eCommerce Analytics – Challenges, Opportunities, and Best Practices

Last Modified: May 24th, 2023

all about ecommerce analytics, trends and challenges

The eCommerce sector came into its own during the pandemic, with global retail eCommerce sales expected to grow to over USD 8 Trillion by 2024. Today, eCommerce accounts for over 20% of all global retail sales, with increasing digitization accelerating expansion worldwide. However, eCommerce businesses today face many pressing challenges – increasing competition, technological concerns, growing complexity of operations, and more. 

In this guide to analytics for eCommerce, we will cover the challenges eCommerce businesses face and how they can be overcome using eCommerce data analytics and an integrated approach to data.

Challenges and Opportunities in eCommerce Today

Growth has brought unique challenges to the eCommerce industry — let’s quickly look at some of them.


Business owners and marketers must constantly innovate to attract and retain customers in the highly competitive eCommerce industry. Today, access to – and utilization of – reliable eCommerce data analytics can make or break your online business. Data-driven businesses use analytics tools today to optimize pricing, meet customer expectations more effectively, and increase the ROI of all their activities. 

Security and Privacy

In an age of increasingly sophisticated cyberattacks, data breaches, identity theft, credit card fraud, and other complications, companies must be vigilant in ensuring that their website is equipped to handle these external threats. 


eCommerce companies must ensure the timely and error-free delivery of products to customers, and managing complex shipping and logistics operations can be challenging. Delays, damaged products, and errors can reduce customer satisfaction and impact unit economics.

Customer Service

Your customers today expect nothing less than seamless delivery and service. Delayed response, stockouts, billing issues, unclear policies, etc., can significantly impact customer satisfaction with your business, increasing churn and return rates and driving up business costs. 


eCommerce companies must invest in and maintain robust technology and infrastructure to ensure a seamless shopping experience for customers. Technology impacts every aspect of an eCommerce business, from the website experience to payment processing, order tracking, and more. Staying updated can be challenging, especially for small businesses with limited resources.

Brand and Reputation Management

Building a strong brand with a stellar reputation is crucial for eCommerce businesses. Businesses have realized the importance of social proof and use tools and strategies to surface this better. Brands can manage their reputation by engaging with customers, responding to feedback, and taking corrective action.

The Scope of eCommerce Analytics

eCommerce analytics refers to the tools and processes an eCommerce business uses to collect and analyze all the relevant data. Accurate data can help eCommerce businesses sustain an edge over their competitors, from customer acquisition and retention to logistics and payments. Let’s look deeper into the possibilities of eCommerce data analysis today. 

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Here are some ways an eCommerce business can benefit from analytics.

Customer Acquisition

Data related to the acquisition of new customers can be valuable in helping you grow your business. Analytics can show you:

  • How your buyers found you online
  • What products get the most views and searches
  • Which channels are driving the most (and least) conversions
  • How your conversions are trending over time
  • Which campaigns and channels you should double down on
  • Where do most of your buyers come from (geography, language, device, etc.)

The average cart-abandonment rate across eCommerce sites today is a whopping 70%.


Customer Retention

It isn’t enough to acquire a customer; you also need to retain them and encourage repeat purchase behavior. Analytics can give you valuable insights such as:

  • How many of your customers return for repeat purchases
  • The average time between repeat purchases
  • Which product category has the best overall customer satisfaction rates
  • How much of your monthly revenue comes from new vs. existing customers
  • How many of your customers are active promoters of your products

Measuring ROI

Since you run various marketing campaigns on multiple channels, measuring campaign performance is essential to understand the ROI of each. Here, analytics can help you understand:

  • How much revenue you generated with pay-per-click ads
  • The break-up of revenue generated by each social media channel
  • How much return you have earned for the amount spent on paid campaigns
  • Which marketing campaigns have the best scope for scaling up

Improving Efficiency

Using data, you can identify ways to improve operational efficiency through

  • Finding ways to speed up delivery times
  • Forecasting future demand and performance
  • Uncovering trends that can help manage inventory more efficiently
  • Pre-empt commonly faced service issues
  • Planning staffing for high and low-traffic phases

Increasing Profitability

All businesses want to decrease running costs and increase revenue to improve profitability. Data-driven businesses can use analytics to discover:

  • Cross-sell and upsell opportunities
  • Segments of customers that drive high revenues
  • Product-wise pricing that has the best potential for conversions
  • Products that have the potential to improve margins

In addition, eCommerce analytics can help you understand broader trends in the industry and adapt or plan for them. 

6 Best Practices for eCommerce Data Analytics

You can measure a lot in eCommerce, and sometimes it can be hard to decide what to prioritize. We asked eCommerce marketers to share their best practices for analytics, and here is what we learned from them. 

Decide What You Need

“My main advice is to start small. It’s easy to get overwhelmed by the sheer amount of data available, but it’s important to focus on the metrics that matter most to your goals.”

