The Power of Data For Boosting the Success of eCommerce Business

The eCommerce industry is perhaps one of the most obvious examples of data dramatically making a difference to the success or failure of a business. Considering that this field can produce detailed insights into customer behavior, those businesses can then utilize that information to create more sought-after products, better sales funnels, and clearer eCommerce sites will thrive in this industry.

A whole market, known as data-driven marketing, has sprung out of the conjunction between eCommerce and data, with the power of data helping businesses to boost their chances of success. 

Let’s demonstrate exactly how eCommerce businesses use customer data.

Creating Actionable Insights

The first step before creating actionable insights is ensuring that all of your data is safely stored in a cloud data warehouse. Typically, these services will have a range of different security tools and structural functions that help you format, access, and run analysis on your data. 

Once all of your customer-generated data is in the database, you’re then able to run analysis more efficiently, ensuring a continual flow of user-based information. When dealing with analysis that is particularly intensive on your database, there is often a bottleneck in how quickly things can be done. However, by incorporating materialized views into your database, you’ll be able to effectively generate analysis. With these, you’ll have everything you need in place for creating your insights. 

An actionable insight is a pathway to action that you take after you analyze data. By collecting data, finding out the context of that data, and then working out what it’s telling you, you’re then able to make effective decisions across your business. For example, you may find that when you send a marketing email with a different tagline structure from your normal style, one of the two has a much higher percentage of openings and conversions.

With this considered, you can move your email campaigns toward using this structure, helping to increase the engagement of this marketing stream. Without data about opening rates, your business would never have been able to confirm which email tagline was the most effective.

In the above example, there is a certain relationship between data uncovered and what your business does with this knowledge. This point of tension is an actionable insight, with an insight into your own company data providing a plan of action to drive you towards future success.

How do I put my actionable insights to work?

Now we understand what these actionable insights could look like, let’s take a look at three examples of where they are most useful within an eCommerce business. Considering that eCommerce businesses are almost always customer-facing (selling products or services to a customer audience), most of these insights come from analysis of how your customers use and react to your product and its marketing streams.

One of the most widely applied uses of data within eCommerce businesses – and other sectors, too – is editing marketing campaigns based on customer data. This is the action of editing either how you communicate or what you communicate to your audience, further driving up the chance that they click on your advertisement and convert to a customer. 

This form of data-driven marketing can take a few forms:

  • A/B Testing
  • Editing Campaigns Based on Customer Data
  • Geographical Data Farming

Each of these can be best described with an example from real life, helping to contextualize just how data is used within marketing. 

A/B Testing

A/B testing is where a marketing team will run two parallel versions of something for their audience. For example, this could be a newsletter with two different titles for each version. Half of the audience will receive one, half will receive the other. From there, the marketing team collects data about how many people click on the newsletter when it comes into their inbox.

After running this test, they’ll know exactly which was more effective, even if there was only a slight change between the two. This is an extremely famous example of using data-driven marketing insights to then change campaigns, with the more successful tagline being used going forward and in further testing.

Even the tech giant Google has had its fair share of experience with A/B testing. Back in 2012, Google ran a shades of blue A/B test on their users, with every 2.5% of users getting a different shade of blue – totaling 40 shades. Google then recorded which shade of blue led to the most clicks, continually refining this until they found the most successful shade of blue.

Although a test like this seems completely ridiculous, this simple change from one blue hue to another generated $200 million in profit due to the additional clicks that it received. This is a direct representation of the power that subtle A/B testing can have, especially when eCommerce businesses are seeking to increase their engagement or boost conversion rates

Recent reports show that they’re currently running this experiment again, so be sure to keep an eye out for changing hues next time you surf the web!

This A/B testing can be run continuously on your home website pages. From testing out the copy on your front page to testing different product photos, this system will ensure that slowly, but systematically, the content on your pages becomes more and more optimized. Over time, this will help eCommerce businesses optimize their sales funnel, ensuring that their conversions are always as high as possible. 

Editing Campaigns Based on Customer Data

When running marketing campaigns, most of the time, companies take an A/B testing approach, looking at the data of a campaign after it has launched to develop a better understanding of what their customers respond to. While this is a completely valid and very potent way of increasing the effectiveness of marketing campaigns, there are also other ways to go about it.

Back in 2019, skincare brand Olay showed the world that doing intensive customer interest research before launching a campaign can have incredible results. Before creating their 2019 Superbowl commercial, they used customer data to work out what shared interests their customers had beyond skincare.

Surprisingly, the most common interest across their whole customer base was horror movies. Obviously, this is about the last thing you would connect with a skincare brand, which is why this data analysis strategy is so powerful – it goes where no human would naturally think of going. 

They produced a video that combined promoting their skincare with a horror movie-style commercial, which instantly went viral for its ingenuity. With this, not only had they targeted their audience, but the cleverness of their idea further promoted the brand with how viral the video went.

By using customer data analysis, Olay generated millions of dollars from their marketing campaign, getting free marketing from the amount of buzz that was generated around the project.

Geographical Data Farming

By preparing several different versions of a homepage and trailering them to certain geographical areas, eCommerce stores are able to boost the personalization of their pages and increase conversion rates.

A great example of this is within a clothing store. If I live in an incredibly hot climate, then when a wooly jumper pops up on the homepage of a clothing brand I visit online, it won’t be particularly interesting for me. However, if I use geographical targeting, my store would be able to present a different clothing item based on the average temperature of the area. 

With this, you’re able to increase the personalization of your page, making it more useful, and boosting engagement. Considering that 74% of customers feel frustrated when website content is not personalized to them, this is a surefire way of increasing the amount of interest that your pages generate. 

Any form of adaptation using customer data will directly accommodate your audience, helping you to create a site and system where users flock to your content as they know they’ll find exactly what they’re looking for. 

In eCommerce, personalization is key, and data analysis is how you create this personalized content. 

Final Thoughts

Data is one of the most effective tools that an eCommerce business has in its repertoire if they want to boost the success of their company. From making sure that every single marketing campaign they publish is a smash hit to continually optimizing their sales funnel with A/B testing, data is at the center of the very best of their business practices.

By turning to a stable data warehouse, you’ll have the system in place to then use your customers’ data whenever you need it, always knowing exactly where to go when you need to create actionable insights.