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The importance of data in eCommerce  

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Transform your eCommerce business with data-driven decision-making

Never underestimate the value of data-driven decision-making in gaining a competitive edge.

As the eCommerce sector grows and new competitors enter the market, the importance of data-driven decision-making cannot be underestimated.

Businesses that integrate data analytics into their marketing strategies have an edge over the competition. They know who their customers are — their needs, habits, aspirations, and frustrations — and tailor their service offerings accordingly, resulting in greater satisfaction and higher conversions.

Data analysis guides your decision-making so you can refine your marketing strategy over time. Tracking historical patterns and trends means you can more accurately:

Insights and benchmarks make it easier to assess your performance and set goals — you can see how you compare to competitors, and measure your own results year by year or month by month. You can also test out different tactics to see what works best.

In this blog post, we’ll look at why data analytics is a must for any eCommerce business strategy. We’re going to cover:

  • Why data analysis is important for eCommerce
  • Business benefits of using data analysis
  • What it looks like in practic

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Reasons for data analysis in eCommerce

Although instinct and intuition can be valuable guiding factors when facing tough business choices, today’s increasingly competitive market means there is little room for guesswork.

According to a study conducted by BARC, an estimated 58% of companies say they make decisions based on ‘gut feelings’ or ‘experience’, rather than on verifiable data. 

And sometimes, the reason for that was because data wasn’t available, or when it was, it was poor quality. In a 2022 Great Expectations study, 77% of the companies surveyed admitted to having data quality issues, and 91% said these issues impacted their company’s performance.

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Understanding customer buying behaviour

There are many factors that influence a customers’ purchase decisions, and not all of them are within a business’s control. Less-than-favourable economic conditions and an increasing awareness of the climate crisis are leading many consumers to re-evaluate their spending habits.

At the same time, every customer’s individual circumstances will have an impact on how they navigate these changes, such as their age bracket, income, or location. And also, on a more personal level, their life circumstances, daily routines, browsing times, or what kind of mood they’re in. These all play a role. 

However, it is still possible to stand out in this environment, provided you listen to what consumers are telling you and adapting accordingly. This is where segmentation comes in.

Look at how different demographics engage with your website. This will reveal differences in what they respond to and you can use this to target messaging accordingly.

Some areas that are useful to segment are:

Compare this data together with your sales records, paying attention to popular products and user demographics. With this information, you can make informed decisions about where to focus your marketing efforts, thereby maximising the potential for conversions.

You can also experiment with different types of landing pages and promotional banners for various markets or demographics.

Illustration depicting a user moving through the consumer journey to making an eCommerce purchase to depict the customer experience

Identifying trends

Innovations in data analytics software make it easier to centralise your data and provide greater visibility over patterns in user behaviour. In turn, this gives you the ability to make forecasts and predictions based on historical trends.

Modern analytics tools will track visitor numbers, referrals, actions taken, devices used and the most-visited pages over specific periods of time. Examining this data in conjunction with customers’ order histories allows you to offer them discounts based on products you know they are likely to purchase.

Removing points of friction

Data can also help you identify frustration points and barriers to making purchases. Examine data from your checkout flow to gain insights into to why customers are dropping off your website before completing a purchase. For example, examining cart abandonment figures can flag areas of improvement in your checkout process.

Although customers who abandon their shopping carts usually do so because they are just not ready to complete the purchase at that moment, there are other reasons too. Technical issues, web pages crashing or loading slowly, lengthy checkouts or high shipping costs are commonly reported frustrations.

Test out different approaches to see what works best at getting the results you want. If your goal is to re-engage users who have abandoned carts, you can A/B test different messaging or layouts to see what generates the highest engagement.

Data in eCommerce is powerful. A/B testing with data analysis allows you to road-test new ideas before investing further. And through this experimentation you’re giving users incentives to keep shopping with you.

Business benefits of using data analysis in eCommerce

Data analysis can help you optimise your business across multiple areas. It can help you attract new customers whilst keeping marketing costs down and allow you to deliver a smoother, more personalised experience that encourages brand loyalty.

Here are just a few of the ways data analysis can benefit your business in relation to:

  1. Growth
  2. Customer experience


Through the pandemic, more businesses entered or expanded within the eCommerce space. The increase in competition meant many businesses had to spend more on digital marketing campaigns to stand out.

According to a 2022 Salesfire report, the average digital advertising spend for eCommerce businesses rose by just over 12%. 

