Business Intelligence in E-Commerce: These 3 Data Fails You Should Avoid

1. 3 Data Failures in E-Commerce and How Companies Avoid Them with Business Intelligence
2. Conclusion: Implementing a successful data strategy with Business Intelligence in E-commerce

The more software solutions you have in use in your company, the less meaningful decisions can be derived in isolation. According to a study by the product innovation platform Aras, three out of four companies do not fully exploit the potential of their data. Often, access to a consolidated data pool is simply lacking, as data is spread across different systems and data silos.

Yet, it is absolutely necessary to have data in order to make important decisions for the success of your business. This is also true in the e-commerce sector, where data constitutes a fundamental basis for retailers and brands to more quickly recognize new areas of action. This opens up new potentials, for example for customer communication, marketing, product portfolio or logistics.

To make data accessible for you, a business intelligence tool can help. This is especially relevant for e-commerce companies that want to make their transactional data transparent and evaluable and maximize the profitability of their business. BI tools bring together all relevant corporate data sources in one platform, thus establishing cross-departmental connections. Data analysis and visualization will aid you in data-driven decision-making and thereby business optimization.

In this article, we will show you which data failures you should watch out for and how the use of BI can help you avoid some mistakes. For this purpose, we present three successful company examples using a BI solution and demonstrate the benefits they derive from it. Furthermore, you will get to know which tools are particularly suitable to assist you with business intelligence in e-commerce.

3 Data Failures in E-Commerce and How Companies Avoid Them with Business Intelligence

On your way to a holistic data strategy and data-driven corporate culture, you may encounter several obstacles. We will show you what these are and how to overcome them in order not to jeopardize your profitability in the e-commerce business. As strategies for solutions, we will present three concrete business examples that rely on the BI tool minubo for successful operation. The Hamburg-based company minubo specializes in e-commerce applications and offers everything from data connection and linking to analysis and reporting.

Data Fail I: Data Availability: You lack a comprehensive transparency of your data

If you are active in e-commerce, then an online shop is usually not your only revenue driver. Typically there are additional channels such as POS, marketplaces or dropshipping, added. With a multitude of channels, it can become quite difficult to keep everything in sight and to manage the business as profitably and efficiently as possible. A mistake you should avoid is relying solely on the data of the individual channels and not putting them in relation. After all, it's not just about looking at the top line, but about knowing what's left in the end.

Comprehensive transparency can only be achieved if you bring together all relevant data from all your sales channels related to all business events (e.g. credits, discounts, returns or vouchers). Additionally, it's important to include all accruing costs (such as marketplace fees, storage, payment, fulfillment or return costs) and marketing expenditures in order to be able to evaluate your business based on the contribution margin III.

Solution approach of World of Sport: Success guarantor marketplace model

The multichannel and sporting goods retailer World of Sport offers its products via two branches, its own online shop, and three platforms: Zalando, Amazon and Intersport.de. With these many channels, it's not always easy to keep track of all the revenues and to manage the business as profitably and efficiently as possible. This is an experience also made by managing director Daniel Karwacki, who therefore decided to go for complete transparency and implement the business intelligence solution minubo last year. “Sometimes you have a gut feeling, which can be correct – but as I have seen after the introduction of minubo, this was not correct for many of our products. I was promptly taught otherwise with some articles where I thought they were doing well and we were making money.”, Daniel said.

Daniel uses minubo for a holistic view. In the BI tool, all relevant e-commerce data is consolidated and made available for analysis. With one click, Daniel gets to the detailed view of his range and thus gets an overview of his individual products on the different platforms up to the contribution margin level. Individual articles are quickly identified as offenders. Soccer shoes from a known sports brand, for example, show a negative contribution margin ratio of -2% on Zalando. In comparison: Amazon 11% and Intersport.de 8%. The reason for this is the different cost structures of the platforms. Due to the high granularity down to the variant level, Daniel was able to find out in minubo that for some articles even the color and / or size determine the profitability.

Through this comprehensive transparency, Daniel is able to make the right business decisions and manage his business profitably – regardless of whether by sales channel, brand, customer or product, by size or color. Since the introduction of minubo, World of Sport has completely changed its strategy: away from a wide range of goods, towards a smaller range with which the company really earns money. And according to Daniel, the best thing is: “We adjusted our strategy at the beginning of November and I can see the results and developments immediately. I don't have to wait until the end of the month, which is truly amazing”.

The complete success story of World of Sport can be found in this white paper.

