E Commerce Analytics Demandware


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primer on ecommerce analytics

E Commerce Analytics Demandware

  1. 1. Retail Practice Best Practices Guide eCommerce Analytics Putting Web Analytics to Work for Your eCommerce Business ©2010 Demandware, Inc. | www.demandware.com
  2. 2. Executive Overview As ecommerce becomes an increas- organization) that want to establish a ingly important part of a retailer’s more mature analytics practice within overall business strategy, it is critical to their organization. have a plan in place to measure, track and monitor your shopping website The ideas and best practices outlined performance. This will enable you to are not difficult or expensive to imple- understand your customers better, do ment and offer significant benefits. more to personalize their shopping They are ideally suited for the Online experience, identify opportunities for Marketing Manager, who may be improvement and make sure you are constrained by time and budget to al- doing everything you can to enhance locate adequate resources to establish conversion rates and improve online a robust analytics practice. They also revenues. give you a head start by guiding you through the business and functional Web analytics, specifically ecommerce aspects of ecommerce analytics. Deep analytics, help achieve this goal by technical knowledge is not required, transforming business data into action- although a high-level understanding of able insights. This paper is targeted at the various technology components growing ecommerce businesses (either involved in an ecommerce site will be independent or part of a larger retail useful. ©2010 Demandware, Inc. | www.demandware.com 2
  3. 3. eCommerce Analytics – A Quick Technical Primer To lay the foundation for some of the technical primer. A “Cookie” is defined best practices detailed here, let’s take as: “A message given to a web brows- a quick look at some of the basic er by a web server. The browser stores technologies that enable ecommerce the message in a text file. The message analytics. is then sent back to the server each time the browser requests a page Javascript tagging is perhaps the most from the server.” (Web Analytics Useful Tools popular data collection mechanism Association) used in web analytics. It’s as simple as Google Insights pasting a small snippet of Javascript Typically, there are two types of (www.google.com/ code in all your website pages. It then cookies set by any web server: insights/search/#) works as follows: Transient Cookies exist only as 1. The customer enters the URL of long as the visitor is interacting Google Insights (or its your website. with the website. They get deleted relatively simpler peer automatically when the session ends, – Google Trends) can 2. As the web page loads, the i.e. – the user closes the browser or provide insights into how browser executes the Javascript code, navigates to a different website. These favorably Google views capturing the page view and other are usually used to track events hap- your competitor’s site details about the visitor’s session, and pening within a single session and to versus yours. You can also sending it to a data collection server map them together. see how your keywords (usually maintained by your analytics are trending versus your vendor). Persistent Cookies continue to live competition. While Trends even after the session has ended. is a simpler tool, Insights 3. As the visitor navigates from These are used to track repeat visitor allows you to save your page to page, the Javascript snippet behavior across sessions. These usu- captures data specific to the page and ally have a pre-determined expiration findings in a .csv format the overall session and sends it back date, ranging anywhere from 30 days and export into a spread- to the data collection server. to six months. sheet for further slicing and dicing of data. 4. The data collection server There are some common concerns associates all data received from the with cookies and Javascript-tagging customer during the browser session that are important to be aware of as with a unique ID (called Session ID). you consider ecommerce analytics. 5. The session gets terminated when • First-Party vs. Third-Party the visitor either closes the page, Cookies – Most popular vendors navigates to a different site, or there is support first-party cookies, but if your no browser activity for a certain period vendor uses third-party cookies, your of time (usually 30 minutes). analytics code may get blocked by security settings and anti-spyware It is important to understand the software running on your customers’ concept of cookies to complete this computers. ©2010 Demandware, Inc. | www.demandware.com 3
