A Merchant’s Metrics Playbook

Retailers today have more channels than ever at their disposal. Yet with more channels comes more complexity, both in strategy and understanding how channels are working. To help understand the current state of e-commerce analytics, Baynote teamed up with the e-tailing group to survey a cross-section of retailers to identify the key metrics they believe will drive the industry forward.

After more than 20 in-depth interviews, the e-tailing group identified analytics evaluation as a top priority for retailers. However, most retailers still view their use of metrics as a work in progress. To help guide online retailers on their quest to make meaningful metrics less elusive, we've put together "A Merchant's Metrics Playbook" to guide the development of a forward-thinking strategy that takes into account the right metrics and methodologies for running your business. We've also created an infographic that showcases the key takeaways from the interviews.

Play No. 1: Align Goals
You may have heard author Jim Collins’ saying, "Get the right people on the bus, and then figure out where to drive it." Similarly for retailers, gaining companywide alignment on goals should be a top priority. To get started, initiate a companywide dialog around the goals your organization is working towards along with the metrics that are key to achieving them.

Play No. 2: Run the Company Like it's Small
When it comes to metrics, even large retailers can learn from the little guys. Being transparent with metrics data will not only provide employees context for why metrics are important to increasing your company's bottom line, but will also inspire greater data-based decision making at all levels. Heeding this advice, even on a small scale, will deliver results.

Play No. 3: Meet Regularly (the Monday Meeting and More)
Metrics themselves don't matter if they're not socialized and accepted across the organization. As with so many things in life, sharing has strong benefits. Try scheduling weekly in-person meetings where decision makers can tackle metrics head on. Doing so will produce more immediate results, empower employees and encourage more active discussion around metrics.

Play No. 4: Standardize Definitions Prior to Analysis
Comparing performance metrics from across your organization is difficult; it becomes even more difficult when everyone is using different definitions. Focus on establishing standardized definitions across your organization to help simplify the reporting process and, more importantly, allow for better metrics analysis. Having established corporate definitions will also help dispel some of the fear employees feel when discussing metrics that pertain to a handful of business units.

Play No. 5: Focus on the Action Needed by Moving Beyond the Numbers
A detailed metrics report is only worthwhile if it leads to action. Focus on looking beyond the numbers to clearly understand what they mean beneath the surface. To enable all employees to focus on the action needed beyond the numbers, consider holding training courses to help familiarize employees with the metrics that matter most to your organization.

Play No. 6: Educate Internally
While there's a cost in gaining detailed information from different sources, retailers are realizing there needs to be a balancing act among cost, education and access. Internal teams should be aligned on all touchpoints under review in order to tie analysis together and reduce complexity. Standardizing definitions, being transparent and holding training courses will go a long way in creating a metrics-minded employee.

Play No. 7: Provide a Holistic View of Information
Presenting metrics in a holistic fashion allows senior managers to gain a more comprehensive understanding of their customers. While synthesizing and presenting data from various business units can be a difficult task, it will facilitate more informed and insightful decision making. Start by compiling metrics that matter to individual business units with a close eye towards recurring themes. Doing so will help create a cohesive metrics overview that's representative of your entire organization.

Play No. 8: Invest in Data Warehouses
While a data warehouse may require up-front capital, the investment will pay off in the form of more accurate and less time-consuming report generation. Not only will you save resources, you'll make metrics more accessible to employees wary of tackling sometimes intimidating big data.

Play No. 9: Dialog and Discuss
Creating a consistent internal dialog about the metrics that matter most to your organization will allow for greater understanding and deeper insights. Initiating a discussion about why specific metrics matter is a great way to get the conversation started and will establish a basic foundation of knowledge throughout the whole organization.

Metrics are a core component of any e-commerce strategy. Tracking the metrics that matter is essential to understanding how to move the needle on profitability. For retailers looking for a metrics strategy, I hope this playbook will be the key to gaining an increased focus and capacity to measure, analyze and optimize the customer experience, ultimately driving growth.

Dan Darnell is the vice president of marketing and products at Baynote.