How to drive growth in eCommerce with data is the first episode of Woolman Commerce Insights Podcast. In this 12 minute value-packed episode, Growth lead expert Mikko Rekola shares the importance of understanding data thoroughly and talks you through the metrics that are crucial to your D2C business. Mikko discusses recurring issues that merchants are facing when trying to understand multiple sources of data on a variety of platforms. He also sheds light to solutions that allow data to be combined to one UI to assist in interpreting data for business growth.
Listen to the Woolman's podcast or read the transcript down here below:
Host (Jacinda): Welcome to an episode of the Commerce Insights With Woolman podcast. I'm here today with Woolman’s Growth lead expert Mikko Rekola to talk about how to drive commerce growth with data. Welcome, Mikko.
Mikko: Thank you. Good to be here.
Host (Jacinda): Mikko. Can you tell us which are the sources the modern D2C brand gathers its data?
Mikko: Good question Jacinda. It depends case by case. For the majority of our customers, it's Shopify Plus or multiple Shopify Plus stores. Typically, that's then combined with Google Analytics, then you in most cases, get your data also from Google ads, Facebook ads, in some cases, , or other marketing platforms. So you have various data sources, and that's actually part of the issue.
Host (Jacinda): So what are the key metrics for success in eCommerce compared to brick and mortar then?
Mikko: Awesome. Love the question. So, by default, D2C eCommerce is very similar to basic brick and mortar commerce in that to sell, you need many good quality customers and out of those quite many that are purchasing. However, in the D2C environment, you're probably focusing on certain metrics more, in comparison to eCommerce in general. Such as customer acquisition costs. You want to know how much it costs you to acquire one customer, especially if you're doing a scaling up case, and you're growing . So it's very important to understand that. That's typically also combined with certain other key metrics such as customer lifetime value, purchase frequency, and stuff like that.
So those are pretty much the key KPIs you want to focus on. And then in some businesses, you're also willing to focus on other metrics depending on your business case, for example; am I selling an item that was purchased just once? Or am I selling an item that is easy to be replenished? Or am I selling a service that is somehow combined with this? So it depends on the business concept. Therefore, the KPIs are also depending on the case.
Host (Jacinda): And why are these important to focus on?
Mikko: So these are so vital that if you don't know your own figures, you can't understand how to steer the business; where am I coming from and where am I going? You need to understand the big picture. For that, you need to know which KPIs you should follow, which one of the teams is keeping track on a weekly, monthly, and daily basis. If your figures are off, then you immediately understand where you should focus based on data and what you should do differently. So it sort of guides your whole work.
What we have seen in multiple D2C cases is that the issue is time management. Those teams are working with very scarce resources. A practical example is that if you open a brick and mortar location, you most likely get 12, 15, or 30 people on board, and when you're running a D2C case with similar revenue, that's done in many European countries with few individuals. They have great responsibility, lots of work and they need to know where they should focus on a daily, weekly, monthly basis. It's tough, you have lots of data from various sources. People want you to join all sorts of meetings. They are really struggling with the question “how should I plan my schedule?”
Host (Jacinda): It sounds like there's a big problem when it comes to dealing with data. But are there any good solutions for this?
Mikko: Yep, there are so many problems. So the main problem is that they arise all over the place. Our merchants have 3, 5, 7, even 11 sources of data and they are collecting them to multiple different places. A typical case example would be that a merchant has multiple Shopify Plus stores, they use Shopify analytics, then they also have Google Analytics. Then in most cases, you also have different kinds of Excel sheets, which you're then emailing to team members and all sorts of people who are involved. You do manual calculations there, you even have a piece of paper and pen where you do some manual calculating and throw it to excel and then you try to combine it. If you are a serious business, then you might be using Power BI or Tabular, which are amazing software's, but they are not fit for Direct-to-consumer, they are meant for running a big corporate business, looking at the big picture, more for CFOs CEO 's and that sort of people, but not for hands on eCommerce in D2C. So the tools are not right, data is everywhere and what we really struggle with is that not all personnel have the access to data.
