5 Reasons Why Data Management is Critical to eCommerce Business

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Written By Juliana Crain

Ecommerce data management plays a vital role in the retail experience for customers.

It has become a game-changing concept in business. Leaders like Amazon have shown that incorporating the right data-centric strategy can generate billions in profits. It has essentially disrupted the entire industry. 

Data is the foundation for creating a customer journey that delivers the best retail experience. It can be used in all areas of eCommerce business – from browsing online to social media engagement.

The problem is that everyone understands the importance of capturing data, but they drop the ball when it comes to properly manage it. That’s why we’re starting to see so many government regulations being put into place to force businesses to follow minimum practices. But even that’s not enough. 

The overall goal of data is to improve the entire customer journey. With that said, let’s look at some of the reasons why data is a critical component of eCommerce business

1. Identify Shopping Patterns

Proper eCommerce data management practices will allow businesses to understand every step of the customer journey. Brands understand precisely what it is that their customers want, and they use the entire journey to help address a specific pain point. 

Of course, data is also used to track a customer’s interaction with a website, which can be a compelling insight.

Amazon has perfected this. They will focus on marketing materials on consumers who are viewing specific content and buying specific items. 

2. Track Inventory Like a Pro

Properly managing inventory is a balancing act that must be done to perfection. Over-ordering is one of the biggest mistakes that I see with inventory management, and it will cut into the profits of a business. Manual tracking is why this happens because human error can creep into play. 

With that in mind, using a tracking database will eliminate this because there is less human interaction involved. An eCommerce data management system will keep track of inventory using barcodes and shows precisely what needs to be ordered.

Another added benefit is that it also accounts for seasonal demand and other metrics that might cause specific products to sell at a higher frequency during certain times. 

3. Segment Customers Using Ecommerce Data Management

When you learn how to identify search patterns, you can create advertising campaigns that will have an extremely high conversion rate. But to do this, you’ll need to segment your target market so that you can pinpoint your marketing to a specific segment.

The further you can narrow down the audience seeing an advertisement, the more likely it is to convert. 

There are many ways to segment customer lists. They can be sorted by gender, profession, income, or purchase history. The possibilities are endless. 

4. Deal with Inaccurate Information More Consistently

65 percent of returns made to Ecommerce shops are the result of errors caused by the company themselves rather than the customer. This just reinforces the fact that having accurate data is critical to long-term success.

Not only do returns cost money, but they will also cause a brand to lose trust with its customers. Even small data errors can lead to frustrating issues down the road. 

Having an eCommerce data management plan in place will identify mistakes in data and take corrective measures. 

5. Form Better Ecommerce Operations

Data helps businesses identify areas in their daily operations that might be inefficient. Inventory management was one example of this, but activities like shipping, supply chains, and distribution are all areas that data can improve upon. 

Most businesses are hemorrhaging profits from their operations, so this is a great way to get a handle on things. Understand where every penny is going and make sure you’re getting the most out of your time and resources. 

Five Ways that Data Management Drives Growth in Ecommerce

5 Reasons Why Data Management is Critical to eCommerce BusinessGrowth is the most crucial factor in business. It’s the goal of business, so brands must focus on data-driven growth. Here are some ways that eCommerce data management drives growth.  

1. Forecasting Demand of Certain Products

Don’t mistake demand forecasting with sales forecasting because they are not the same.

In Ecommerce, demand forecasting is one of the most powerful tools. It uses data to calculate when specific products will be in demand based on certain conditions.

Companies will use demand forecasting to determine how much inventory to have on-hand during a specified timeframe.

2. Identify Trends for Promotions

Ever wondered how companies like Amazon can always advertise the perfect products at the right time?

They collect and process data that forecast these trends, so they know about them well in advance. It’s so much more accurate than the traditional method of using intuition.

3. Analysis of Supply Chains

Profitability in retail is directly impacted by the sales chains being used to fulfill orders, so these supply chains must be monitored. Sometimes compatibility can wear off over time since both businesses are making changes to secure their interests.

Therefore, eCommerce businesses should use data to keep an eye of their suppliers. Sometimes it makes sense to move onto a different supply chain. 

4. Data Analytics Helps Merchandising

Merchandising in retail has become a huge deal, so using data to improve it has merits. We see leading brands finding the perfect means of creating merchandise around their products or services.

Data analytics will incorporate data models into your marketing strategies that reveal patterns, category analysis, and help optimize your website layout. 

5: Marketing Analytics is a GameChanger

Customer demands change daily, so having access to data on your ideal customer is essential to balancing out their needs versus the goals of your business.

It deepens customer insight and helps you optimize marketing to create more focused campaigns. 


Most data management companies will help optimize your Ecommerce data management plan so that your business is making the most of its data.

It’s a long journey for small companies but it’s worth the time and investment. Ecommerce retailers will improve their growth through improved forecasting and creating more segmented, focused customer profiles.

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