D2C e‑commerce and data science today

D2C e-commerce and data science today

Seb Harris

6 minute read06 Oct 2021

Welcome to the Data Files, a series of articles discussing data science and the future of D2C e-commerce.

In this first edition we’re surveying the state of the e-commerce landscape today, considering the role the pandemic has played (and continues to play) in moulding that landscape and explaining how data science is the answer to the new challenges businesses face.

And for more of our thoughts on data science in e-commerce check out our article on the difference between data-driven and data-informed e-commerce decisions.

D2C e-commerce today

Since the start of worldwide lockdowns circa March 2020 e-commerce sales have sky-rocketed. The industry had grown steadily for the previous decade or more but with hundreds of millions of people recently confined to their homes around the globe, it doesn’t take much to work out why there’s been such an increase.

Shopify reported that in the first quarter of 2020, when lockdowns came into place across the globe, there was 10 years’ worth of growth in a 3 month period. But beneath the headlines and the social shares, what do these astronomical figures mean? From a business point of view, what does the e-commerce landscape look like today?

Well there’s good news and bad news.

The good news

Quite simply, there are more customers online today than at any point in history. For obvious reasons we’ve all spent more time online and less time in physical stores since the start of last year. Some of us will have discovered online shopping for the first time and now perhaps can’t get enough. Others may still feel uncomfortable at the prospect of returning to physical stores, and may even never visit a physical store again.

In short, it’s a great time to get into e-commerce. The trend is only set to continue and whilst it’ll be some years still before another country joins China and records a majority of national sales being performed online, it’s sure to happen at some point.

The bad news

With the surge in e-commerce sales over the past 18 months, more brands than ever before have turned their attention online. Those that were previously physical-retail focused have seen their stores locked down and their customers stay at home, forcing them to either adapt or risk going under. Simultaneously, brands that already had an online presence have updated and optimised their stores to make sure they keep hold of their market share.

So not only are there more competitors on the market but the standard of e-commerce stores has increased. Sure, there are more customers out there but it’s more difficult for them to find you in this overcrowded, hypercompetitive market. If they do eventually find you their expectations of store performance and user experience are at an all time high, so your store better be up to standard.

It’s vital that your D2C business is at the top of its game. A high-performance e-commerce platform, guided by a precise growth strategy, is essential if you want to stand out from the rest and take advantage of the surge in online shoppers.

What’s the solution?

Data science is the not-so-secret tool you need to build a high-performance platform and e-commerce growth strategy to take your business to the next level.

Not-so-secret because data’s influence on the modern world is widespread and widely known. From elections to elite sports (we see you, Moneyball fans), data is in everything we do and data science is today’s commonly accepted method to foster growth and forge a competitive advantage.

And yet data remains ever so slightly secretive in e-commerce because the industry has been relatively slow to take notice. We see a few brands moving in the right direction but data remains a largely unexplored territory and there are still massive gains to be made for brands that get in on the action ahead of everyone else.

With the surge in e-commerce sales over the past 18 months, more brands than ever before have turned their attention online.

How can data science improve your D2C e-commerce business?

In short, data science identifies how to increase your conversion rate and customer lifetime value. It shows which features encourage your customers to spend, which put them off and what their preferences are for store design and user experience.

It groups your customers into segments based on specific characteristics, explains which segment is most profitable to your business and indicates how to maximise sales from that segment.

Think about it like this: every time a customer performs any kind of action in your store, they’re displaying a preference for something. Which pages they visit before completing or abandoning a purchase, how long they spend on each page, which buttons they click, which they ignore, whether they read blog posts, click on banners, close pop-ups, select languages and so on. All of this paints a picture of what your customers want from a store.

With this information you can subsequently optimise your store and build an e-commerce experience that falls perfectly in line with your most profitable customers’ preferences and expectations. It’s a window into their mind, a digital telepathy.

And the value of mindreading capabilities can’t be overstated. In today’s overcrowded and hypercompetitive arena, any advantage businesses can leverage over their competitors is incredibly valuable.

Data science is an advantage that (currently) only a very few brands are putting to good use. It won’t be long until the floodgates are open and every D2C brand under the digital sun tracks events on their website, so now is the time to get into it if you want to make the biggest gains. Which, of course, you do.

Stay tuned for the next article in The Data Files where we'll look in more detail at how you can use data science to continuing growing your business in the new e-commerce landscape we find ourselves in!

The D2C Summit 2021

To discover more about the transformative power of data science in D2C e-commerce, join us at The D2C Summit 2021. We have industry insiders lined up from Europe’s most successful D2C brands and tools with presentations on how data is changing the game.

We’ll focus on how the e-commerce industry has shifted throughout the pandemic and how the state-of-play is very different now to what it was at the start of 2020. The difficulties D2C brands face in getting customers into their store can be overcome with data science, all but guaranteeing growth in 2022 and beyond.

After 2020’s online edition, we’re so pleased to say that The D2C Summit 2021 will be taking place in person from a wonderful location in the heart of Amsterdam. Tickets are limited so to avoid missing out sign up to our regular newsletters and information updates at thed2csummit.com.

For those who are unable to attend the summit will also be available to stream online!

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