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Why Data Visualization is Essential to eCommerce Teams

J.D. Crabtree
May 6, 2020
Analytics

The age of Big Data is upon us. In fact, 90% of all data that has ever been created was created in the past 2 years. Even when confined specifically to data that is relevant to your business, that is more data than any human, or team of humans, could hope to sort through in a lifetime. Going beyond mere sorting and recognizing patterns that can be used to draw meaning and actionable insights is even more impossible.

Thankfully, the same technology that allows us to create that much data allows us to process it, giving businesses more insight into how their business operates than previous generations of business owners could ever dream of. Netflix uses their big data analytics to save themselves $1 billion per year on customer retention. They aren't alone. Businesses all over the world are using data they collect about their customers and how those customers interact with their websites, products, and services to realize their growth and profitability goals. 

Making Sense of Big Data

Capturing large amounts of data about your operation is key to maximizing your profits and increasing growth, but understanding all of that data is not an easy task. Even with powerful computers and machine learning algorithms crunching the data and finding patterns, there is a lot of information for a business owner to sort through. Getting the most out of your own big data efforts means understanding which metrics are important and should be focused on, which are less useful but serve as a nice general overview, and which aren't important at all. 

Once you know which metrics to look at, they still need to be presented to you in a way that is easy to understand and provides you the information that you are looking for when you are looking for it. Like understanding the underlying metrics themselves, the art of presenting those metrics in an effective way that facilitates action without impeding productivity is vital to a successful big data operation. All the data and insights in the world aren't very useful if they are not presented in a way that you can understand.

How Well Designed Visualization Can Help

Data visualization is a difficult task for designers. For a competent designer, creating something that looks pretty is easy. Data visualization must go further than that though. Often, a mockup design created with fake data will look great, until the real data is put in and issues begin to crop up. Without taking into account the actual data being used, charts can end up looking either too sparse or two cluttered.

For this reason, a well-designed data visualization tool will need to be managed by someone who has experience both in design and in the underlying data the visualization is meant to represent. This way, you can be assured that the people who will be relying on the data will be able to understand it quickly and make the most of it. There are other ways that well-designed data visualization tools are important to your eCommerce businesses as well. Let's take a look at a few of them. 

One example would be viewing a representation of your sales by product. This is typically done in a pie chart, a way to represent summary data and high-level breakdowns or to show distribution between a few large categories.

Another example would be viewing a representation of active Facebook Campaigns in a table to see spend, click, ROAS, and other critical metrics.

Then there is finding a way to correlate marketing site performance in a visual format. Line charts are popular for this use case due to it being great for viewing patterns over time. They’re also useful for comparison of values and distributions. They let users quickly digest information and narrow down on a single attribute.

Helps You Achieve Your Goals

Analytics are easy to capture and the metrics they calculate are easy to display. What's not so easy is tailoring those metrics to a specific audience. A construction company is going to have a completely different set of important metrics than an eCommerce company would. A good data visualization tool will know which metrics are important to their intended audience and present those metrics front and center so that they are as easy to find as possible. 

The design of any data visualization dashboard should begin with asking which questions the target audience is likely to want answers to. Which of those are first level questions, such as a general overview of the health of the company, and which are more detailed questions, such as what factors are contributing to that health. The prominence and location of all the data that will be represented can then be determined by the answer to those questions so the data is where it needs to be for the user to make quick, informed decisions with it.

Represents Data The Right Way

Data visualization can go quickly from a great asset to a giant liability when the data is not presented correctly. This fact is frequently taken advantage of by shady people who want to intentionally misrepresent data. For example, a bar graph that doesn't start at the baseline will seem to indicate a greater variance between the items than the data actually shows. Although marketing departments may take advantage of tricks like this, no reputable analytics company is going to intentionally fudge their metrics, but a good provider will still take great care to ensure that the data is presented the right way. Good data can still give bad results if presented poorly, even when doing so isn't intentional.

There are a few key aspects with regard to the presentation of data that make good visualization important to helping your eCommerce business grow. The first is that the right type of chart for the data is presented. It may seem obvious, but once you've seen a pie chart that adds up to more than 100%, you'll realize that not everyone knows how to pick the chart that best represents the data. Going back to the previous point, the values on the axis that make up the chart should also be picked in such a way that the data isn't visually skewed. The other aspects relate to the design of the chart itself. The chart should be clearly labeled so that the user never has to guess what data they are looking at. It should use colors that are different enough to stand apart, but not so different to distract from the meaning.

Being able to visualize data is a powerful tool for understanding exactly what you are looking at. It allows you to more quickly internalize how much growth a given metric has, and how that growth compares to previous cycles. Good visualization tools will present this data to you in a way that is accurate and free from unintentional bias.

Makes The Data More Engaging

At our core, humans are visual creatures. The saying, 'A picture is worth a thousand words' is certainly applicable in the realm of large datasets that have the potential to get boring fast. Even if you are highly invested in the data being presented, as you likely are as someone running a business and looking at the important metrics that tell its story, scanning line after line on a spreadsheet feels tedious and unproductive. 

Charts and graphs make the data more interesting because they add visual appeal. Well-designed data Virtualization will create even greater visual appeal through the use of professionally designed and aesthetically pleasing visuals. Because you can see the changes in a graphic very quickly, they have a more dynamic feel than raw data even when the graphs themselves are static. This turns checking your key metrics into something that you look forward to rather than a chore that is simply a part of the job. 

Frees You from Data Overload

Too much data being presented at once is a problem with both raw numbers and with poorly designed visualizations. Spreadsheets and other methods of displaying data without visualization are just a big wall of text and numbers that jumble together unless you are paying strict attention to the formatting. In order to parse all the information you need, you'll need to go through pages and pages of data.

Data visualization solves this problem by processing the data into meaningful ways and putting it into smaller, easier to digest chunks. Good data visualization will take great care not to present too much data at once and to break the display of data down into logical groupings that make it easy to understand what you are looking at from just a glance.

Helps to Keep You Organized

The final benefit to discuss is a direct result of the other benefits. When your data is presented to you in logical groupings that are designed to be as easy to read as possible and put all the important information in the most prominent positions, you end up with a system that is efficiently organized. This means that it will be easy for you to get to the metrics that you need, and relevant related metrics will be close by once you get there.

Conclusion

Growing your eCommerce business means understanding how every facet works. With the swarms of data that we can collect today, that means taking a more granular look at your operation that was ever possible before. In order to do that effectively, you'll need that data to be processed and presented in a way that makes sense and can be read quickly. Having a good data visualization tool in place that draws your eyes to the most important metrics will help guide you in decisions to help you achieve both the long term and short term goals you've set for your business.

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