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Level 4

How Small Data Drives Ecommerce ROI

The power-packed metrics that will have a big impact on your bottom line.

How Small Data Drives Ecommerce ROI How Small Data Drives Ecommerce ROI

Data is a hot topic lately. If you sell online, you know that order information from your marketplace stores enables the massive big data feeds of Amazon and the like to predict broad consumer behavior and seasonality, manage prices and fees across the channel, and control their interests in the inventory and fulfillment industries globally. While you’re powering someone else’s data, it also seems like every day you’re told to climb aboard the big data bandwagon where you, too, can ride into the sunset of freedom and happiness of higher sales, profit, and success.


But when it comes to practical application of collecting data and understanding the insights they offer, you draw a blank. You’re not alone. Turns out, 94% of companies across all levels have experienced internal challenges when trying to improve their data quality. One could theorize that this dissatisfaction may stem from sheer size and that big data has just become too big. Case in point: The fact is, every second of every day we create new data. To understand the scale, 40,000 Google search queries are performed every second, which makes it 3.5 billion searches per day and 1.2 trillion searches per year. Each of those, at a minimum, creates new keyword and search ranking data. On a more relevant note, while it’s wonderful that Amazon has 304 million active customer accounts worldwide, what can you learn about tapping into that fire hose, or more specifically, why does your store suddenly and inexplicable have a following from Stanley, Idaho?

Sure, there’s plenty to learn from the e-commerce industry at large, but i believe the most valuable data for e-commerce SMBs is in the small game. The most valuable and actionable insights come from examining the metrics of your individual sales channels and your online retail business as a whole. For maximum impact, i recommend focusing on three specific areas.


Multichannel Metrics
Realists among us know that there’s no competing against Amazon. Your best hope of making any money in online retail is to sell on multiple channels simultaneously, Amazon included. But unless you have a way to view your sales data on each store, and also together as a group, the financial health of your business gets lost in the shuffle. When selling on multiple channels, your key metrics are:


  • total average order value
  • collectible average order value
  • delivered average order value
  • average order profit
  • total sales by channel


Comparing these metrics for the whole business and each channel individually will allow you to effectively pivot and scale how and where you sell. Talk about small data having an impact.


Through no fault of your own, you may find it hard to get to know your online customers. They’re not walking through a physical door every day and there’s no face-to-face greeting to facilitate the sales process. Yet every day you hear how crucial it is to identify the “whales” that make your business the most successful, then personalize every aspect of the online sale. Your biggest competition has somehow figured it out, so you’d better get on it. To stand out from the masses, the key metrics to follow are:


  • returning vs new customers
  • contribution amount by customer
  • customer lifetime value
  • top customers by lifetime contribution or profit


Learn these small data details and you’ll know plenty about the buying habits of your VIP online customers and how to make them happy.


Nobody told you that inventory management and control across channels was going to be such a massive headache. Taking steps to reduce chaos around your products will no doubt put you in a better mood, but learning some essential bits of small data, like exactly what products make you the most money or cost you the least to fulfill, can actually affect the profitability of your business as a whole. 


Anyone selling anything online should know:


  • The gross profit of each item and which ones are the winners
  • When you need to reorder inventory
  • The cumulative contribution a particular item provides


These metrics will go a long way to increasing profits and running a more efficient e-commerce business, thus sending your mood into another stratosphere.



Take comfort in the fact that 97% of U.S. businesses are looking to achieve a complete view of their customer, and likely every other aspect of their business, but know that it’s just a matter of time before the competition figures it out. Seize the strategic opportunities offered by small data and win the sale.

3 Comments 3
Not applicable

How Small Data Drives Ecommerce ROI

@Shahji, this is great!! Thank you to you, @DustinT and your team for always providing awesome information to users. 


From what I've learned, one of the biggest challenges preventing small businesses from leveraging data (big or small) is accessibility. This comes in two parts: (1) what tool to use and how to use it and (2) an easy way to discern the data to make smart decisions. Without understanding, and especially amidst the internet of things where it's information overload, new technology adopters may feel quickly overwhelmed. 


For folks who are thinking about starting the journey to incorporate data into their business planning, what do you think is an essential first step? How does one become comfortable and confident leveraging data? 

Level 4

How Small Data Drives Ecommerce ROI

Hi @Anonymous ,


Thank you for appreciating. There are many BI software providers in the market which are not only simple to understand but also provide extensive reports which can turnaround your business. The First step what i feel is people should start thinking about capturing the data in a standardized format. What people struggle with most of the time is data being spread in multiple areas which will make any analytic software in-efficient.  Also software's like Unify which act as a middleman between Online stores and QuickBooks  prove to be a great resource of the Data which the sellers are requiring.

Not applicable

How Small Data Drives Ecommerce ROI

@Shahji, we always appreciate hearing from you. 


That's a good point, but even the term "standardized format" might go over some folk's heads. Most QuickBooks users are a tech-saavy bunch. Still, I am thinking about folks who aren't or don't have the resources (namely time) to get organized and know what formats are available. 


The lowest barrier to entry for many folks is Google Analytics since most are already in the ecosystem. Even that has a bit of a learning curve. Again, thinking of folks who "just want the answer," parsing through and determining which key datapoints are worth examining is a big lift. 


Not at all a critique of your point @Shahji, you are absolutely right. I am just thinking publically about if and how we can create messaging around this sort of organizational practice: the basic formats available and the advantages of each. 

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