calculate your marketing ROI

As with any business expense, you want to ensure that your marketing expenses are driving lots of revenue or at least giving you an acceptable return on investment. With programs like Google Analytics, calculating your ROI couldn’t be any easier.

Let’s say you are running some ads on Google’s Display Network to drive traffic to your online store. You set your total monthly budget for October 1 – November 1 to $650.00 and your target ROI is 40%. With analytics you can easily check and see how you did.

Just pull up the Model Comparison Report (Conversions > Attribution > Model Comparison).

Photo courtesy of Google Analytics’ Demo Account

From your Model Comparison Report you can see that your Display Ads contributed to 102 conversions totaling $970.84.

So your ROI is (revenue gained – ad spend)/(ad spend) or ($970.84 – $650.00)/$650.00 = 0.4936 so about 49%

In this case you beat your ROI goal by about 9%! If you have other expenses related to running your ads or producing your product will want to include that in your ad spend cost as well.

These are just a few reasons why Google Analytics is a powerful tool for your online store. With the wealth of information available to you, there is really no good reason why you should not have Google Analytics set up on your ecommerce website!