E Commerce Analytics Demandware

Retail Practice Best Practices Guide

eCommerce Analytics
Putting Web Analytics to Work
for Your eCommerce Business

©2010 Demandware, Inc. | www.demandware.com

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

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.


• 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.


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


Category Page

5. Sub-Category
Menu Click

4. Item/Product
Click

Product Detail Page

6. Add-to-Cart Click


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


Billing Information Page

11. Continue to Next
Step Click

Order Review Page

12. Submit Order
Click


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


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.

10

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


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.


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

13

Template 2


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.


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,


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.


E Commerce Analytics Demandware

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