A robust, data-driven ecommerce strategy has become ever more crucial to brands over the past decade as they try to navigate a market that is turning increasingly to digital channels.
In 2020, the Covid-19 pandemic accelerated trends in online retail even further – some say by as many as 4-6 years. During the peak of the first lockdown, ecommerce accounted for 32.8% of all UK retail, and has remained higher than pre-Covid levels throughout the rest of the year, despite most non-essential shops reopening for several months throughout the summer.
As a result, brands have had to reassess their strategies.
On day one of this year’s Econsultancy Live event, Econsultancy Research Manager, Rose Keen, spoke to Lyndsay Weir, Global Data and Analytics Manager at Nestlé, Andrew Hood, CEO at analytics consultancy Lynchpin and digital transformation consultant Pascal Moyon. They discussed the role of data for ecommerce brands during the pandemic, how data is shaping the future of the channel and some of the challenges marketers may face.
Data strategy fundamentals
“Quite a lot of strategies don’t really change because of a pandemic,” says Andrew Hood, “they just become far more important… when we have this level of disruption in the market then if you’re not on the front foot in understanding some of those changes, then it may be exposing some weaknesses in data strategy.”
In particular, Hood identifies leading indicators as having an especially important role as brands continue to tackle the ongoing effects of the coronavirus on their businesses. Understanding search demand and product interest can help organisations recognise the first signals of customer behaviour change.
Nestlé’s Lyndsay Weir sounds a note of caution about the scale of data collection: “We need to take a step back and look at what quality data we want to collect. I think it’s more important than ever to have the right strategy and to know what you want to unlock from it because the more data that’s coming, if you’re not set up for it, can really add confusion.”
Weir explains that the team at Nestlé has been working hard to establish the fundamentals of data collection and analysis, “because if we don’t have the right base to start with, whatever we’re going to build on top is destined to fall down.”
She outlines three key questions Nestlé hopes to answer from the data it is processing:
- What data do we need, how do we collect it and how do we activate it for our consumer journeys with our brand?
- What is the value of that data?
- Which tools do we need to activate that data?
“Without having these three core fundamentals to really understand and really bring capability in-house,” she concludes, “We’d struggle to accelerate faster in other areas.”
The Fundamentals of Marketing Measurement and Analytics
It is one thing to maintain a level of understanding of key data insights among senior members of a business, but it is entirely another to build a data-led culture across all levels of the business.
Moyon recognises that there’s often a disconnect between senior levels of an organisation and data analysts who therefore “need to understand data techniques… understand the business and… need to turn the data into compelling stories” which can be acted upon.
Weir concurs that instilling a data culture can often be quite a challenge for any business. She explains that one of the biggest changes she has tried to drive throughout her time at Nestlé so far “is the democratisation of data. So, where possible, ensuring that for their role everyone within the business can access the data they need to make decisions without having to go through hoops and hurdles and loops to obtain it. And where [it’s] also relevant, having access to the right teams to crunch that data for them.”
She suggests that once data becomes more widely understood, it becomes embedded in an organisation and starts being adopted across teams working on all manner of business operations.
The future challenges of data-driven strategy
So, what’s next for data-driven strategy? And in particular, what challenges may present themselves further down the line as data becomes more entrenched in ecommerce?
Weir believes that issues surrounding data privacy will come to the fore once again as more privacy legislation, such as the ePrivacy act, is enforced and consumers continue to be increasingly wary of the amount and kind of data they are giving to large companies.
“Too often I see the area of data, especially within marketing, and the function of privacy and legal being still operated in two very siloed functions… in the next two to three years… we’re going to find that perhaps what is being built within organisations, what’s been structured [and] the data that’s been gathered is not fit for the future.” As a result, she says it’s very likely that businesses that continue working in a disjointed manner will need to enact a mass reorganisation of data, not dissimilar to what was experienced when the EU’s GDPR legislation was passed.
To avoid this, she advises organisations to “have [their] marketers and [their] legal counterparts work together, build that framework of success and that… dual taskforce to ensure that what [they’re] doing is future focused…so that [they] don’t have to rewrite strategies every two or three years.”
Meanwhile, both Hood and Moyon agree that first party data will become more and more relevant for brands as they continue their data journeys.
“We’ve got a lot of curtailment of third-party data and that’s being curtailed by regulators, or by browsers taking matters into their own hands, so first-party data becomes far more important,” Hood explains, although he agrees that the increased reliance on such data could present some challenges as well.
Moyon describes first-party data, as “more of a blessing than a curse”.
“Far too often I see marketers trying to get third party data for a single job that is far less relevant to the data they had internally on the customer… there is probably too much focus on acquisition.
…This reduction of third-party data means marketing [will] understand much better what [they] can do to retain customers.”
2021 and beyond
Finally, the panelists outline what they think is the most important thing ecommerce brands should be considering in 2021 and beyond in terms of data strategy..
Lynchpin’s Andrew Hood: “I think [organisations] are going to need to reprioritise… what their use cases are and the clear identification of [these]: Are we using data to make money now?”
The NonAgency’s Pascal Moyon: “The rise of marketplaces. A few years ago… everything was coming through Google and search was really strong and now… about 65% of the [buying] journey starts from marketplaces.”
Nestlé’s Lyndsay Weir: “Analytics, but with the right foundations, the right structure of business use cases and the right opportunities to unlock within that.”