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Home » 5 Common Ecommerce Analytics Use Cases that Every Business Owner Should Know

Analysis, Analysis Project · March 21, 2024

5 Common Ecommerce Analytics Use Cases that Every Business Owner Should Know

Want to become an expert in the world of Ecommerce? Master these 5 common ecommerce analytics use cases.

ecommerce analytics use cases

In this fast-paced world of ecommerce, continuous learning and staying ahead of the curve is crucial for a business to grow. One of the most essential tools that business owners need in their toolbox is the ability to conduct ecommerce analytics.

As a digital consultant, I have run multiple analysis projects for clients to help them gain insights into customer behaviour, market trends, and more, leading clients to make data-driven business decisions and increased profitability.

In this article, you will learn all about the importance of data analytics in ecommerce, ecommerce analytics examples, ecommerce data analysis project to run, and more.

This post highlights 5 common ecommerce analytics use cases.

What is Ecommerce Analytics?

Before diving into the use cases, what is ecommerce analytics? 

The long ass explanation: Ecommerce analytics is the practice of collecting, analysing, and interpreting data related to online retail activities. It involves tracking various metrics and key performance indicators (KPIs) to gain insights into customer behaviour, sales trends, marketing effectiveness, and overall business performance. 

The layman’s explanation: Ecommerce analytics means using data to understand how online stores work. It is about looking at information like how many people visit a website, what they buy, and what makes them leave without buying anything. These data help business owners make smart choices to sell more online. 

Knowing how to conduct ecommerce analytics effectively is super important because it helps businesses see what is working and what is not. For instance, understanding customers’ preferences, identifying market trends, refining marketing strategies, and more.

By knowing these valuable insights, businesses can make changes to convert more, make customers happier, and earn more money. 

Doing ecommerce analytics well enables business owners to stay in the online game long-term.




Use Case 1: Pricing & Promotion Plan

Picture this: you are shopping online, and you see two similar items but with different prices. Which one are you more likely to buy?

This is where your pricing and promotion plan comes into play. They allow you to help shoppers make these important buying decisions.

Ecommerce analytics can provide valuable insights into how sensitive customers are to pricing, how competitive the current pricing is, and the effectiveness of promotional campaigns. Businesses can make informed decisions to maximize revenue and profitability by analysing pricing data and consumer behavior.

Examples of analysis projects you can run

  1. Price elasticity analysis – To figure out how changing prices affect how much customers buy. Think of it like testing the waters to see if lowering prices will make customers splurge more.
  2. Promotion effectiveness analysis – To assess the impact of different promotional strategies on sales and revenue.

Real-life examples

Example 1: Amazon

You know that feeling when you are eyeing a product, and suddenly the price drops just as you are about to buy it? That is how Amazon’s dynamic pricing works. They use the power of algorithms to adjust prices based on what competitors are doing and what we shoppers are up to.

Resource for you: Amazon’s Dynamic Pricing Strategy

Example 2: Fashion Retailer

Ever notice how clothing brands always seem to have sales right when you are itching to refresh your wardrobe? This is no coincidence. They run tests to see which discount rates and timings are most effective to get us to click on that “Add to Cart” button.


Use Case 2: Conversion Rate Optimization

Do you feel like you are losing customers at every step of your funnel? This is where conversation rate optimization (CRO) swoops in to save the day. It is all about turning those window shoppers into happy customers.

Ecommerce analytics can identify bottlenecks in the conversion funnel, such as high bounce rates or cart abandonment issues. Businesses can then optimize the conversion process by analysing user behavior and testing different website elements to improve overall sales performance.

Examples of analysis projects

  1. Website traffic analysis – To identify what is working and not working on your website through identifying sources of traffic and visitor behavior.
  2. A/B testing of website elements such as landing pages, product pages, and checkout processes – To experiment with different versions of your website to see which one converts more. Think of it like testing different flavours of ice cream to see which one everyone like best.

