Benefit of Product Analytics for E-commerce

As the race to acquire more market share intensifies e-commerce companies are doing everything they can to retain their current customers and gain new ones. This fierce competition led e-commerce companies to invest more into analytics platforms.

E-commerce companies face several issues in acquiring and retaining new customers while not burning a hole in their pocket. Product managers are facing are with questions such as:

What marketing channels are bringing the best results by delivering more customers?

What is the lifetime value of a customer?

What percentage of our newly acquired customers stays as a customer?

What attributes do our best customers share?

Product Analytics

Product analytics allows your product teams to analyze your users behaviors while using your app to get a better insight into your customers. Having an understanding of your users’ behaviors enables product teams to ship better features or design better products for their customers.

Why Do E-commerce Companies Need Product Analytics?

E-commerce is a B2C business, and it’s essential to understand how users are behaving while they are using your services. Thanks to the digital footprints, your product teams can gather customer event data and analyze it to understand what drives your customers to engage with your platform.

Example 1

By using the funnel feature product managers can create a funnel by selecting an end goal and the steps to reach it. From here they can see where the number of customers drops significantly and pinpoint the bottlenecks to eliminate them and provide a better shopping experience for the customers.

Example 2

Let’s say that you advertise your product on Instagram and you want to see how your ad performed while analyzing the demographics of your target audience to find out the right prospects for your next campaign so that you can tailor your next ad campaign for the right audience. Doing this will enable you to optimize your marketing campaign in a better way to get a higher ROI.

Example 3

E-commerce is a very competitive industry with slim profits. Companies need to acquire new customers from various marketing channels to stay alive. Acquiring new customers alone won’t be enough if the cost of acquiring a customer is more significant than the customer’s lifetime value. If this is the case, then you are burning cash just to increase your customer base while hemorrhaging money.

With product analytics, you can calculate your customer’s lifetime value and acquisition cost to optimize your marketing budget better. You can also track whether your newly acquired customers will stay as a long term customer or churn. It’s imperative to monitor the retention of your new customers to have a sustainable customer base. You can do that by using the retention feature of the product analytics.


Understanding user behavior is crucial for e-commerce companies. If you would like to try our platform for free, you could check us out from here.


Can Ozuysal