  4. 4. • Disabled for Javascript – It is safe • Data ownership – Since your data to assume that anywhere between may be sitting on a server maintained 2-4% of your visitors have turned off by your analytics vendor, it is possible Javascript in their browser. Depending that you may not get access to all on your vendor, you may still be able to the data in its raw form to run your tell how many such visitors arrived at own analysis. It may be possible to your site in a given time frame. Gener- get some data exported, but only at ally though, these visitors remain invis- aggregate levels. ible to you. • Too much Javascript – On the other end of the spectrum, if your site is too heavy on Javascript (think modal windows, overlays and non-flash visual effects), the analytics snippet may conflict with other libraries on your pages and throw Javascript errors on the page, causing a poor browsing experience. ©2010 Demandware, Inc. | www.demandware.com 4
  5. 5. Deciding What to Track In the beginning, it may be difficult you start by making a list of what you to decide what to tag with Javascript want to understand about the visitors and what not to. You may be tempted and their experience with your web- to adopt a “tag everything you can site. The screenshots below represent see” approach and leave for later the some of the basic events and/or visitor process of deciding what you want to touchpoints that should be tagged to understand about your site. Avoid this get some actionable data out of your mistake if you can. It is important that system. The table here provides # Page Events/Actions a quick summary of the 1 Home Page Page View or Home Page Load screens that follow: 2 Home Page Search Button click 3 Home Page Category Menu click 4 Category Page Item/Product click 5 Category Page Sub-Category Menu Option click 6 Product Detail Page Add-to-Cart click 7 Cart View Page Start Checkout click 8 Cart View Page Cross-Sell Item click 9 Cart View Page Alternative Payment Methods click 10 Shipping Information Page Continue to Next Step click 11 Billing Information Page Continue to Next Step click 12 Order Review Page Submit Order click Home Page 1. Home Page Load 2. Search Button 3. Category Menu Click Click ©2010 Demandware, Inc. | www.demandware.com 5
  6. 6. Category Page 5. Sub-Category Menu Click 4. Item/Product Click Product Detail Page 6. Add-to-Cart Click ©2010 Demandware, Inc. | www.demandware.com 6
  7. 7. Cart View Page 7. Start Checkout Click 9. Alternative Payment Methods Click 8. Cross-Sell Item Click Shipping Information Page 10. Continue to Next Step Click ©2010 Demandware, Inc. | www.demandware.com 7
  8. 8. Billing Information Page 11. Continue to Next Step Click Order Review Page 12. Submit Order Click ©2010 Demandware, Inc. | www.demandware.com 8
  9. 9. 8 Metrics You Should Always Track Standard analytics tools provide a number of unique visitors to the laundry list of metrics that can be website during a time period. The tracked. If you are just starting out key difference between Visitors and with ecommerce analytics, then it is Unique Visitors is the former is a count critical to distill this list down to the of number of times people visited the most important ones – i.e., true “Key” website, while the later is the count of Performance Indicators (KPIs). Below number of people who visited the site. Useful Tools is a starter list of essential KPIs that you should track for your ecommerce 3. Referrers – While it is good to know Google Alerts site. Look to build on this list as your how many visitors are coming to your (www.google.com/alerts) internal practice evolves and as site, it is equally important to know you understand your site and your where they are coming from so that Google Alerts sends customers better. you can focus your marketing dollars frequent email updates of effectively. There are two good sources The KPIs are split into three differ- of referral information – referring web- the latest Google search ent categories – Acquire, Engage sites and key search phrases used by results based on your and Convert. Each category provides visitors referred from search engines. choice of keyword query unique insights into the function and This information tells you where the or topic. You can use this effectiveness of your site in reaching visitors came from, and what they were to monitor the industry, a its business goals. looking for. specific competitor, and even your own company Acquire – Metrics that help measure Engage and website. site traffic and its quality 4. Page Views – A page view is sometimes also referred to as depth of Engage – Metrics that help understand visit. It measures the number of pages how visitors are interacting with the viewed on the website during a visitor site once they are on it session. This can also be used as a proxy for customer engagement; i.e., if Convert – Metrics that help track a visitor is viewing more pages on the the ROI for the site from various website, then the content is probably perspectives more engaging to them. It is important to understand that if you are running Acquire a Flash or Ajax heavy site, no matter 1. Visits – This metric may also be how deep those user experiences are, referred to as Visitors or Total Visitors, they will get reported as one page view depending on what analytics tool you (per session). are using. Visits measure how many times people visit the website during 5. Time on Site – The most frequent a given time frame. Technically speak- use of time on site is to measure en- ing, this is the total count of browser gagement. The general assumption sessions for a given time period. being that if the website is more engaging to the customer, then they 2. Unique Visitors – As the name should be staying on the site for a suggests, this metric identifies the longer time period. Not all analytics ©2010 Demandware, Inc. | www.demandware.com 9
