What’s New in Web Analytics

U.S. etailers have long known that analyzing visitor behavior, benchmarking it over time, and keeping track of trends is key to continuous improvement in sales and profits. But what are they doing now that’s different from before? Plenty.

New metrics
Traditionally etailers have kept an eye on two metrics:
1. Conversion rates, meaning orders divided by site visits (the U.S. average being 2.9%, according to Forrester Research)
2. Abandonment, which measures the number of shoppers who put items into their carts but don’t complete checkout

These days, online merchants are realizing they need to get more granular in their metrics. For one thing, merchants must look at the interim steps that take a customer to conversion and abandonment. Here are the top metrics tracked by the MarketLive Performance Index:

• “One-and-out” visitors, meaning the number of visitors who view one page and leave the site. The goal is to get this number as low as possible, by offering a good mix of merchandise and offers. According to Ken Burke of MarketLive, sites with 8 different merchandising elements on the home page achieve the lowest rate, and generate more than triple the conversion rate.
• Cart open rate, which divides visitors by number of carts opened, and provides a crucial link between web traffic and cart conversion rates. The next thing to check is finding out what motivates visitors to open a cart—it’s all about content and merchandising.
• Search-to-cart rate shows what search terms are most connected with cart behavior, and helps guide merchandising.
• Product page visits to carts. Which pages are powerful enough to drive conversions? If a given page is low, then improved copy or graphics are recommended.
• Checkout abandonment. MarketLive data shows that half of visitors abandon their carts during checkout. High abandonment rates suggest it’s time to look at the ease of the checkout process, reducing the number of clicks and finding ways to make it faster and simpler.

New tools
Thankfully, software vendors are constantly developing useful new tools to help etailers analyze customer behavior at their sites. Among the latest are:

• No-cost analytics. Everyone appreciates something for free. Google has changed the analytics landscape by introducing Google Analytics, freeware that offers considerable analytic power, including optimization tools to improve the design and copy on product pages, landing pages, and everywhere else. Google Analytics contains only limited capabilities—for example, you can’t incorporate offline sales or internal data tools, and it limits the number of goals you can set for any given profile. But because it’s free, Google Analytics is becoming the entry-level tool of choice, stimulating smaller etailers to try their hands at analytics for the first time. And when they need more functionality, these merchants are upgrading to the more sophisticated software offered by Coremetrics, Omniture, WebTrends and others.
• Integration with other marketing tools. Etailers want a full view of the customer, irrespective of sales channel. Many of the new website analytics programs, such as Unica’s, let marketers export information from the ecommerce platform to campaign management and CRM systems.
• Higher level marketing analysis. Traditionally, etailers were content to tease out ecommerce insights from mountains of click-stream data. But these days, they are using site data to segment customers and prospects by value, and differentiate their treatment—more like standard database marketing. This level of analysis is possible thanks to rising levels of site registration, combined with cookies, and an increased willingness of customers to share personal data with merchants they trust.
• Dashboards, which allow easy viewing of key metrics in a single, easy-to-read reporting tool. Ecommerce software packages like NetSuite include an AJAX-powered dashboard that provides regular (e.g., daily, weekly) data on key performance indicators like orders, sales, new customers, orders fulfilled, open customer inquiries, as well as financial overview information like income, expenses, profit, cash flow, and bank balance.

Chart: Analytic activity of U.S. online merchants
Results of a recent survey by The Etailing Group, showing the percentage of online merchants who rated the importance of various uses of analytic tools.

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