Practical Ecommerce

4 Ways Ecommerce Merchants Misuse Data

The use of customer data can help you make smarter decisions that can improve your store, enhance the shopper experience, and increase conversions. When used incorrectly, however, data can waste resources and alienate your visitors.

Below are four ways that ecommerce merchants commonly misuse data.

Collecting Unnecessary Data

Big Data analytics and reporting tools can put a lot of information in your hands, but that doesn’t mean you should collect and track every single metric. Hoarding data is time consuming and expensive. Don’t waste space and bandwidth collecting information that isn’t essential in your business.

Unnecessary data can create noise that slows down the analytics process. Gathering and analyzing information you don’t need can distract you from the metrics that matter.

Additionally, collecting too much data can create security headaches. Remember, the best defense against breaches is to not have data to steal in the first place. If you don’t need it, don’t collect it.

Additionally, collecting too much data can create security headaches. Remember, the best defense against breaches is to not have data to steal in the first place. If you don’t need it, don’t collect it.

Determine your store’s key performance indicators before collecting any information. A good way of doing this is to examine each metric and ask yourself whether it’s just “nice to know” or is something that you can actually act on. For instance, while it may be nice to know that a particular customer has a high Klout Score, that metric probably won’t do anything for your bottom line. It’s better to not bother with it.

Key metrics vary from one business to the next. For most ecommerce sites, the important metrics usually include conversion rate, traffic sources, and on-site browsing activities.

Using Data to Justify a Decision or Hypothesis

When it comes to data collection, many merchants fall into the confirmation bias trap, wherein they interpret the information to confirm their existing beliefs or to justify their decisions. Using data this way causes you to ignore information or results that aren’t in line with your beliefs, and could result in you missing opportunities.

Say a company has so much faith in its new marketing strategy that when website traffic improves, the staff deems the campaign a success without looking at the conversion or retention rates. If the staff had ignored initial biases and looked at the big picture instead, they could have identified flaws and found ways to correct them.

The key to addressing this is to have an open mind when interpreting information. This can be difficult, especially when you’re too close to your business. Consider a third-party specialist who can remain objective, to help make the right decisions.

Ignoring Qualitative Information

Numbers can produce many insights, but focusing solely on that data can create an incomplete view of your company. The best data strategies make use of both quantitative and qualitative information. Go beyond the numbers to get the pulse of your customers by collecting feedback through social interactions, customer service logs, surveys with open-ended questions, and more.

Numbers can produce many insights, but focusing solely on that data can create an incomplete view of your company. The best data strategies make use of both quantitative and qualitative information.

Qualitative information can complement and validate the hard numbers.

Creeping-out Shoppers

Most retailers do this inadvertently when they’re trying to customize the shopper experience. A certain amount of personalization can provide value and convenience to users, but you also have to draw the line between cool personalization and creepy.

For instance, sending emails with tailored product recommendations is a good way to increase conversions. But you have to be careful with how you execute it, so that you don’t appear too intrusive. The same goes for remarketing banner ads.

Jerry Jao
Jerry Jao
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Comments ( 2 )

  1. Dave May 27, 2014 Reply

    I think that very first point of “Collecting Unnecessary Data” is not a realistic point to be made.

    “Additionally, collecting too much data can create security headaches.
    Remember, the best defense against breaches is to not have data to
    steal in the first place. If you don’t need it, don’t collect it.”

    It is actually a lot less time-intensive and less costly to implement the tracking and collection at the beginning, even if you aren’t going to use it immediately. It’s ALWAYS nice to be able to ask a question about behavior or user interaction and be able to have that data that wasn’t at all important at time of implementation ready for you, and possibly far enough back to do a full analysis. Going back after implementing and spending time creating workarounds and new processes to capture data that you could have planned for is very costly, in terms of developer time and possible charges from the vendor. Whether you have your whole customer database open to security issues, or the same customer database with data on how they saw your site doesn’t really matter. Unless it’s a black hat in your industry that is the hacker, it’s just data to thieves. They are looking for PIN numbers, names, addresses, card numbers, and passwords… not traffic volumes and what pages people visited while they were there. Also, hiring a good analyst that doesn’t get confused at the sight of more than just your basic KPIs can also keep the whole analysis process from becoming a chore.

    • Jerry Jao May 27, 2014 Reply

      Dave, first, thanks for taking the time to provide such thoughtful feedback and also sharing your perspectives.

      You have great points here, esp on collecting data that is not needed. I’m a big believer of not following blindly on what everybody else is doing. In the era of “big data”, it’s difficult to say, “I don’t care about data”, but more importantly, I think we can all agree on that it’s better to “care about only data that matters”. Data collection & analytics can be very time consuming and expensive, therefore, it’s important to be clear on what will make a difference on the business at the end of the day.

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