The digital shift is one of the most significant shifts that has provided a boom to the E-commerce companies.
According to a report in Euromonitor, online purchases of goods and services reached $6.8 trillion in 2019, more than double the amount spent in the year 2014.
Covid-19 has accelerated this ever increasing growth with many consumers experimenting with different digital channels and E-commerce websites while in isolation.
This trend has led to an increase in lots of data of the online consumers. E-commerce companies can make a difference in the market given proper utilization of the data.
But, we know every action has an equal and opposite reaction. Same is the case here, opportunities come with challenges. The challenge for all these E-commerce companies is: how to use this data?
There is a magic bullet namely business intelligence that could penetrate this challenge.
Here is everything you need to know about business intelligence in E-commerce business.
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What is E-commerce Business Intelligence?
In simple words, business intelligence leverages tools and services to convert the data into meaningful and actionable insights that helps organizations in devising strategies and taking business decisions and implementation of these tools and techniques by the eCommerce businesses is specifically called as business intelligence in eCommerce.
Let’s say, a food delivery company might use business intelligence to analyze data about from which locations they are receiving orders very frequently. The BI dashboard will point out those locations and further the company can devise strategies accordingly, like increasing the delivery boys in those particular locations etc.
Business Intelligence is a very broad term and a lot of components fall under this umbrella which aims at eCommerce development. The primary functions of BI helping eCommerce companies includes:
Business intelligence reporting is the process of assembling or collecting the data and then processing it through various tools to get the meaningful insights related to business and ultimately providing recommendation or suggestion regarding the business drift to the decision-makers of the business. Generating reports for massive amounts of data could be considered a hefty and tiring job if it is done by traditional approach (manually analyzing the data) and many great professionals may kneel before this job. Business intelligence reporting can seamlessly handle massive chunks of data and provide relevant information to the business quickly making the life of the managers easy.
- Online Analytical Processing (OLAP) :
OLAP is a robust technology used by many of the business intelligence applications out there. OLAP technology uses complex algorithms to perform complex analytical calculations. This function has the main role behind answering the question: “What happened?”. It is the base for many business applications like forecasting, financial reporting, data warehouse reporting to name a few.
It is the process in which collection of data from various sources happens. That data passes through some processing and insights about the future relevant to business are extracted after the whole process.
It is the process of comparing and contrasting the business processes, costs, budget, quality with the industry standards. Benchmarking enables companies to find where improvements are needed. It helps in setting up the prices and budget for the company according to the industry standards and improve the overall performance of the business.
Due to these robust functions Global Business intelligence has achieved $23.9 billion and it is expected to reach $33.3 billion by 2025.
Business Intelligence Vs Data Analytics
There is a very thin line between business intelligence and data analytics which sets them apart. Many times business intelligence and data analytics are used synonymously but there are few differences between them:
- Business intelligence has more focus towards decision-making. By performing various operations on data for example, visualization, BI focuses on operational efficiency by providing outputs which are used for better decision-making while on the other hand data analytics focuses more on converting the data into structured format by performing operations like cleaning, extract, transform & load (ETL) and making the data in understandable form.
- The perspective for business intelligence is looking backward, which means analyzing the past and present performances of the business and providing insights for better decision-making. On the other hand, data analytics has the perspective of looking forward, which means it places emphasis on the future. Data analytics perform various operations on the data in order to predict the future trends that can help organizations with taking big steps for the future.
- Business intelligence deals with warehoused data. A warehoused data is basically the integration of the data from multiple sources in a very structured way, which is further used for decision-making. On the other hand, data analytics deals with real-time and unstructured data which is not in a standard format and needs to integrate and bring down to standard form.
- Business intelligence as said before, deals with decision making so the typical users of BI are CEOs, CFOs, CIOs which are there in the organization for the decision-making purpose whereas the typical users of DA are data scientists and IT professionals which have the technical knowledge.
- BI and DA also differ in methods adoption. BI consists of methods like monitoring, dashboards, KPI reporting whereas DA consists of methods like data mining, text mining, simulations, quantitative analysis etc.
Why are E-commerce companies adopting BI?
With the growing number of online consumers day by day, the competition among the e-commerce companies is also becoming cut-throat. Each and every e-commerce business is leaving no stone unturned to capture the market share. This competition and urge to become the market leader are making the e-commerce businesses to implement BI in their businesses for:
- Better and accurate decision-making:
BI represents the data in a structured way with interpretation using the statistical facts which enables managers of eCommerce businesses to take calculated decisions rather than guessing and following the will. This decreases the overall risk because even small decisions have a big impact on well established organizations.
- Increase revenue:
Business intelligence helps in increasing the revenue by digging out the issues hampering the revenue of the company and also by highlighting the consumers’ buying behaviour, consumer purchasing experience etc.
- Operational efficiency:
Business intelligence uncovers various loopholes or quality issues which hampers the operations in the business leading to inefficient processes. By highlighting and eliminating the processes which might be slowing down the company’s overall operations, BI provides operational efficiency. As more will be the operational efficiency, more number of customers will be served better.