  10. 10. tools provide this metric out-of-the- 8. Visitor Conversion Rate – For our box and you may need an analytics purposes, visitor conversion is defined professional’s assistance in setting here as the percent of visitors who up this metric in your reports. completed a transaction (order, return, exchange) on your website; - i.e. Total 6. Bounce Rate – This measures Transactions divided by Total Visitors the percent of traffic that saw just for a given time period. eCommerce one page on your site and left. This sites are measured, for the most part, is a great way to measure the quality by their ability to generate revenue and of traffic arriving on your site. While a sales. This is a direct measure of busi- 0% bounce rate will be an unrealistic ness outcome. Be sure to know your expectation, you should benchmark industry’s average conversion rate and against your industry vertical. compare against it to benchmark your site’s performance with your competi- Convert tion. 7. Orders/Revenue – Most analytics tools provide the ability to track orders placed online and the related revenue generated, out of the box. ©2010 Demandware, Inc. | www.demandware.com 10
  11. 11. Do’s and Don’ts of eCommerce Analytics With the technical primer and key especially with others in your orga- metrics as background, let’s look at nization. Tools like Compete.com or some best practices that you can put Coremetrics’ Quarterly Benchmark Re- to work right away to better under- ports can be very useful in benchmark- stand your customers, improve their ing your metrics with others in your shopping experience and increase industry. These tools also give you the conversion rates. opportunity to explore other metrics Useful Tools that your peers may be tracking. 1. Don’t track analytics in real time. Compete It may be tempting to place a test 3. Don’t try matching numbers from (www.compete.com) order on the site and immediately log different analytics tools. in to your analytics tool to track that At Demandware, we often see cus- The free version of this order, but unfortunately, most analytics tomers using Google Analytics or a tool allows you to com- tools don’t work that way. If you are similar free tool to get started with their using a service that is running inter- analytics practice, and then upgrading pare basic profile data of nally in your data center, that might be to a paid tool as their needs evolve. up to three websites. Site a realistic expectation. If you are using They often upgrade to the new tool profiles include Unique an analytics vendor that is making the without letting go of the original one. Visitors, Visits, Page Views tool available via software as a service This can create confusion - with more and Compete’s Internal (SaaS), it may take anywhere between than one analytics/reporting tool being Rankings for these sites. 2-6 hours for your order to become available to the team and data from Before you start querying visible in the various reports. And one tool being compared with data your competitors’ sites, it that’s okay. Real-time analytics is only from the other. The data from two is important to understand useful if you are trying to debug a set different tools seldom match and can how the data is provided. of events taking place within a specific lead a team down an endless loop of The service leverages a session; but then, analytics tools are debugging issues that may not exist in sample of over two mil- not meant to be used for debugging the first place. Different analytics tools lion Internet users. These anyway. function differently behind the scenes, and it is normal to see a 2-3% variance users have granted Com- 2. Leverage benchmarking to gain in the metrics reported in these tools. pete.com permission to effective insights. If the variance were to reach double analyze the web pages Benchmarking is important to be able figures and if they were to trend in dif- they visit and ask them to glean effective insights from your ferent directions at different times, then questions via surveys. site data. Without actionable insights, it is a cause for concern as it would data isn’t really worth much. Bench- indicate that one of your tools may not marking against industry vertical be functioning correctly. averages and competitive sites allows you to look at your performance from 4. Don’t stop at metrics. Include a different perspective. The best part insights. is that you are not making judgments Most dashboards are a collection of based on just your own data! You numbers and graphs. It’s up to the will be able to look at your data in a practitioner to interpret what the data neutral context, which is usually more means. Including a section for insights conducive to better decision making, in your ecommerce analytics report ©2010 Demandware, Inc. | www.demandware.com 11
