The Essential Ingredient For Ecommerce Leaders To Lead, But Too Much Of It Hinders Growth
Ecommerce professionals face a tsunami-sized flood of data to make decisions. In today’s intensely competitive digital world, the decisions made by ecommerce professionals can significantly impact the growth of their business and their ability to outperform competitors. As we all know, data-driven decisions are the gold standard for ensuring success, but while data is here to help, it is actually getting in the way, and right now the crux of the issue lies in the sheer volume of data that is readily available.
The sheer magnitude of data that ecommerce professionals must sift through in order to make well-informed decisions is more than the number of books in the entire British library. They rely on web analytics to understand website performance, customer data for insights into people’s preferences and needs, sales data for evaluating product performance, and then social media analytics to track customer engagement and any commercial traction and best in class content. Additionally, market research provides context on industry trends, while email marketing, product data, and advertising data offer valuable information for refining marketing strategies, managing inventory, and optimizing advertising efforts. Ecommerce leaders often have lengthy meetings discussing reports, sometimes up to 20 pages long, that inevitably obscure crucial insights and trends that are essential for decision making. Frankly speaking, this uncontrollable flood of data would overwhelm any human being.
Humans have a limited capacity to process data. Research has shown that when inundated with an unmanageable deluge of information, we tend to feel stressed. Our cognitive systems default to habits that hinder our decision-making abilities, preventing us from using the most reliable evidence at our disposal, ultimately leading to compromised performance and missed opportunities.
There’s hope, though. Based on interviews with ecommerce leaders like Clare Kelly from Sass & Belle, Mark Morley from Prep Kitchen, Ryan Clarke from StatSports and Gareth Johnson from Overclockers UK, it was clear that data is a cornerstone for ecommerce leaders to succeed, but you need to put in some effort to get it right to drive value. Until we get platforms that automatically sort and prioritize the data that we need to pay attention to, there are manual things that you can do to address the problem.
1. Prioritize relevant information and insights aligned with your business objectives. Avoid drowning in a sea of data by working with your team to pinpoint metrics crucial for success, then concentrate on gathering and analyzing only those key metrics.
2. Present data in a clear and concise format. Data reports must emphasize key insights, trends, and actionable recommendations for improvement. Begin to use data stories to understand complex datasets better and then quickly identify important patterns.
3. Utilize relevant benchmarks: Gauge your performance against industry standards and best practices to identify improvement areas and make data-driven decisions.
4. Leverage predictive analytics to stay ahead of the competition by anticipating future trends, seizing opportunities, and mitigating threats.
5. Build a suitable cadence for data to stay updated on trends and insights for informed decision-making.
Developing this can take time, but you’ll see the benefits when you do.
Analyzing your online store(s) will become effortless, enabling you to assess the impact of particular initiatives, campaigns and tactics and the effectiveness of the agencies you have hired to help you grow. You will be able to identify areas where substantial revenues are being missed and formulate strategies to outperform your competitors.
The success of an ecommerce business depends heavily on this effective use of data. While too much data can hinder progress, focusing on the steps outlined above will empower you to make data-informed decisions that will drive growth, improve performance and help digital businesses reach the growth targets they have set out.
Smart leaders will address this problem sooner rather than later.
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