Business intelligence for eCommerce is indispensable in the age of drop shipping, fierce marketplace competition, and the savvy User who daily gets bombarded by dozens of marketing campaigns in the comfort of their social media accounts.
While many smaller online shops still survive with dispersed data sources, like Google Analytics, Facebook BM, and other scattered sources of information stored in internal excel sheets, those with the ambition to outgrow their direct competitors quickly advance to adopting Business Intelligence tools for eCommerce.
In fact, every dollar invested in BI brings back an astounding 1000% ROI, even more so: $10.66 per each invested dollar. Quite a hefty argument that highlights the role of BI for commercial success, right?
Zoolatech specializes in custom eCommerce software development and we have witnessed how business intelligence tools for retail are capable of drastically improving results and turning a downward curve up into growth.
We have compiled a practical guide on eCommerce business intelligence that provides an empirically derived, in-depth summary of the subject.
Business Intelligence vs. Business Analytics vs. Competitive Intelligence
These terms are often confused but in fact, they are different. Let’s see how.
What is Business Intelligence?
Business Intelligence is a set of executive-level techniques, strategies, and tools that are designed to collect data from different sources and channels for further analysis, interpretation, and development of future business strategies.
BI is more general as compared to BA and includes data from many sources related to all facets of commerce, that goes beyond marketing.
What is Business Analytics?
Business analytics is a marketing technique that is designed to source, accumulate, and interpret data from specific sources to spot trends and prescribe future actions.
Business analytics is seen as a branch of Business Intelligence and is usually primarily associated with marketing indicators.
What is Competitive Intelligence?
Competitive Intelligence is a set of marketing activities that focus on the collection & interpretation of data about the competitive aspects of a specific segment, about the market trends and a specific market share and competitive positioning.
This type of research and analysis is external, not internal, like BI. It only concerns the facts, sentiment, and figures as relates to a market, competition, price positioning, and market share dynamics.
Importance of Business Intelligence Adoption for Bigger Online Stores
In commerce, as well as in personal life, people often fall prey to their limited life experiences.
Once you burn your finger, you don’t touch a boiling kettle anymore. But it costs you quite a bit to gain that wisdom. You don’t form reflexes unless you have experienced the negative outcomes of a certain situation. And let’s admit it, it takes time to make every possible mistake on your own.
In entrepreneurship, reading books and attending high-level conferences may provide exposure to a lot of use cases that enrich one’s background and may lead to avoided mistakes and improved performances. When you educate yourself this way or another and expose your brain to several other people's business models, you form the instincts and understanding of how to avoid trouble.
But what if you had a crystal ball warning you about the looming possibility of getting your finger burned?
This is what BI does in fact.
A properly connected and well-maintained business intelligence software for eCommerce will signal you about all the future dangers and reveal the causes of past mistakes. This way, you can build on your successes and minimize your disasters. You can get actionable insights from just following trends and capitalize on aspects yet unknown to your competitors.
eCommerce is a numbers game. Unless you nail your numbers, your chances of success are minuscule.
On the other hand, analysis paralysis is way too common for most entrepreneurs. It's too easy to get overwhelmed with data, especially if your data is all over the place, stored in excel, tools, domestic software, and 3rd party programs.
Specifically, it's hard for executive-level leaders, who have lots on their hands, and only a partial understanding of departmental nuances, to be able to form a holistic picture or helicopter view of the business out of bits and pieces.
This is why any online shop with over 10 thousand SKUs should consider developing a Business Intelligence module within their eCommerce website.
eCommerce in Focus: Benefits of Business Intelligence & Analytics
There are several benefits of BI adoption by an eCommerce business. Let's explore the most impactful of them.
- United data points from different sources that can be pulled into a single report. Some trends are seen only when related to a parallel set of data in the same report. Dependencies are possible between the staffing levels of customer service and a decreased average billing, for example. So you might have to combine purely HR data with sales figures for instance. BI can help spot those correlations in one report.
- Uniform setup of standard reporting. You need historical comparisons to see progression or deviation. Having a uniform setup of reports gets the team on the same page quickly. When looking at the same set of visual graphs, managers effortlessly start seeing peaks and valleys that otherwise could have gone unnoticed. Handover and onboarding are easier when the entire team knows what they are looking for and at.
- Marketing, SEO, emails, sales, purchasing, HR data combined. The omni-angle view of the business is great for all departments, as they see their contribution to the company's successes and failures.