  12. 12. allows the intelligence from the ana- 8. Segment! lyst to percolate at the highest levels Reporting by numbers on their own is and helps executives and colleagues generally not very useful. Sometimes understand it better. If possible, also even reporting by trends doesn’t give include a section for recommended us the entire context we need to gain actions. This keeps readers from the kind of insights that will drive good focusing on poking holes in your decision making. Let’s consider a analysis and puts more emphasis on simple example. A typical web report- making decisions and taking action. ing metric is visitors to your site. Let’s say there were 100,000 visitors to 5. Limit your report to one-page. your site last month. Do you know if With all the out-of-the-box reporting that is good or bad? Now, if we trend capabilities available in analytics tools, this against the same month last year, it’s tempting to include all the possible and we find that the visitor count this data points in your report. This dilutes year has decreased, does that give us the focus of the reviewers and deci- sufficient insight to make actionable sion-makers and makes if more dif- decisions? And, if we were to seg- ficult for them to focus on action items. ment the visitor traffic by referring sites Building a report that can be printed and search keywords, and trend each on one standard letter size page in segment with the same month last a readable font size forces rigor in year, chances are you will see which selecting KPIs and focuses your source(s) is/are trending differently. organization’s attention accordingly. This may indicate where you want to focus your acquisition dollars for next 6. Assign an owner for every month. In most cases, the more you metric. can segment the data, the more you Every metric in your report should have can learn. a clear owner in your organization. This ensures that action gets taken where 9. Don’t forget seasonality. necessary. Additionally, when you are Identify metrics that are affected by reviewing your KPIs in a meeting, it will seasonality and factor that into your be clear who is responsible for resolv- analysis. One way to ensure this is ing specific issues, speeding decision visible to the decision makers is to go making and action. a bit beyond the traditional calendar ranges. Do things like a 13-month 7. Treat analytics as “work-in- trend, or look at 5 quarters or 8 days. progress.” Web analytics relies on a collection of 10. Include qualitative data in your imperfect systems to collect, ana- analysis. lyze and report data. These systems Sometimes ecommerce organizations include Javascript tags, cookies, new get stuck in clickstream analysis and technologies that don’t get detected don’t take the time to consider why by existing analytics systems, etc. The customers do the things they do. result is a data set that is not perfect. There are various tools and techniques In most cases, we need to rely on our that can be used to analyze custom- judgment and experience to make ers’ online experience, including decisions from this imperfect data. usability testing, customer satisfaction Get comfortable with a certain level of surveys and A/B testing. Try them out imperfection and move on with your and you may be surprised at what you decision making. can learn. ©2010 Demandware, Inc. | www.demandware.com 12
  13. 13. Reporting Templates to Get Started It’s not only what data you present, include space for the data that would but also how you present it. Below need to be queried to create these we have provided a couple of simple charts. The second template is an templates that you can use to build example that an analyst might use to your own unique ecommerce analytics derive his or her daily observations. reports. The first template represents a dashboard approach that a decision- maker would review. These do not Template 1 ©2010 Demandware, Inc. | www.demandware.com 13
  14. 14. Template 2 ©2010 Demandware, Inc. | www.demandware.com 14
  15. 15. Difference Between Third-Party and Demandware Analytics About Demandware Analytics • Javascript can detect client-side Demandware offers robust analytical metrics such as screen size, resolu- tools that enable you to capture and tion, bandwidth, etc., which a log interpret relevant information for your based analytics tools may not be able ecommerce business. Demandware to detect. Additional resources uses web logs for analytics because to learn more about it’s faster than pulling data from the • Web log data can become unreli- web analytics for database. The web logs represent all able with high levels of page caching ecommerce: storefront web activities, for example, in the infrastructure. Pages served orders entered by consumers. They through an intermediate caching server do not represent activities like order and not through the primary web • Web Analytics cancellations, order modifications server may not get reflected correctly Association (www.webanalyticsassociation.org) and returns performed off-line by the in the web server’s log files. merchant. • Occam’s Razor – Blog by • While log-based analytics tools Avinash Kaushik Key Differences identify visitors using session IDs, (www.kaushik.net/avinash) • Since Demandware analytics Javascript based tools do the same servers reside within Demandware’s using cookies. The inherent differences • Kaizen Analytics infrastructure, access to the web log in these two approaches will ensure (www.kaizen-analytics.com) files is always available (to the applica- that there is always a difference in this tion, not to the business user). With a metric between the two tools. 3rd-party tool, the data would reside outside of your control and within the • With web-log based tools, your tool vendor’s infrastructure. pages do not need to be “tagged” for analytics, but with Javascript-based • Since it is not dependent on tools, if you miss tagging a page, then Javascript, Demandware’s analytics it won’t be tracked. will work even on browsers where Javascript is turned off. ©2010 Demandware, Inc. | www.demandware.com 15
  16. 16. Putting eCommerce Analytics to Work for You If you don’t have an internal analytics Demandware’s Retail Practice group practice, then the insights and best has put these best practices into ac- practices outlined in this paper can tion for many of the world’s leading help you start one. If you have an online retailers and consumer brands. analytics practice or process within We’re here to help you in any way we your organization or team, then you can. Contact your Client Relationship may want to analyze and prioritize your Manager to get started on putting focus based on the ideas described these ideas to work for you and refin- here. What best practices are most ing your current ecommerce analytics important to your businesses success? practices to align them more closely What metrics concern you and your with your business success. organization? Are you sure you are focusing on the KPIs that have the most impact on your business? Action Plan for Improving Your eCommerce Analytics • Share this White Paper with your colleagues. • Evaluate your current ecommerce analytics practices against these best practices. • Identify the most important areas for improvement. • Plan and execute. • Contact Demandware if you need more information. About the Author Vinod Kumar is a Solution Strategist at Demandware Borders.com, CharlotteRusse.com and UnderAr- with primary focus on business analysis and web mour.com. His responsibilities included managing all analytics. He is responsible for supporting clients aspects of the customer relationship and being the and helping them grow their online business by customer’s voice within the software vendor organiza- leveraging consultative advice and service offerings tion. Vinod has also worked with leading technology to adopt best practices. vendors like Sun Microsystems implementing their solutions at global companies like Vodafone. Prior to Demandware, Vinod managed Customer Success programs for multiple software vendors Vinod has a Bachelor of Science in Computer and worked with leading online brands such Science and an MBA in International Business. as Urbanoutfitters.com, Anthropologie.com, ©2010 Demandware, Inc. | www.demandware.com 16
  17. 17. About Demandware, Inc. The trusted, global leader in on-demand ecommerce, Demandware revolutionizes how businesses deliver customized shopping experiences to consumers in the digital world. Only Demandware combines the on-demand ecommerce platform rated #1 by industry analysts, an open ecosystem of partners that extend the value of the platform, and measurable commitment by its employees to enabling client revenue growth. Demandware continually sets industry standards for market innovation and client satisfaction. Demandware clients include industry leaders such as Bare Escentuals, Barneys New York, Columbia Sportswear, Crocs, Frederick’s of Hollywood, Hanover Direct, Jones Apparel Group, Lifetime Brands, Michaels Stores, Pana- sonic, Playmobil and Reitmans. The Retail Practice team at Demandware is dedicated to helping clients grow their online revenue. Retail Practice has three key areas of focus: revenue growth, retailer advocacy and industry thought leadership. The team consists of ecommerce industry experts across many different verticals with more than 100 years combined experience. Retail Practice members are product specialists skilled in the features/functionality of the Demandware application and know how best to optimize for revenue growth. The group’s expertise also extends to defining end-to- end solutions which includes merchandising, marketing (acquisition and retention) and design. Retail Practice team members are champions for the long-term value each client represents to Demandware, and act as the conduit in and between Demandware clients and the community. © 2010 Demandware, Inc. ©2010 Demandware, Inc. | www.demandware.com