image Big Data is one of the most over-used and over-hyped terms these days, and it’s getting to a point where people seem to replace “data” with “Big Data” altogether. With so much hype and interest in Big Data, it’s hard to ignore it. And yet, when we speak to small-to-mid-sized online retailers, they struggle to understand what Big Data is and whether it can really help a business that isn’t quite so big.

There are two popular definitions of Big Data:

Gartner defines Big Data as, “High volume, high velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization."

Forrester on the other hand, uses a more business-friendly definition: “Big Data is the frontier of a firm’s ability to store, process, and access (SPA) all the data it needs to operate effectively, make decisions, reduce risks, and serve customers.”

Take the “Big” out of it, and it comes down to understanding how to use all data to meet customer needs and grow your business.

There are three key concepts of a data-driven approach:

1. Results Oriented Execution: This means that you are looking to drive a business outcome, such as growing your revenues by 10%. Before you launch any strategy, you should know what results you want. This will help you understand what data you should be tracking and analyzing, and how it reflects on your strategy’s effectiveness.

2. Data Driven Decision Making: This means that you are looking to reduce the trial and error that comes with making decisions on gut-feel and anecdotal information. Instead, you are looking to move to making informed decisions using data.

3. Focus on Actionable Data: This means that you are looking to focus on data that helps you make the decisions you need to achieve the results you aspire.

When viewed in this light, it becomes a lot easier to avoid getting distracted from the hype of Big Data, and instead focus on deriving the maximum value from all data you have access to.

There are a number of ways to get started here. One helpful approach is recognizing that there are different types of data. A useful segmentation is along the depth and breadth of the data available:

• Micro, or “narrow” data, refers to deep transactional, customer or segmentation data.

• Macro, or “broad” data, refers to shallow and wide data such as market data, indices, market trends and more.

Both Micro and Macro data are Big Data, and Magento merchants of all sizes can glean actionable insights from both.

Micro data can reveal greater insights about differences in customer behavior on your store. For example, identifying key segments such as first time buyers, loyal customers, most valuable customers, and measuring their purchase behavior and contribution to revenue, can reveal valuable differences in customer behavior. Armed with these insights, merchants can target segments with appropriate offers and messages. Similarly, conducting A/B testing can provide merchants with insights on messages and strategies that work with their customer base.

Macro data can help add context to your online store performance. For example, comparing sales growth for your store with relevant category trends can help identify opportunities for performance improvement. Similarly, profiling transacting customers along demographic attributes can help merchants identify dominant personas and target their keyword-spend accordingly.

Magento Connect offers a number of extensions that specialize in analyzing both “micro” and “macro” data. Check out Lexity, RJ Metrics, Terapeak (Analytics); AddShoppers (Social Analytics); Windsor Circle, Bronto, Springbot (Segmentation and Targeting); Optimizely (A/B Testing); and Fanplayr (Offers).

These are just a handful of specialized extensions found on the Magento Connect marketplace that offer unique insights with clever analysis of data. With access to the right insights, Magento merchants can start taking advantage of Big Data to compete more effectively.

Abhi Rele
Principal Product Manager, Magento Big Data and Analytics

We welcome your inputs and feedback. You can reach me at or via Twitter (@abhirele)

Related Links: “Hidden Gems: Using Data Driven Insights to Grow Revenue”, panel discussion at Imagine 2013 in Las Vegas, April 8-10, 2013


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