How Does Google Analytics Work For eCommerce Websites?

The average eCommerce website owner relies on a number of different avenues to evaluate their online store’s performance, and to determine what might be done to improve it. This could include things like reading user surveys, customer posts on social networks, and frequently asked questions, but these can only offer so much insight. The most valuable information is real user data that must be collected by specialized software. The statistics and metrics gathered by these types of software arm the eCommerce website owner with robust and actionable data. Since 2005, Google Analytics has become the most popular analytics software due to its ties to the Google search engine and Google Adwords. This, combined with the fact that it is completely free for the majority of its users have given Google Analytics a dominating market share. A paid premium version does exist for enterprise eCommerce websites.

What is Google Analytics?

Google Analytics is a web analytics software and service that tracks all website traffic to your website. The data gathered can then be viewed in a number of intuitive, customizable reports. It is by far the most frequently used analytics software around, due to its robust feature set and alluring price tag (free for the majority of users). Additionally, GA isn’t just for websites; it can be used with mobile apps, digital kiosks, and more. Recently, Google launched GA4, so it’s important to complete a GA4 transition.

How Does Google Analytics Work?

Simply collecting data can be valuable, but without meaningful extraction, that data is just a pile of numbers. As such, this data must be analyzed and displayed in a meaningful way. Google Analytics utilizes a four-step system to accomplish this feat:

1. Data Collection

The first step, of course, is to begin collecting data in real-time as users navigate and interact with the website that is being tracked. After JavaScript code is placed in your website’s markup, it is able to collect and transmit information back to Google Analytics servers. Tracking of more sophisticated actions on the website, such as certain events or interactions, may require specific snippets of JavaScript to be placed within that specific element. For eCommerce websites, this data is collected in real-time.

Every time a visitor arrives at your site, the JavaScript code is executed by the user’s web browser. At this point, as much information about the visitor as possible is collected, including the date and time of the session, device type, operating system, screen resolution, location, etc. Some of this information may not be readily available to the JavaScript code depending on the specific settings of any given visitor’s browser and computer. After this initial information is collected, the code creates and stores a few cookies with some basic information about that visit on the visitor’s hard drive. Since Google has now required all searches to be run under the HTTPS protocol, even less useful information is available to the JavaScript code.

2. Data Processing

Raw data is only valuable if it is processed and displayed in a meaningful and understandable way. After data is collected by the JavaScript code, it is sent to Google’s service for data processing. This is when Google computes the data into useful metrics that can be used to evaluate site performance. Google has a number of “reports” that show different facets of the information collected, accessible within their GUI dashboard.

For an eCommerce site, one of the most important metrics available is revenue. Data processing allows you to view what search engines your revenue is being generated from, the average dollar value per transaction, etc. These are the types of meaningful metrics that are available only after the raw data is processed. It is then displayed in the Google Analytics admin, often combined with graphs and/or other visual elements to make for an even more intuitive experience.

3. Data Configuration

After your analytics data is processed, the data is manipulated to satisfy your specific settings and configuration. For example, you may have chosen to exclude your office’s IP address from the data so that your company’s use of the website does not affect your data. Once this data has been processed, it is sent to the Google database for storing. Once this data has been processed, it cannot be altered. This is why it is important to create several different views of your website in Analytics, leaving an unfiltered view of your website’s data so that you always have the most accurate raw data, just in case you ever need to go back and look at something that your configuration may have prevented from tracking.

Setting up custom filters allows you to exclude specific IP addresses and much more from affecting your analytical data.

4. Data Reporting

Google Analytics presents this information to its users utilizing a web interface typically accessed at google.com/analytics. This data can also be retrieved by a third-party interface using Google’s Core Reporting API. For most purposes, Google’s interface is robust and intuitive enough, but some of the gigantic eCommerce sites may decide to choose a third-party software that can better be customized to their exact needs. In fact, some of these companies don’t even use Google Analytics to collect the data but use a third-party service for that as well.

Google Analytics provides the eCommerce website owner with invaluable metrics and insight regarding how users are interacting with their website. From there, the webmaster is able to make informed decisions on how to best improve their eCommerce store.