By: Dan Radak
There used to be a time when individuals and companies could run their ecommerce business by relying on their experience and hunches to guide them. The competition was weaker both in number and expertise and all you needed was a good choice of the product(s) to succeed.
As years went by, the playing field got much more competitive, with more and more ecommerce stores being opened left and right, often bringing new weapons to the fight. In such a harsh environment, there is only one thing ecommerce owners can resort to and that is data. More precisely, the data-driven approach to making decisions, marketing their ecommerce store and keeping their customers satisfied.
In order to organize, analyze and then use the data, you need to first collect it. The good news is that this is easier to do in the world of ecommerce than anywhere else, for the simple reason that people leave all kinds of information when purchasing stuff online. For example, you can track their browsing and click behavior; their purchase history; the feedback that they leave in form of comments or even indirectly. You can even go outside of your actual ecommerce store and gather data from their social network profiles and the interactions they engage in online. If done properly, you will have an abundance of data to rely on.
Your data collection efforts will result in an ocean of data that you will have to organize before you can take the next step of analyzing it. There are a few ways in which you can go about this. For example, you can organize your insights according to their priority. Another way to go is to categorize the data you have collected depending on which aspect of your ecommerce business will most benefit from this data – pricing models, marketing, customer retention, etc. The important thing is to identify the data which you will be able to use so as not to waste time analyzing things that will mean nothing.
The days of data analysis teams who spend their entire working days crunching the numbers and identifying patterns that you can use are long behind us. Today, ecommerce businesses employ different types of analytics tools that provide the decision makers with applicable and useful insights. For example, various tools can use the data on clicks and purchases in order to identify times of the day when certain segments of the market purchase certain items. Or, these tools can use hue data sets to discover which market segments would best respond to certain types of marketing.
Making Data-Driven Decisions
Once actionable insight is gained from all this data, it is important to have the right people making the right decisions based on these insights. In large ecommerce companies, different C-suite people will be using these insights, from the CEO to the CIO and the CMO. If your ecommerce business is smaller or if you are the sole proprietor, you will need to know how to act on a number of different fronts once you receive these insights.
Why Data is the Future
There are a few reasons why this data-driven approach to ecommerce is the future. For one, the decisions are based on the actual, existing situation that is represented by data. This makes it much more likely that the decision-makers will make only those decisions that will help their business grow.
Another reason why data needs to become the main factor in making decisions is that it can be applied to pretty much every aspect of running an ecommerce business. For instance, proper data-based insight will allow the decision-makers to form their pricing model in the most successful way.
Data can also drive marketing efforts and even fringe aspects of it such as the ecommerce's blog. For instance, data can uncover how customers and potential customers react to cool WordPress themes you are considering for your ecommerce blog.
Furthermore, cybersecurity can also be bolstered by applying the data-based approach, as many big companies have started doing long time ago.
Last but definitely not the least with good data-driven practices, ecommerce owners might actually be able to predict certain trends that will happen in the future by analyzing past patterns. By doing this, they can get the upper hand and beat their competition before they even realize they are in a fight.
There are good reasons why the entire business world is clamoring about data, data analytics and data-driven business decision making. Ecommerce has already become a big part of this storyline and, in the future, it will only become more involved.
If you happen to be an owner of an ecommerce business, the sooner you get on the data bandwagon, the better you will be off.
Dan Radak is a marketing professional with ten years of experience. He is currently working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies. He is also a coauthor on several technology websites and regular contributor to Technivorz.