6 Reasons Why Your eCommerce Needs a Data Warehouse

What is a data warehouse?

A data warehouse is a centralized repository for information. Data comes from multiple sources. Data is also processed in multiple formats: structured and unstructured. But with a data warehouse, it’s all stored and accessed from the same place. 

A data warehouse parallels data orchestration. What is data orchestration? The integration of multiple software applications together. Instead of a central space for managing apps, you have a hub for handling data.

Here are some examples of common data you can find in an eCommerce data warehouse:

• Raw and unsampled data (e.g. Google Analytics)
• Data from ad platforms
• Marketing data (e.g. MailChimp)
• Backend data (e.g. order and customer data)
• Inventory management and warehouse data

Businesses use data warehouses to keep their data consistent and updated. Modern business intelligence (BI) tools act as a visible, user-friendly interface on a vast data operation. These tools enable leaders to make sense of all the business’s data at a glance.

Data warehouses used to be mainly on-premise and only used by large organizations. Today, there are eCommerce data warehouse solutions for businesses of any size. That’s thanks to cloud technologies that allow for flexible, scalable data warehousing.

6 reasons why your eCommerce needs a data warehouse

Setting up an on-premise eCommerce data warehouse requires a mix of third-party providers and in-house professionals. Fortunately, cloud-based solutions make data warehousing much easier to implement.

Here are six reasons why you need an eCommerce data warehouse.

Streamlines eCommerce data management

Without data warehousing, you’ll spend more time gathering data than you do gleaning insights from it.

For example, let’s take a look at marketing. You would need to gather data from your email marketing campaigns with one or more platforms. This includes sources like Google Ads, Mailchimp, Salesforce, and other eCommerce tools.

Image sourced from Mordor Intelligence

Mordor Intelligence predicts the active data warehousing market is expected to grow from $9 billion to over $15 billion by 2028. One of these reasons is that data warehouses streamline data collection for analysis. 

Ecommerce data warehousing automates real-time data gathering. You can have seamless data collection from all of your platforms. That means you can spend more time on strategic, value-creating work and less time on admin. Instead of data entry and spreadsheets, you can build business value in other ways.

Boosts business intelligence and analytics

A 2021 report found that 54% of businesses held a cloud-only data warehouse as the top analytics trend. Why is that, you ask? With a data warehouse, you have a central access point for your BI tools accessible through the cloud.

This means that you can integrate data and connect it to advanced technologies like AI. More AI promotes further data automation capabilities. This lets you take insights one step further into the future!!

Image sourced from Yellowbrick

By leveraging modern BI applications in the cloud, you can implement predictive modeling. Traditional analytics will be based on historical data from a single source. For example, take optimizing something like inventory levels. The reports generated from the data warehouse will show you an updated average for the current season or week.

Improves eCommerce performance and scalability

Data warehouses improve how your eCommerce store performs. Predictive analytics give you better decision-making. It also helps you better monitor marketing efforts. This can boost sales performance with tools like conversational eCommerce..

For example, let's look at when a customer makes a purchase on your website. There are many touchpoints that contribute to the sale.

Old hat methods would likely credit the last interaction with making the sale. However, a customer’s journey involves more than that. Touchpoints include social media ads, organic searches, email marketing, and landing pages.

Centralized data enables much more accurate attribution modeling for sales and marketing. Attribution modeling tools account for every touchpoint on the customer journey. In this way, you can better assess campaigns and optimize them for better performance. You can also easily spot bottlenecks and pain points where customers aren’t converting.

Data warehouses are optimized for query performance. All your reports are up-to-date and comes from a single source of truth. This means your team pulls up the information they need as rapidly as possible, and they know it’s accurate to the minute.

As your business grows, storing that information on-premesis becomes harder. With cloud eCommerce data warehouses, you can add storage and resources in minutes. Cloud computing bandwidth also scales with demand. Instead of a costly migration process, it can be as simple as logging on to the admin portal and clicking on whatever you need.

Enhances customer experience

Image sourced from McKinsey

In the early days of the internet, having the right domain names drove business. Having an .au domain was enough to get an edge over a site that hadn’t been customised to the region. Today, that and much more is expected. According to McKinsey, 71% of customers expect a servivce personalized to them, personally.

One of the first steps to better personalization is customer segmentation. Data warehousing lets you have all of the customer puzzle pieces (data) in one place.

You will have access to collated data from many different sources. The power of big data takes segmentation to a much more granular level. Sure, you have simple metrics like age or region. However, you can dig deeper into detailed shopping habits and behaviors. With the right tools and data, how best to segment your customers is up to your imagination.

You can use this information for targeted ad campaigns and retargeting marketing efforts. An eCommerce data warehouse helps you build more personalized customer experiences. Tailoring the experience helps you convert at higher rates.

Data warehousing also breathes new life into your contact center operations. Having centralized data facilitates quicker ticket resolutions. This is because agents will have all the necessary information on one screen. 

You can consolidate data from mobile apps, websites, email, and social platforms. Data warehousing will empower you to offer omnichannel customer support. Data is connected between your CRM, helpdesk app, and other tools. All of this creates a more personalized support experience.

Improves eCommerce data compliance and security

Many data warehouses operate with an “extract, transform, load” (ETL) approach to data quality management. First, data is extracted from the source. It is then transformed to fit the system, and loaded into its final destination.

ETL data pipelines can be run at regular intervals. Alternatively, they are run in real-time for streaming. This works for both structured and unstructured data. ETL assures that data warehouses have clean, accurate, and consistent data.

An eCommerce data warehouse streamlines user access control and data governance. This makes your data much more secure, while letting you specify permissions for role-based access to your team. This maintains privacy for both your company and your customers.

All data is encrypted during transfer, and can be anonymized in storage. This means your analysts can work on data without looking at customers’ personal details.

Data warehouses also include provisions for data retention, data deletion, and rights of data subjects. All of these precautions ensure the stored data is compliant with regulations like HIPAA and GDPR.

Boosts eCommerce future-proofing efforts

Image sourced from Statista

According to Statista, global IT services spending will rise to $1.42 trillion in 2023. One of the reasons for this steep rise is more SaaS in the IT sector and other cloud-based infrastructure.

BI tools and other business applications are being developed in the cloud, for the cloud. Having your data stored on-prem or scattered across platforms creates bottlenecks in your operation. When you try to adopt your future technology, these legacy systems will hold you back.

When you first create a marketplace online, you don’t know what new technologies and commercial trends are going to throw at you. A datawarehouse makes all your information available in one system, which makes it easier to implement future tech like AI, buy-now-pay-later, and more. And with cloud infrastructure that can scale up and down as you need, you’ll be ready to pivot to whatever a changing market throws at you.