- Helicopter view vs. granular analysis. With BI you can go as top-level or as granular with analytics as business requires you to. Seasonality and promotional planning are best planned on a yearly data review, while sudden drops in demand for a bestseller may be revealed by a close inspection only.
- Timely addressing of the errors in the business process. Most mistakes are reparable when addressed in a timely way. In many cases, a crisis is turned into an opportunity. When savvy eCommerce store owners find errors, not only do they rush to fix them, but they also rush to surpass their competitors in this regard, creating a USP.
- Opportunity to build on profitable business decisions. There are many good sportsmen around, but there are only a handful of champs out there. BI enables an online shop manager to spot peaks and successes quite early on and invest in further strengthening of such a positive influence factor.
- Fact-based decision making. You may have the best business instincts in the world, but chances are you are not your target audience. However well you may have studied your User Personas profiles, your assumptions about how things work or should work will interfere with your business decisions. When you employ as powerful a tool as BI in the process, you start considering making decisions that are carved in stone. You have facts to back up every step you take.
360-Degree Overview of Your eCommerce Store
Weakest Links vs High Performers
Keep an eye on your best performing segments, channels, campaigns, SKUs, categories, DOW (day of week), etc. There’s always space for improvement in well-performing categories.
Likewise, the worst performers might be negatively affecting your bottom line – so it’s time to determine whether they are worth the effort or you are better off discarding them altogether.
Focus on Advertising
Learn about your top traffic producer. Which one converts best? Which brings the high average billing buyers? Is there a campaign that boasts the best CTR, but then the lowest conversion ever and why?
Ads are a bloodline of the eCommerce business, so give them a good look to optimize your marketing expenses and efficiency.
Do users use the search function often? What are the most searched for terms? Is there a low conversion on one of the high-volume search items and why? Do visitors drop off at a certain stage of the conversion funnel for no obvious reason? Are they finding their way around the site or get lost and confused at some point with poor navigation?
Navigation through an online store can make it or break it for conversion, so ensure your software development company creates a seamless UX-friendly flow.
Loyalty on the Radar
Where did your most loyal clients come from? How do they search for items? What categories do they buy from? How do they react to upsells?
When deep-diving into your loyal customers, it’s worth remembering that attracting a new client is five times more expensive than retaining the old one.
Unpacking Pricing Strategy
When using business intelligence for retail stores, entrepreneurs find it useful to ask the following questions:
What’s your average billing and which category is responsible for it? Do you have a low-margin SKU that sells in the millions? Which channel brings the highest-price buyers? Is your competitive pricing tracker integrated with the eCommerce engine and BI tool?
Closer Look at SEO & Marketing
Business intelligence developers, like our pros in Zoolatech, usually pay attention to integrating all the SEO and marketing tools with the BI. Google Analytics, Google ads, Google tag manager, Facebook Business Manager, and other tools provide a wealth of data for interpretation and further optimization.
Finding the reasons behind your top-performing channels, campaigns, keywords, top videos, or articles in the blog may help build on the success of top performers.
Inventory Management on Steroids
Keeping your sales up is great but keeping your costs down is probably even more important in online sales. Finding cheaper suppliers, ensuring quicker or even same-day deliveries, and managing returns, are all pieces of the puzzle that should be optimized continuously.
As it integrates your inventory, warehouse management software with BI is as important as connecting it to competitive intelligence software solutions. Ideally, you will be able to combine two data sets from these sources for the best overview and successful supplier hunting.
Development of Custom eCommerce Solutions with a BI module
Business Intelligence software development is about creating an interface that pulls data from diverse sources and organizes it into visually comprehensive dashboards and scorecards for quick analysis.
If you decide to create your own in-house proprietary BI tool or if you need to integrate a selected tool with your eCommerce CMS – Zoolatech will gladly take on the challenge.
Our expert software developers who specialize in retail and eCommerce website development will provide free consultation on your specific case. Just drop us a line with your basic requirements and we will send our best offer in no time.
Mind you, Zoolatech has an extensive portfolio of expertise with eCommerce, so you are in safe hands here. As well, our dev team is based in Ukraine while management is Silicon Valley-based. So you are getting the best value-for-money here too.
Whether it's custom Business Intelligence engineering or ready-made BI tool implementation you’re looking for – we are ready to complete the mission within a reasonable budget and a record timeframe.
Let's get you ahead of the competition with powerful BI analytics!