E-commerce Performance Reporting & Analytics in 2024

Keeping a close eye on performance is critical for success for e-commerce business owners. Even the most hands-off e-commerce entrepreneurs have something in place to enable performance monitoring at a semi-granular level, especially as it pertains to major data points such as traffic and sales.

High quality data empowers business owners to make good decisions, and the right decisions lead to efficiency, growth and healthier profit margins. The better your data and BI, the better decisions you are capable of making.

The challenge for e-commerce business owners is that they have access to so much information that there is a major risk of analysis paralysis. Too much information can create confusion, so it’s important to cut through the noise and hone in on the things that really make a difference for your business.

What Actually Is Performance Reporting?

Performance reporting involves the collection, analysis and interpretation of data from multiple sources within your e-commerce business. It can include everything from technical things such as traffic and load times, to sales and marketing related metrics such as conversion rates, sales volumes and profitability.

The businesses that do it well analyze a range of important metrics which enable them to make both macro and micro decisions. For example, at a bare minimum someone on the team should be responsible for monitoring website traffic, and there should be alerts in place to manage any outages.

All micro data points need to roll up into weekly, monthly, quarterly and annual reports. This allows the leadership team to monitor the health of the business from a more holistic level, supporting them with strategic decision making, as opposed to the tactical responses required at operational levels.

The Most Important E-commerce Metrics

Key Performance Indicators (KPIs) allow businesses to cut through the noise and focus on the most important metrics. Whilst KPIs vary from business to business, most e-commerce business will be looking at very similar things, such as:

• Website traffic. This is probably one of the most important KPIs for e-commerce businesses, especially those which rely heavily on DTC (direct to consumer). In our experience, there is usually a direct correlation between traffic and sales so it’s essential to track traffic in real-time and through trend analysis on the higher time frames. Declining traffic over time can be tackled through changes in marketing strategy; for example, by doubling down on the marketing channels driving most traffic, and experimenting with those in decline.
• Website speed. Research has shown that even a one-second delay in page load times can have a huge impact on conversions, even as high as a 7% reduction. In this day and age, customers simply do not tolerate slow websites, and will often leave a cart abandoned if they are frustrated with the performance of your website. Delivering a poor experience for your customers on account of page load speeds is unforgivable in 2024, especially when you have access to powerful frameworks such as Next.js, Astro, and even pre-rendering solutions like prerender.
• Bounce rate. Bounce rate measures the percentage of customers who leave your website after one page view. Typically, a bounce rate higher than 55% indicates that there is a problem with your website, and it’s usually the same things that affect website speed.
• Conversion rate. It’s super frustrating when your website is getting traffic but you’re experiencing a low conversion rate. Low conversions might be a result of a number of things such as page load time, user experience, product descriptions or pricing. The good news is that with most analytics platforms, such as GA4 and PostHog, it’s possible to bake high quality conversion tracking into your reporting dashboards. Split testing different solutions is a great way to drive those conversions in a Northerly direction.
• Cart Abandonment Rate: A high abandonment rate is another metric which might be a sign that customers are experiencing friction during their sales journey and it should be something tracked in real-time. Abandoned carts also offer a major opportunity for businesses to connect with their customers. If you collect customer data, you can call or WhatsApp customers to find out what’s going on. Usually there is a simple issue with which they are struggling, and they are usually grateful for proactive support to resolve their problem.
• Average Order Value (AOV). AOV is simply the average amount customers spend per order, measured in your store’s currency. Typically, a higher AOV is representative of healthier profitability, but this varies from business to business.
• Customer Lifetime Value (CLV). CLV represents the total revenue that a business might expect from a customer during the entire length of their relationship with you. With CLV, it’s possible to assign customers to segments based on value, and employ tailored retention strategies to drive customer loyalty.
• Customer Lifecycle Management. Segmenting customers based on their lifecycle is an advanced way of managing your customer base. For example, customers who have placed their first order might be delighted with a friendly, engaging welcome email. With proper lifecycle management, you can also identify lapsed customers and develop strategies to try to re-engage with them. As well as recovering individual customers, you will discover specific, actionable areas of improvement to further enhance your business.

Why Do E-commerce Companies Need Custom Development for Performance Reporting?

Whilst platforms such as Shopify and BigCommerce provide excellent “out of the box” reporting solutions, it’s not uncommon for businesses to quickly outgrow them. Default reporting solutions often lack depth or customisation options, so growing businesses tend to look for more advanced solutions which require support from a development agency.

Broadly, the issue relates to scalability and specific challenges arising from the need for bespoke solutions. In 2024, most E-commerce businesses are omnichannel and reporting across multiple channels can be challenging.

Whilst a simple Shopify sales report might suffice from newer businesses, omnichannel businesses need everything in one place. Integrating cross-platform data from multiple data sources is complex and we’re yet to see an aggregator platform which does a great job.

This is because businesses have bespoke requirements so it’s impossible to develop something which suits a whole slew of businesses. Whilst there are many interesting options out there, such as Google’s Looker Studio, there will come a point in a company’s lifecycle where it needs a custom solution, and that means a dev project.

Customers may also have unique KPIs which aren’t catered for by out of the box reports. A case in point is contribution margin, a metric that all of our e-commerce partners track but most platforms don’t measure. To illustrate the point, there isn’t one single, ubiquitous way for companies to report on profit margins and the methodology often varies across categories, so businesses require reporting solutions that allow data to be sliced and diced as they see fit.

Top Three Types of Development Project for Reporting and Analytics

Although all of our client projects have their own unique requirements, we see patterns in the types of project on which we’re engaged:

1. Custom Dashboards. Aside from the sales channel itself, custom dashboards are by far the most common project request for omnichannel e-commerce businesses. We see broad similarities across all projects given that most e-commerce businesses are tracking the same metrics. Our projects frequently involve building an in-house reporting platform which integrates data from multiple sources and flexible charting so BI teams can customize their reports.
2. Inventory management. It is still surprising that larger e-commerce platforms, such as Shopify, do not provide advanced solutions for managing inventory. Most of our clients want a platform which provides accurate run rates, intelligence on popular products, expiry date management and procurement forecasts. There are some platforms that try to do this well, such as Sellerboard for Amazon businesses, but generally they don’t hit the mark.
3. Automation. Automation should be standard practice in 2024, but it’s frequently still not the case. While it is a huge topic spanning many different processes and verticals there are many common themes. For example, pretty much all e-commerce stores (not drop shipping stores) that manage their own inventory have a requirement for some degree of automation of their fulfillment processes. Requirements can vary in complexity from simple low stock alerts to automation of the entire procurement process.

Conclusion

High quality performance reporting and analytics should be non-negotiable for all serious e-commerce business owners. In 2024, it’s simply not possible to compete without having access to accurate, meaningful data. Whilst platforms like Shopify and BigCommerce offer excellent built-in reports for smaller businesses, at scale they are very rarely fit for purpose.

Development of an in-house, custom built reporting platform is often a high priority roadmap item for growing businesses, and those which don’t have an internal development team will need support from an external development agency. The top tier e-commerce development agencies, such as Rendr Software Group, can support you with a long-term relationship which is both tactical and strategic. If this sounds like a current struggle for your company, reach out to us to see how we can help.