Real-life examples

Example 1: Shopify

If you have a Shopify store, you are in good hands. Shopify uses analytics data to identify friction points in the checkout process and provides recommendations to merchants on how to optimise their stores for higher conversions.

Resource for you: Shopify’s Checkout Optimization

Example 2: Online Travel Agency

Have you ever wondered how some travel websites make booking flights and hotels a breeze? They conduct A/B tests on its booking flow to determine the most effective layout and design for increasing booking completion rates.

Resource for you: Travel Agency Website Optimization


Use Case 3: Customer Lifetime Value

Understanding customer lifetime value (CLV) is important for maximising long-term profitability and fostering customer loyalty.

Ecommerce analytics can analyze customer purchase history, behavior, and demographics to calculate CLV and segment customers based on their value to the business. 

By identifying high-value customers and implementing targeted marketing strategies, businesses can increase customer retention and lifetime value.

Examples of analysis projects

  1. CLV calculation based on historical purchase data and customer retention rates – Gives you information on who is bringing in the money
  2. Segmentation analysis – To sort your customers into different groups based on how much they spend and how often they shop. This way, you will be able to cater to the different needs of the customers. For instance, keeping the goodies for your VIPs.

Real-life examples

Example 1: Netflix

Netflix uses predictive analytics to estimate the CLV of subscribers and tailor content recommendations to maximize engagement and retention.

Resource for you: Netflix’s Personalisation Strategy

Example 2: Online Subscription Box Service

An online subscription box service implements targeted email marketing campaigns to incentivize high CLV customers to upgrade to premium subscription tiers.

Resource for you: Subscription Box Marketing Strategies




Use Case 4: Inventory Management & Demand Forecasting

Next up, inventory management and demand forecasting. These are essential for optimising supply chain efficiency and reducing costs associated with stockouts or overstock situations.

Ecommerce analytics can analyse historical sales data, seasonal trends, and external factors to forecast future demand accurately. By optimising inventory levels and replenishment processes, businesses can minimize stockouts, reduce carrying costs, and improve customer satisfaction.

Examples of analysis projects

  1. Demand forecasting models using time series analysis and machine learning algorithms 
  2. Inventory turnover analysis – To identify slow-moving or obsolete inventory.

Real-life examples

Example 1: Walmart

Walmart utilises advanced analytics and AI-powered demand forecasting algorithms to optimise inventory levels across its vast network of stores and distribution centers.

Resource for you: Walmart’s Inventory Management Strategy

Example 2: Small Online Electronics Retailer

A small online electronics retailer leverages sales data and market trends analysis to adjust inventory levels and product offerings in anticipation of seasonal demand fluctuations.

Resource for you:  Inventory Management Tips for Small Businesses


Use Case 5: Product Recommendations

Lastly, product recommendations. Personalised product recommendations can enhance the shopping experience, increase customer engagement, and drive incremental sales.

Ecommerce analytics can help to analyse customer browsing behaviour and purchase history, as well as product affinity patterns. These insights can generate personalised recommendations for customers. 

By presenting relevant products to customers at the right time, businesses can increase cross-selling opportunities and boost overall sales revenue.

Examples of analysis projects

  1. Collaborative filtering algorithms – To generate personalised product recommendations based on user behavior and preferences.
  2. A/B testing of recommendation algorithms – To measure effectiveness and optimise recommendation quality.

Real-life examples

Example 1: Amazon

Amazon’s recommendation engine analyses vast amounts of customer data to provide personalised product suggestions, significantly increasing sales and customer satisfaction.

Resource for you: Amazon’s Personalisation Strategy

Example 2: Spotify

Spotify uses machine learning algorithms to curate personalised playlists and recommend new music based on users’ listening history and preferences.

Resource for you: Spotify’s Recommendation Engine


This post introduces 5 common ecommerce analytics use cases that every online business owner should know.

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    Posted By: Jaslyn · In: Analysis, Analysis Project

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