Three ways for small retailers to maximize their data
Online retailers have the very distinct advantage of being able to access a wide array of data and metrics. They can identify customer interests by looking at purchase history, identify fast-moving items by tracking inventory trends and plan sales by studying the times at which customers are most active.
People create data all the time. In fact, American businessman Eric Schmidt once popularly said modern people create as much data in two days as they did between the dawn of man and 2003. That is a lot of information retailers can tap to improve their eCommerce operations significantly, regardless of whether they are a retail mega corporation or just a small online seller.
However, as Multichannel Merchant noted, data does not benefit merchants if they do not actively use and analyze it to make meaningful change. Here are three ways they can better utilize the information they collect to improve eCommerce operations:
1. Really get to know customers
One piece of wisdom merchants often learn about in business school is the 80/20 rule, which suggests that 80 percent of a seller’s business comes from 20 percent of its customers. These are the loyal patrons who have made a particular online store their go-to destination for all of their needs within a particular niche. By truly understanding these repeat customers, merchants will be in a better position to keep them happy and coming back in the future.
People are more than just transaction histories, Multichannel Merchant contributor JP Chauvet explained. There is so much information merchants can look at to better engage loyal patrons, such as the items on their online wish lists and interactions on social media. Merchants must know more than what people buy if they want to engage shoppers more successfully.
2. Manage inventory more effectively
One of the biggest disappointments online customers encounter is when a store is out of stock of a product they want to buy. At the same time, AllBusiness pointed out the challenge all merchants face – they do not want to be holding excess inventory in the off chance someone may want to buy an otherwise slow-moving product.
Fortunately, purchase data can help identify pertinent inventory trends that allow merchants to ride the fine line between going out of stock and having enough inventory to satisfy customer needs. Inventory management software can play a big role in this process.
3. Plan around external factors
Although there is truly no such thing as a “normal day” in the world of retail, there are some days that drive particular consumer actions. For example, more people may shop online in the winter to avoid the cold weather or during peak holiday seasons.
Data can be used to help merchants identify those anomalies and plan courses of action around them. For example, if a huge snowstorm is affecting a significant portion of retailers’ customer base, a retailer could offer free shipping to help shoppers beat the storm. “Merchants cannot control the weather, holidays and other special events, but they can plan around them to capitalize on opportunities,” Multichannel Merchant explained.
Retailers need to analyze all available data that will help them serve their customers more effectively in the long run.