CEO at Whitebox, a company dedicated to being an end-to-end eCommerce technology partner to take products from factory floor to front door.
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There’s a reason data drives many business decisions: It’s often the most reliable road map. This past year marked a significant shift to e-commerce, which forced brands to respond nearly overnight. Data might not have been able to predict the seismic nature of that shift, but it’s been showing us signs of change for years.
From 2009 to 2019, e-commerce in the U.S. climbed steadily from 5.6% to 15.8% of retail sales, according to Digital Commerce 360. Then, in 2020, e-commerce jumped to 21% of the country’s retail sales. Some industry experts theorize the pandemic accelerated the shift to online by roughly five years.
Now that brands have navigated their first year in our new normal, they want to do more than just keep pace; they want to accelerate their growth. It’s clear that all of this recent change reflects an adjustment in priorities for consumers. And that means brands need to adjust their own priorities when it comes to consumer data.
Recognize the value of different data types.
One of the first things to understand is just how recent changes in consumer behavior impact brand strategy. And that, of course, goes back to the influence of the pandemic. With more brands reaching out directly to consumers, shoppers have even more choices than before.
This “omnichannel” effect — exploring across brand websites and online marketplaces — means brands need data that shows them the full scope of a customer’s journey, not just browsing or point of sale. Using marketing, sales and fulfillment data will give you the best representation of the consumer experience and help you develop the most effective strategies for your brand’s success.
• Find customers where they are. By knowing where your customers go, you know where to reach them with your marketing efforts. You’ll also have a better feel for how to set up, test and adjust your merchandising strategy, budget for ads and capitalize on numerous potential touch points along the way to a sale.
• Understand true profitability. It’s no longer enough to look at only the customer acquisition cost and advertising metrics. In direct-to-consumer and e-commerce overall, fulfillment represents the lion's share of the unit level costs that directly affect profitability. It’s vital to understand, by channel and by order, the fulfillment costs directly connected to the sales data.
• Examine acquisition efforts. Using cross-channel data tells you how your customers behave beyond a single purchase. Perhaps channel A is initially expensive for acquisition, but over time those same customers will purchase again on a more profitable channel.
• Predict brand engagement. Data related to where, how and what customers purchase can help inform future strategies for engagement and how best to upsell or retain a client regardless of the channel where they were initially acquired.
• Meet customer expectations. Like purchasing, fulfillment experiences differ across channels, and it’s useful to know what certain drivers might be. Customers have come to expect certain conveniences. Are you (or your third-party logistics provider) equipped to offer two-day or free shipping? What is your returns strategy? What are your postage and shipping costs, and how do they impact your marketing and sales strategies?
Use data for effective decision-making.
In my company, an end-to-end e-commerce technology provider, we navigate this kind of data regularly. But when other brands are introduced to the available breadth for the first time, they’re often amazed by the potential. Some become overwhelmed because how do you bring it all together and distill it down into a plan that translates into actual steps forward?
While it’s true you need the right data, the data is only as good as what you do with it. Decisions related to customers — where to find them, how to engage them, what it takes to convert them, etc. — seem somewhat straightforward given the right data picture. But you also need appropriate data to make corporate decisions, particularly in light of last year’s uncertainty.
Brands that were brick-and-mortar-heavy had to revise their strategies in the shift to e-commerce. Everything from marketing to logistics had to be revamped to accommodate best practices for digital. And in many cases, strategies had to change again when people realized this was not a temporary or supplemental shift and that e-commerce will be the primary business driver for the foreseeable future.
Even established e-commerce brands weren’t immune. Despite having mature strategies for exceptional consumer experiences, many brands still needed to make changes. Some found themselves at the mercy of Amazon with inventory restrictions that impacted availability to customers. Others have been impacted by challenger brands — nimble, data-focused companies that are steadily increasing their own market share. And most brands, if they looked at the data, would see they could make more money by diversifying their presence to reach a larger number of potential customers.
Moving forward, I believe the metrics associated with modern commerce will be the key to success. Having an understanding of how customers interact across your channels breaks you out of the prevailing silo mentality to give you a strategic edge. Looking at the data I've highlighted above can outline your customer’s journey to a single sale and how you can create the best experience in that journey as well as that customer’s lifetime value for your brand.
So, where do you start? History often repeats itself. Look at the range of data available to you, both past and present, to help you spot trends and make predictions. Look across marketing, sales and logistics, and if you use partners to support you in these areas, see what kind of data they can provide. Looking at the big picture helps you gain a competitive advantage. But it also ensures that when your every move is backed up with data, your brand stays on track and ready to move forward — even in the most unpredictable of times.
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