Today, the world runs on data. The internet and related technologies allow businesses to collect and interpret more consumer and competitor data than ever.
Those who take advantage of data-driven decision-making (DDDM) have an edge, while those who neglect it fall behind.
Below, we’ll discuss why DDDM is essential, its benefits for career development, and how you can apply data-driven decision-making to your e-commerce business – even if you’re in the small business category.
Are you convinced you need a data analyst or similar professional to spearhead data-driven decision-making in your business? Learn what to look for in a core competencies resume so you can make the best hiring decision.
Is Data Important? Career Growth Says So
According to the U.S. Bureau of Labor Statistics, data scientists are in high demand. At 36 percent, job growth is “much faster than average” in this field, with more than 40,000 new job openings expected by 2031.
What is the reason for this rapid growth? “The field of data science has gained prominence because it enables organizations to process and interpret data efficiently. Leaders, in turn, use this data to make informed business decisions, drive growth, optimize spending, and push performance.”
Companies can leverage data to make decisions that solve problems, promote growth, and help them stay ahead of the competition. These benefits aren’t limited to one field, but DDDM is especially vital to the ever-changing e-commerce environment.
“Data-Driven” – What Does It Mean?
Above, we’ve described DDDM as using data to make informed decisions, but that seems a nebulous concept. Ecommerce writer Richard Lazazzera helps us look at it another way: “Without properly evaluating your product and niche idea, your choices will be random—and so will your chances of success.”
While experts admit that “sometimes it’s okay to follow your instincts,” DDDM will generally help you reach your business goals and enhance your bottom line.
The first step is to establish concrete goals for your business. Then, collect and analyze relevant data.
Your data falls into two general categories – qualitative and quantitative. Quantitative data are numbers-based. Qualitative data involves interviews, comments, and observations. A good data scientist must code this data coherently and systematically.
Is DDDM Sustainable for Small Businesses?
You may think that utilizing Big Data is only for big companies. In the past, doing so required specialized tools and highly paid-IT specialists. But that is no longer true. Business intelligence tools have become more affordable. They’ve also been developed so individuals can use them “without deep-rooted technical expertise.”
First, let’s consider free tools available to the smallest e-commerce businesses.
Free Tools for Small Businesses
Imagine you’ve just started your own small business. You’re selling handmade, print-on-demand, or retail items on Etsy, Shopify, Amazon, or a similar platform.
Whatever platform you use, they collect data that you can view and interpret for data-driven decisions. For example, you can view how many people visited your store and which pages they looked at.
If you have a stand-alone website, you can also see how long they spent on a page. If you market your goods on social media, you can look at engagement rates, comparing how one post or product performs alongside another.
Please look at the comments and reviews of products to obtain qualitative data. What do people like? What do they complain about? Focus on identifying niche pain points you can alleviate, but larger businesses ignore.
All of this information is available free of charge. Even if you’ve yet to make your first sale, you can begin using these tools to analyze what attracts attention, reactions, and clicks.
Scale as You Grow
As your business grows, you can scale your data analysis tools. Typically, social media providers and blog and website plugins offer premium subscriptions allowing access to more data and tools, building on what you’ve already been using. This is an excellent place to start when you recognize an expansion of your data needs.
As your e-commerce business grows, you may invest in specialized business intelligence software with enhanced abilities to ingest, store, analyze, and visualize your data.
Medium to large companies can further focus on DDDM by hiring a specialist or developing one within your marketing or product development team.
Data science is rapidly growing, with data-driven decision-making at its heart. Because of an ever-changing technological landscape, using qualitative and quantitative data to make decisions is especially vital to internet-based businesses, including e-commerce.
Depending on the size and stage of your business, various business intelligence tools are available to help you collect, sift, sort, and analyze data—these work for businesses of every size, from sole proprietorships to large corporations. As you see what works and what does not, you can shift your approach to hone in on your business goals.