I've seen way too many examples, where there is just one person who is responsible for the data, the data guy, but if the data guy gets sick, then no one has the access to data. Even the CEO doesn't know the data. It's also tough that they don't understand the data. Data might be in such a form that they don't really understand what it means. Google Analytics is pulling this data and then Facebook ads are showing this data, Power BI is showing the third thing, so it's very tough, it's confusing. What this all sums up to is “I don't really understand how I'm doing, I don't know where I should focus.” There is lots of confusion there.
Some of our clients have solved this with certain ways, for example, Google Data Studio Sheets and they try to do it there but then they are struggling with the fact that data isn't right, it might load for three to five minutes and I have to say that that's not 2021. That's horrible. You don't understand what you're trying to manage. So what we started doing is to notice the issue. There is a huge issue with data for D2C brands, for the ones that are willing to scale up and grow. The employees who are really trying to do their best cannot survive with current data. So the biggest hurdle is not the product, not the service, not the store, but its data.
What we have been developing and starting with, first of all with our customers, is Insights with Ellis. It is sort of a service that sums up data from all of these various sources, whether it's Shopify Plus, Shopify, POS, Facebook ads, Google Ads, Klaviyo, all of these sources, the data will be immersed into one. There is a very clear view on all of the key matters. It will also show you insights, where should you focus on, what's going wrong in my store, again, a practical example; I had a client last week and they had an issue, which they didn't even know existed. They had 15,000 visitors on one single product card and the merchant couldn't notice. That's a very powerful example that there's lots happening at the customer store, and they don't have the time to track it. It's not a job for a human being. It's a job for a machine.
We are aiming at helping with all the data, providing those insights and matters such as; where you should really focus as a D2C merchant, what to fix, why something is happening and that kind of a practical approach, so that they can better plan their days and weeks and really do decisions that are essential part of growth and running a business. I know that the goal is high, but so are our targets as well, because we notice how much D2C merchants are struggling. What we want to do is that with our solution, is that you can go back. So we are tracking the data from the past, we have our own data warehouse. We are able to do all sorts of estimations for the future so that you have a clear track of where you’re heading, and how your business is doing. You can compare customers, products, all that kind of stuff and everything is in a very easy and simple manner. It has to be as easy to use as Shopify's own analytics. If you want, you can do drills, you can go very deep in the data or look at one single customer or one single product and do a comparison there. That is combined with AI and machine learning, sounds good eh?
Host (Jacinda): Sounds revolutionary, what has been the feedback you've been getting from the customers?
Mikko: So we are in a very early beta phase. So far, the feedback has been really good. They have pointed out their main issues with their business. We have gotten a really honest discussion that “I'm struggling with the data”, and quite many don't even realise how much they are struggling with the data before we have the talk and look at the situation. They understand that eCommerce is like a thermometer, it's very accurate. It's like you put that in the water and immediately if there are weak signals or something is changing, the merchant should be aware of that. In most cases, they are not. They notice that change after weeks, months or even years after that change has happened. It can be that there's less demand for their product or it can be that they have a traffic spike on a single product page, there is something going on in the store. In the physical life, the merchant understands because they can see the customers but in eCommerce they don't. So definitely, we need to analyse the data to provide them the best possible insights to grow.
Host (Jacinda): You have presented lots of information for us. But what are some of the key takeaways a merchant can get from this?
Mikko: So first of all, you have to stop yourself and understand where am I currently gathering data, which are my sources, my team - who is involved, what are they doing? What's their responsibilities? What do they want to achieve with the data? Then try to understand what are your pain points, what are currently the blind spots which you can't access, or if you're struggling somewhere, then sort of put a red marker there. Hopefully very soon we can help you with all this and really wish that you will like the solution.
Host (Jacinda): You sound very passionate about this. What is your dream then to learn about the data?
Mikko: My dream is to make sure that D2C is not just the past, it's the present, but is closely the future, that we can help our D2C brands to make better decisions. They can grow, and they can see that D2C is here to stay. We really want to help them to succeed, as this is a completely new way of doing business
Host (Jacinda): Do you have any final words for our listeners?
Mikko: Absolutely. Would be nice to hear from all of you. If you have any questions, any feedback, don't hesitate to ask us. We'd love to have honest feedback from all of the D2C merchants across the globe. So just ask us and we are here to answer.
Host (Jacinda): Thank you so much for being here with us today. Thank you to our listeners, and we'll see you next time. Bye for now.
Which metrics are crucial for your eCommerce growth?