Another factor driving these price hikes is the increase in users opting out of data collection and third-party cookies. This means that businesses need to be smarter about how they use the data that they do have, whilst also being transparent about how it is used. It also means you can make smaller changes over time as you notice changes in user behaviour in real-time.

Illustration of graph with data increasing to depict website performance boosting sales

Deeper business insights gained from data in eCommerce

Having a clear picture of who your customer base is will allow you to adapt your marketing strategy, product mix and pricing to align better with consumer needs.

One important metric when it comes to data in eCommerce is average order value (AOV). Tracking AOV over time allows you to measure the effectiveness of different marketing strategies.

The more historical data you have, the better you can forecast revenue and budget accordingly. It also allows for more effective inventory management, as you can plan for seasonal trends on particular products or particularly busy periods, such as Black Friday.

You can also identify cross-selling or upselling opportunities by observing products that are commonly purchased together and marketing them as complementary products, or introducing product bundles offering better value.

Your website data can help you track wider trends and patterns. But digging deeper into these trends will reveal different types of visitors with varying intents and needs. Segmenting your customer base in this way allows you to create targeted campaigns that are more likely to result in conversions.

To further amplify growth, read how to attract customer to your WooCommerce store.

Customer experience

In a competitive eCommerce market, customers have more choices than ever. Brands that harness their data to create seamless user experiences across multiple channels have an edge over the competition.

According to a 2020 Adobe report, 89% of marketers saw a positive ROI on personalised campaigns. Take the time to find out what matters to your customers. Then deliver experiences that address their needs shows that you’re listening to them, and that you want to help. 

Connecting with your customers

Personalisation can be applied at many stages throughout the customer journey. For instance, use a customer’s name in email communication or website profiles. Send them offers based on their order history. Or innovate with your team to identify other small tweaks that add personal touches for customer experience.

Not only will this approach encourage new visitors to continue shopping with you, it also helps retain your existing customer base. As digital advertising costs rise, attracting new customers is becoming increasingly challenging for online businesses. In order to survive in this market, businesses must focus their attention on customer retention. 

By nurturing your existing base with personalised messaging and consistently delivering a high-quality user experience, you can keep your brand at the front of their mind and provide a personal touch that sets you apart in the market.

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eCommerce data in action

Crafting impactful copy that resonates with your audiences and drives conversions is often a process of trial and error. Influencing a buyer’s decision is deeply connected to human psychology. Advertising a ‘sale’ instead of an ‘offer’, or displaying savings as a percentage or a set amount, implicate conversions.

Data analysis can be challenging, and the impact of specific words and phrases on profitability is difficult to quantify. However, recent studies help us paint a clearer picture.

A report released by the UK Ecommerce Association studied high-engagement offers from companies in its network. It examined which words resulted in the highest engagement, conversions, and spend. One of their areas of focus was advertising discounts as ‘£ off’ or ‘% off’.

The study compared ‘£ off’ and ‘% off’ promotions, assessing their effectiveness by measuring clicks, conversions, and AOV. Findings revealed that using ‘£ off’ resulted in more conversions for lower-value products. Whereas using ‘% off’ on high-value items resulted in less conversions but higher AOV. 

Case study: US Polo Assn

Screenshot of US Polo Assn website homepage depicting adults and children wearing the brand's clothing

Luxury US designer clothing retailer, US Polo Assn, rolled out Spend and Save offers with experimentation. This helped the business to identify where it could maximise the profits gained from these offers.

The offers are designed to encourage customers to spend more in order to receive larger discounts. The retailer used multi-variant testing to compare the results of ‘$ off’ versus ‘% off’ in marketing copy.

The experiment found that using ‘$ off’ in promotions did not decrease sales by as high a margin as expected. And these promotions actually resulted in businesses giving less money away. Using these results to inform business decisions, the company switched to ‘$ off’ to make every sale more profitable.


So what does all of this mean for eCommerce businesses? In an increasingly competitive market, there is no longer any room for guesswork in your business strategies. Using data in eCommerce is non-negotiable.

Inspired to start looking at ways to make your data work harder for you? If so, here’s a recap of key takeaways:

Challenge yourself to use the right analytics tools, the right framework for data collection, and clearly defined metrics. With these in place, you will uncover meaningful insights. Use and analyse data in eCommerce to connect better with customers and amplify growth for your business.

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Piers Tincknell Co-founder & Managing Director

Wednesday 8th November 2023