Cohort Analysis OR Reporting for E-Commerce Websites

Cohort Analysis OR Reporting for E-Commerce Websites

Before understanding the cohort analysis for E-Commerce websites, we need to understand the what exactly is E-Comemrce, how does it work and what are the important metrics to know while analysing data and improve performance for E-Commerce business.

What is An E-Commerce Business ?

E-commerce is a transaction of buying or selling online. So any business which buys or sell products through World Wide Web, Mobile or any other mode where transactions are happening through electronic medium is e-commerce. 

For any online business it is very much important to understand how user behave on their site, what products are searched or liked most, products which drive maximum revenue, what time user buy the product most and people who bought came to our website on one particular day/Week or month what was their behaviour on the site in coming days. 

Understanding the consumer transaction cycle or buying pattern is very much important from any E-commerce business point of view.

Answer to All the E-Commerce analysis and Data requirement is Cohort Analysis/Reports.

Ecommerce Cohort Report

There are some e-commerce specific metrics that can be analysed with the Cohorts report. 

• Revenue per User
• Transactions per User
• Total Revenue

1. Cohort report always provides the data based on the first date when the user was acquired on the site or app.
2. Cohort report also helps in understanding the every small detail related to a customer buying cycle or transaction pattern on the site.

So for example if you want to analyse customers who are buying expensive products on your platform and what is the frequency of those items to be purchased then switching to weekly or monthly cohort report will provide more accurate data.

Weekly Cohort, User revenue, last 12 weeks

Weekly Cohort, Transactions per User, last 12 weeks

If your customers purchase less expensive items, then their transactional cycle might be more regular for that using cohort over 30 days will provide more efficient data.

Daily Cohort, User revenue, last 30 days

Daily Cohort, Transactions per User, last 30 days

Cohort reports for any e-commerce business helps in understanding different campaigns behaviour, time taken by users for conversion, transactions happening particular day of the week. So analysing cohort reports are very much required to improve the performance and revenue of any online business.

Cohort Analysis : Google Analytics Cohort Report Understanding & Analysis

Cohort Analysis is basically an analysis format to represent data for different metrics which are useful for any business to understand their users behaviour.

In simple words cohort is a simple report of users engagement or repeat rate according to date, week or months and it’s calculated or presented based on user acquisition date. 

Cohort analysis is primarily useful for :

•  E-commerce Websites
•  Mobile App Users

Cohort report for E-Commerce Website:

Cohort report or data is helpful in E-Commerce business to understand the data for all users that completed their first transaction during a specific time period. This particular data can be very useful to understand users buying or conversion pattern. 

It also helps in understanding users repeat rate, buying pattern or transactions happening during holiday seasons, or any special offer duration for E-Commerce websites. 

Cohort Report Explanation :

Cohort report basically consist three main sections :

• Report Setting
• Data over time graph
• Tabular Data 

Now it’s time to discuss about the Cohort report configuration.

There are four main choices that an data analysis need to make while creating a Cohort report.

Cohort Type : Right now there is only one type of cohort available in Google Analytics - Acquisition Date. Acquisition date in the cohort report is basically the date when user first time visited the site or logged in to app or we can say it’s the first day when a user started the first session.

Cohort Size : Cohort size is basically the time period for which you want to analyse your data for. Right now Google analytics provides three options :

Day Wise

Week Wise

Month Wise

Day Wise Cohort : It shows the daily user acquire data and shows pattern how many repeat user came back in next following days. This helps in day to day monitoring of user behaviour on the site.

Week Wise Cohort : If you choose a Cohort Size of a week then it means you want to see users whose acquisition date was within the same seven day period. 

Monthly Cohort : If you choose a Cohort Size of a month then it means you want to see users whose acquisition date was within the same month.

Metric : This is the actual data what you will in your chart or report. There are many metrics for which you can see the data :

User Retention 

Goals Completed

Page Views

Revenue

Sessions

Transactions

Date Range :  From the date range section you can choose the different date range from 7 Days, 14 Days, 21 Days or 30 Days.

So for example if you choose a cohort date range of last 7 days, and today is February 23, Google Analytics will look from Feb 16 to Feb 22 and align the data based on each user’s acquisition date. How Google Analytics would create the various ‘Days’ of data based on a user Acquisition date of Feb 22.

Day 0 = Feb 16

Day 1 = Feb 17

Day 2 = Feb 18

Day 3 = Feb 19

Day 4 = Feb 20

Day 5 = Feb 21

Day 6 = Feb 22

Day 7 = Feb 23

4

Note : In general we only 12 columns or days when we choose the analyse data according to days. But people get confused as why they don’t see 30 columns ? So if you closely look at the data, you will notice that there is not enough data from 13th or 14th days onwards. Still if you want to analyse data for a bigger date range you can choose Weekly Data or Monthly Data.

Which Cohorts should you choose?

• Ecommerce
• In App Purchase
• Publishers (Desktop & Mobile)
• Lead Generation 

I will be writing more about the different uses of Cohort Reports in coming posts. Till that time stay tuned.