- Capturing the competitive advantage:
BI actually helps e-commerce companies in capturing the competitive advantage by providing efficient reports and benchmarking. It also helps the company to prepare a budget, setting up competitive prices of its products and services in the market.
- Generating streamlined reports:
BI enables e-commerce companies to generate streamlined reports like:
- Marketing reports: Analysis of PPC, SEO, conversion rate etc.
- Sales reports: Analysis of lead generation, revenue, P&L etc.
- Inventory reports: Analysis of the inventory by providing value information like where inventory is located, what is the inventory turnover ratio, how long it took to sell all the inventory etc.
- Product analysis:
With the implementation of Business intelligence eCommerce businesses can do the analysis of the characteristics of various trending products & services prevailing in the market. The business intelligence provides in-depth insights which helps the eCommerce businesses to make decisions for its own products and service enabling them to sustain in the market.
- Margin & trend analysis
This feature of business intelligence enables eCommerce companies to highlight the performance of each and every product or service channel-wise, location-wise, profitshare-wise to name a few. This helps eCommerce companies in devising strategies like which product needs more attention, how much emphasis should the company put on channels etc.
What is the future of eCommerce Business Intelligence?
BI has been consistently making the life of eCommerce businesses easy in such competitive times by helping them in taking fast and efficient strategic decisions. As the technology is getting better day by day, there would be a possibility that business intelligence would become self-sufficient with increasing features, compatibility, robustness and popularity. BI not only has helped the large multinational companies, but also has helped the small scaled eCommerce businesses in sustaining in the market.
There are many other trends which the eCommerce businesses should keep eye on:
Business intelligence tools will become more collaborative in the future, facilitating more teamwork. With collaborative business intelligence, people across eCommerce companies would be able to see, analyze and mutually discuss about the insights, trends that are going on in the business data. This will lead to a more collaborative approach and the eCommerce companies would become more data-centric.
- Integration with third party:
Third parties will be intervening more with business intelligence, leading to more exchange of data between different platforms, simplifying data processing and more in-depth insights.
- Machine learning:
With the advancement of ML & AI the business intelligence will provide more accurate future predictions and forecasting.
- Advancements in Networks:
As the technology will go on evolving, there will be advancement in computer networks, storages, communications and that would lead to increase in more generation & storage of large amounts of data, which will make business intelligence applications more efficient.
Top 10 business intelligence tools for E-commerce business
We have discussed a lot about eCommerce business intelligence: its features, how it can help eCommerce businesses etc. But now let us tell you what tools would enable eCommerce businesses to achieve all those benefits provided by BI. These tools are very powerful, robust and compatible which can allow eCommerce businesses to reduce cost, bringing relevant data together, generating actionable insights, generating KPI scorecards, performing data visualization to name a few. Let us walk you through some of these powerful tools.
- SAP BI: It is a platform that enables organizations to share the information across all the departments, offices, regions with ease. It enables reporting, data visualizations and also integration with powerpoint and excel for in-depth analysis.
- Domo: This is also one of the powerful cloud-based BI tools which enables businesses to integrate data from multiple sources and convert that data into live visualizations. It provides forecasting, collaboration and insights. It has a user-friendly interface and the user does not require technical expertise to use this software.
- Microsoft Power BI: It is a web-based business intelligence platform which is designed for business analytics. Microsoft power BI provides real-time business analytics by connecting it to the company’s database.
- MicroStrategy: It is a business intelligence platform which supports interactive dashboard, third-party charts, automated report distribution to name a few.
- Oracle BI: It is also one of the most powerful business intelligence platforms consisting of OLAP technology and supports predictive analytics, interactive dashboards, dynamic reporting and a lot more advanced features.
- Sisense: Sisense is a business intelligence, AI driven software that enables exploration of data and quick analysis. This BI platform gathers data from multiple sources and manages data integration, reporting, visualization.
- IBM Cognos Analytics: IBM Cognos analytics is a cloud-based analytical and business intelligence software which supports data interactions from multiple sources, interactive dashboards, data visualization.
- Qlik Sense: It is a business intelligence platform which combines data from various sources to one dataset. It is easy to use software and requires no technical knowledge for usage. However, technical consultants can perform advanced analysis using different programming languages like python.
- Clear Analytics: It is a business analytics tool which basically combines the data from various sources and imports all the data to MS-Excel. It is built specifically for the Microsoft excel to perform analysis on the excel.
- Dundas BI: It is a web-based business intelligence platform which supports reporting, data visualization. Some of its advanced features help professionals to perform the in-depth analysis of the data. This platform fits for all sizes of enterprise for analysis.
Business intelligence is a broad term which has a very long future ahead. With the advancement of the technology more features & trends will prevail in future. This term is ever evolving. Regardless to say, the eCommerce businesses need to always look out for the changes in business intelligence and keep their business updated with the advancements from time to time.