Data Fail II: Data Competence: You lack unified KPIs

Perhaps you know this situation yourself: If we ask three employees of different roles in a company about their definition of turnover, different approaches to explanation are associated with this. For example, marketing is mainly looking at the turnover generated by a certain campaign (Value of goods in orders). Sales is concerned with what has actually been sold, i.e. the value of goods in sales less cancellations. And controlling looks at net revenue, i.e. less returns. In conclusion, the views are all different, yet they all talk about the same term. This way, internal values can hardly be compared and lead to the following challenges:

• lack of foundation for data-driven decisions
• incorrect estimation of results and developments
• time-consuming discussions about right and wrong

Approach by Bergzeit: Use of a standard for e-commerce metrics

As a leading online provider of mountain sports equipment in Europe, Bergzeit quickly identified a problem in the e-commerce business: not all employees are on the same page when it comes to metrics. “The currently competitive critical requirements of an organization-wide, data-driven working culture can often not be implemented. However, this is an integral building block of success”, finds Alexander Bednarz, Head of IT & BI at Bergzeit.

The goal of his team should be to facilitate access by all departments to the relevant data and metrics and to standardize them. “Our wish was for clean-up efforts to be largely self-reliant and ad-hoc”, says Alexander Bednarz. For more than a year now, Bergzeit has been using the BI tool minubo. This tool comes with a predefined and integrated data model, which includes more than 800 KPIs and 200 attributes from the world of e-commerce. A real gain for Bergzeit, as the company benefits from

• a inspiring buffet of KPIs: The data model provides (almost) all the KPIs and metrics needed by the various e-com departments-
• Best Practice: The data model was shaped by collaboration with more than 100 trading companies of all types and sizes.
• fact clarity: All departments work with the same data basis and speak the same language.
• Time saving: KPIs and logics do not have to be painstakingly developed themselves. The effort for analysis, modeling and implementation is eliminated.

The complete success story of Bergzeit can be found in this whitepaper.

Data Fail III: Access to data: You lack a data culture

Anyone who cannot rely on their data or access a relevant data basis makes decisions more quickly based on gut feeling. This is a mistake that should be avoided. A prerequisite for a company-wide data culture is a “data-driven mindset”. Only if management or yourself as a business leader live and breathe a data culture and take your colleagues along with you, can you prevent decisions from continuing to be made to the best of knowledge and belief.

In addition, employees should have access to all relevant data they need for questions concerning their daily work. Requests via a BI department are a detour and cost a lot of time. Often a successful data culture fails because of missing or complicated software that scares off employees from working with data. A data culture that is generally not present makes it harder to gain the motivation to work with data and to gain confidence in data.

Solution approach by ROSE Bikes: Data transparency for more success in e-commerce

The performance and lifestyle bike brand ROSE Bikes had a sales increase of 34% in 2021. A crucial factor of the retailer's success is its data-driven business culture. All employees can access the relevant data via self-service using the BI tool minubo. This creates a cross-departmental transparency of fields of action in which new campaigns, measures or actions can be tested flexibly and quickly according to the principle of “test, learn, build bigger”

This is also the approach for ROSE's Customer-First-Approach. The e-commerce player makes no distinction between online shop, branch or social media. Using a 360-degree view, the company determines the touchpoints and behavior of the customers. The BI solution minubo is a central tool for analyzing customer loyalty and customer behavior and thus making the customer journey within the organization more transparent. With these approaches, ROSE has sustainably optimized the customer experience:

• Based on the analysis of customer behavior before and after the purchase of a bicycle, ROSE can also offer suitable clothing and accessories individually and thus significantly increase the cross-selling potential.
• Thanks to the data transparency ROSE can identify up to 12% more subsequent purchases from bicycle customers and thus considerably improve their own forecasts and planning security.
• By depicting the entire journey from acquisition to order intake, ROSE can infer customer behavior up to the invoiced order.
• Through targeted customer segmentation the performance of individual newsletters was increased by up to 30%.

The complete success story from ROSE Bikes can be found in this whitepaper.

Conclusion: Implementing a successful data strategy with Business Intelligence in E-commerce

In order to better understand and utilize your e-commerce company's data, it makes sense to employ a BI tool. This will provide you with assistance on the path to more profitability across all departments. On our software rating platform OMR Reviews, you can find over 50 BI tools in the business intelligence category that will support you in making data-driven decisions. One of them comes from the Hamburg company minubo, which specializes in e-commerce applications. You're only succeeding in a data-driven work when you no longer work in isolation with the data from all the channels and software you use. With Business Intelligence, you get a comprehensive insight into your data and can thereby make important business decisions and manage your sales, marketing or product business profitably. When you opt for a BI solution that also directly includes a data model and thus predefined metrics, your data cannot contradict each other. One of the key prerequisites to successfully work with data is a company-wide data culture. An intuitively usable BI tool like minubo can help employees to easily and quickly access the relevant data in self-service in order to make data-based decisions. The success stories of the companies described show that understanding and proper use of data in e-commerce has become indispensable. Business intelligence is a key success factor and therefore an integral part of a company's tool landscape.