Data Overload: Retailers Are Being Crippled By Huge Volumes Of Data

0aaaMichiel Schipperus Sana Commerce

The conversation around data strategies erupted alongside the evolution of e-Commerce in the 1990s. Since then, businesses have continually tried to address data strategy gaps and challenges — with widely varying levels of success.

As early as 2011, it was estimated that a retailer with a strong data-centric e-Commerce strategy could increase its operating margin by more than 60%. By 2015, data was well-established as a critical factor in e-Commerce success. Still, that year, only half of retailers were leveraging a data-centric e-Commerce approach. One-third felt they reaped no benefits from doing so. This tells us is, not that data-centricity doesn’t work, but that many retailers were — and still are — getting it wrong.

Take Sears for example.


Sears was an early adopter of e-Commerce and omnichannel sales: a move that should have skyrocketed the brand to the forefront of e-Commerce success. But Sears’ digital strategy was based on winning the race toward online sales, not on leveraging data-driven insights. Their failure to take strategic steps toward innovation meant that they were pushing the online sale before their customers were even fully ready to purchase online.  Fervent online innovation without a value proposition contributed to Sears’ steadily falling online sales revenue.

Sears’ e-Commerce decline is just one among a multitude of cautionary tales, and as technology allows us to gather even more data than we’ve known possible, the list of e-Commerce failures is bound to grow.

On the contrary, market leaders like Amazon and Walmart have built their multi-billion-dollar empires on data centricity. They improve upon their products and services based directly on behavioral data and customer feedback. In the last year, Walmart has leveraged key customer data to inform improvements to their mobile app, fulfillment strategies and e-Commerce experience. The company also has used it to inform its advertising, resulting in a 50% growth in online sales in a single quarter.

Clearly, data centricity can very much be a road to unrivaled marketplace success. But rather than seeing more businesses following in Walmart’s footsteps and making big strides toward using their data better, more businesses are simply claiming to prioritize data centricity.

Data Centricity: Still All Talk, Little Action

When it comes to data strategies, many retailers say that they want to be a more data-driven organization but can’t get there. One reason is that they are overwhelmed by the data they are collecting and cannot act on it. Up to 28% of organizations are challenged by the sheer volume of data being gathered, according to a recent survey of 550 global businesses. Another 17% feel that they have plenty of data — but no insight into the specific data they need to inform decisions — and are struggling to separate the actionable insights from the noise.

But for many brands, this has unfortunately led to an approach where rather than sift through the tremendous amount of data they have to find the analytics that matter, they simply aren’t bothering to use their data at all.

According to our 2018 research, for more than half of businesses, customer and behavioral data is not being used to support and manage key business drivers. Retailers have — but are squandering — insight into what their buyers want, what they are doing and how they want to interact with their brand.

Retailers Must Try, Try And Try Again

How can they begin to really tackle the issue?

It begins with developing a data-driven culture that trickles down from the CEO. From there, companies need to assess their data strategies and understand what goals they are seeking to accomplish and how they can use data to meet those goals. Potentially every organization could use data differently. A smaller retailer might use data simply to market their products online and to inform the products they are selling. For larger retailers, with thousands of products and multiple stores, this might be too rudimentary.

Next, retailers need to assess whether they have access to the data they need.  Retailers collect potentially hundreds of thousands of data points, but are they collecting the right data? And, if they don’t have it, where can they get it? With mounting government regulation over data collection policies growing, all companies need to assess the benefit to the organization of the data they are collecting.

Finally, what is the strategy to make that data actionable? Simply, what good is that data if you cannot use it? One of the biggest data challenges companies have is making data actionable, sometimes because the data is siloed and other times because the company lacks the resources. Access to the data is just as important as collection of the data.  From here, companies can build an effective strategy upon which to build a data strategy. 


Michiel Schipperus is the CEO and Managing Partner of Sana Commerce. He has worked in e-Commerce since 1999 when he joined ISM eCompany, where the concept for Sana Commerce originated. Over the years, Schipperus consulted many distributors and manufacturers on how to successfully setup an online sales channel. The lessons learned from more than 100 B2B e-Commerce cases were used to develop the Sana Commerce product. Together with the whole team at Sana Commerce, it is his mission to show distribution businesses and manufacturers that the road to online success is shorter than they think.

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