Todd Saunders, Founder, BIG Safety

Every eCommerce store is unique. Study your website and customers, consider your business objectives, and decide what to measure against that background. It is also crucial to watch trends over time and not look at individual data points in isolation. 

“Decide on the metrics that matter the most for your store, and avoid going for what each industry expert recommends.”

Alvin Wei, Co-founder and CMO, SEOAnt

Invest in the Right Data Stack

Besides deciding which data points to measure, it is also important to ensure that you build a robust system for collecting and organizing data. An integrated data stack, consolidating disparate data from multiple sources into a single source of truth, such as a data warehouse or data lake, will help improve data accuracy and enhance your decision-making. You’d also want it to be a scalable solution that can grow as your operations expand. 

Pay Attention to Data Quality

To ensure maximum ROI, it is critical to ensure that your eCommerce analytics data is always accurate and reliable. Data quality issues such as duplicate or missing records or inconsistent formatting can lead to inaccurate insights. This can result in poor decision-making, wasted resources, and missed opportunities. Neglecting data quality can also reduce the credibility of your eCommerce analytics. 

You can protect the quality of your data by using reliable analytics tools, regularly auditing your data sources, and using data cleansing techniques to remove any inconsistencies or errors. 

“You should establish data quality standards and invest in robust data management tools and technologies to ensure the accuracy, reliability, and security of your eCommerce analytics data.”

James Wilkinson, CEO and Co-founder, Balance One Supplements

Use Data Ethically  

Don’t ignore data privacy and security best practices when collecting and storing customer data. Apart from being careful while collecting data, it is also important to use the data you collect ethically –— don’t use it for any purpose other than what is intended. Your customers need to trust that you will protect their data. If you operate internationally, being GDPR and CCPA-compliant is a good practice. 

Avoid Data Silos

No amount of data collection will help you if data from various sources are available with individual teams instead of being centralized. Disconnected data from sources like CRM, Google Analytics, Shopify, Facebook, Intercom, etc., is a surefire way to create misalignment between teams and obfuscate insights. Data should be integrated and centralized so that everybody in the organization can access the same information and insights. 

Make Optimal Use of Your Data

You should use data and analytics to measure performance and validate assumptions, find opportunities for improvement, and test new strategies. The most efficient organizations use data to inform all business decisions. For this, you should also ensure that insights are shared across the organization with all stakeholders. All this is easier to do when integrated data is available in a data warehouse. 

“Don’t let data analysis become an end in itself; use the insights you gather to inform actions and decisions.”

John Cammidge, Google Ads consultant
best practices for ecommerce data analysis

Key eCommerce Metrics to Measure for Your Business

Here are some critical metrics you can track using eCommerce analytics tools, to optimize different areas of your business.

Sales and Marketing

  • Traffic
  • Click-through rate
  • Conversion
  • Average Order Value (AOV)
  • Cart Abandonment Rate
  • Return on Ad Spend (ROAS)
  • Customer Acquisition Cost (CAC)
  • Social Media Engagement

Supply Chain Management

  • Refund/return Rate
  • Backorder Rate
  • Order Accuracy
  • Order Cycle Time
  • Inventory Turnover
  • Inventory to Sales Ratio

Customer Retention and Support

  • Repeat Purchase Rate
  • Customer Lifetime Value
  • Customer NPS
  • Churn Rate
  • Average Handling Time

Read More: Important marketing metrics to measure

Now that you know the metrics you want to track for your business, let’s look at some popular eCommerce tools to help you with this. When integrated into a data warehouse, data from these tools will give you a real-time view of your business’s performance. 

  • Google Analytics: Google Analytics is free to use for insights such as your traffic sources, top-performing pages and content, and areas of improvement (drop-off points). GA will also help you understand where your visitors are based (geographically) and the kind of content they consume before exiting or converting. 
  • Hotjar: Hotjar creates heat maps to show how customers interact with your website. You can use it to understand conversion paths and test copy and CTAs, see which areas of your site need improvement, and identify weak aspects of the funnel.
  • Mixpanel: Mixpanel helps you track essential product metrics like product views, add-to-cart conversions, drop-offs, etc., through interactive dashboards. You can also use it to build custom funnels to optimize conversions. 
  • Aftership: A post-purchase experience platform, Aftership helps you track shipments, provide delivery estimates, offer proactive solutions, and collect customer feedback. All this can go a long way in enhancing your customer experience
  • Delighted: Stay in touch with customer sentiment through feedback from tools like Delighted. You can use it to send customer satisfaction surveys, NPS surveys, and more. Insights from these surveys can help you reduce churn, increase customer satisfaction, and improve brand loyalty. 
  • Help Scout: eCommerce businesses can use a tool like HelpScout to track and manage customer conversations and report important metrics like response time, handle time, resolutions, etc. 

Read more: How to evaluate marketing analytics tools

So you know what to measure and what to keep in mind as you run your eCommerce business. What, though, are some of the new and upcoming trends in eCommerce you should be aware of? Here are some of the important trends that marketers are observing today. 

Customer Retention Through Analytics

Customer retention is quickly becoming a major area of focus for eCommerce companies of all sizes. Data-based rules are being used to anticipate customer churn and offer customized benefits that can drive retention. Analytics also helps companies identify customer segments to prioritize based on their purchasing preferences and frequency. 

Omnichannel and Multichannel Retail

Today, eCommerce brands are increasingly running integrated marketing campaigns across multiple channels, including websites, apps, social media channels, email, WhatsApp, and physical stores. This convergence necessitates a well-thought-through strategy for collecting, managing, and utilizing data. 

Increasing Adoption of Predictive Analytics

Predictive analytics uses historical data and machine learning algorithms to predict future customer behavior and market trends. This can include predicting which products will be popular, which customers are most likely to buy and when, and the products they are most likely willing to purchase. Predictive analytics also helps determine which marketing strategies might be effective.

“One of the key benefits of predictive analytics in e-commerce is that it can help businesses to make more informed decisions about inventory management, pricing, and marketing. “

Lisa Richards, CEO and Creator of the Candida Diet

Real-time Analytics

Real-time analytics is another critical trend in eCommerce as businesses look to respond quickly to changing customer behavior and market conditions. Real-time analytics enables businesses to monitor customer behavior and immediately adjust their strategies.

Use of AI/ML Technologies

Artificial Intelligence (AI) and Machine Learning (ML) are becoming increasingly popular for eCommerce analytics. AI enables eCommerce companies to automate customer segmentation and personalization to deliver a more personalized customer experience. For instance, customized product recommendations can be provided based on a customer’s profile, online behavior, social footprint, and past purchases. 

Companies can also incorporate sentiment analysis to understand the context of online product reviews and use machine learning algorithms to build dynamic pricing for products to remain viable in a competitive market. 

How Data-driven eCommerce Businesses Win with Hevo


Meesho, a Y Combinator-backed startup, is India’s leading social commerce platform that enables small businesses and individuals to start their online stores via social channels such as WhatsApp, Facebook, Instagram, etc.

Meesho used Hevo to streamline their data pipelines to improve access to data for all their users. Teams at Meesho track their core metrics and create custom reports in real time on the data made available by Hevo. Since the implementation of Hevo, the data team has focused on generating extensive reports on customer and seller analytics.

“By making the data available in real-time, Hevo has enabled us to improve data centricity across the organization and our seller partners.”

Vidit Aatrey, CEO of Meesho


Deliverr, the California-based eCommerce technology startup, helps consumer businesses accelerate their marketplace and website sales with affordable 2-day fulfillment. They primarily use shippers’ data, proprietary algorithms, and a network of warehouse partners to enable fast eCommerce deliveries for their customers.

Data plays a strategic role in Deliverr’s business model, and they use Hevo’s data pipelines to replicate their data to Snowflake for advanced analytics. 

“Our operations team uses reports & ML models to manage the warehouse network, monitor on-time delivery, and ensure seller satisfaction. And Hevo plays a crucial role in providing the most accurate, real-time, and unified data to all our business stakeholders.”

Emmet Murphy, Staff Software Engineer, Deliverr


Jumbotail is a B2B food and grocery platform that serves 30,000+ grocery stores via its full-stack eCommerce model. They manage their business using three different applications, with their data warehouse serving as the single source of truth. 

Jumbotail uses Hevo pipelines to move customer, order, inventory, and last-mile data from their business applications to Amazon Redshift.

“Today, we have multiple pipelines running on Hevo that process over 500M events every month, and we haven’t faced any data drop so far. “

Nikhil Bhatnagar, Software Engineer at Jumbotail 

Summing Up

Today’s competitive landscape brings challenges that eCommerce companies must overcome strategically. Efficient use of data and analytics can help businesses improve customer acquisition and retention, optimize supply chains, improve unit metrics, and measure customer satisfaction. A comprehensive marketing data stack that creates an integrated view of all data will give you a holistic, real-time view of all your marketing and customer data for quick insights.  

Over 2500 data-driven businesses globally trust Hevo to integrate their disparate data from a growing library of 150+ data sources. Hevo’s no-code, fully automated data pipeline solution helps teams simplify their data management processes and improve time to insights. 

Visit our Website to Explore Hevo

Want to take Hevo for a spin? Sign up for a 14-day free trial and experience the feature-rich Hevo suite firsthand. You can also have a look at our unbeatable pricing that will help you choose the right plan for your business needs!

Neha Sharma
Former Associate Director- Content Strategy, Hevo Data

Neha has extensive experience in freelance consulting, encompassing strategic thinking, integrated marketing, and customer acquisition. She has driven growth for startups and established brands through comprehensive marketing communications, and digital strategies.

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