Why (and How) DTC eCommerce Brands Should Own Their Own Data
Moving forward, the most successful DTC eCommerce brands will collect and operationalize their own first-party data. Here is how they will do it.
The Days of Trusting Google and Facebook as Your Source of Truth are Done
Let’s be honest, we never really trusted Google or Facebook to collect and steward our website data…But they just made it so convenient. We dropped their pixels on our websites and hoped for the best. And for a long time, in doing so we were rewarded with access to a huge customer base at a reasonable customer acquisition cost.
For most DTC eCommerce brands, there really weren’t any alternatives to this approach for quite some time. Emerging and mid-market eCommerce brands didn’t have access to the tools, infrastructure, or knowhow to collect and organize their own first-party data. Data warehouses were long expensive and complex. Working with data inside of warehouses even more so.
But that’s changing.
Today, many options exist to solve this problem. With a little help, and with tools like Fueled, DBT, Hightouch, and an array of affordable BI tools, DTC eCommerce merchants can quickly build out and leverage their own modern data stacks.
Why Collect and Operationalize Your 1st-Party Data?
Well-organized and understood 1st-party data opens the door to growth and new efficiencies with DTC organizations:
Decreased Customer Acquisition Costs (Sorta…)
Let’s face it, the days of spending a dollar on Facebook ads and getting $5 back in first-purchase revenue are done. We’ll never see those early days of Google and Facebook advertising again.
But that doesn’t mean that DTC brands can’t improve CAC incrementally through more sophisticated targeting, powered by more complete data.
Increased Customer Lifetime Value
Here’s where 1st-party customer data can really shine: When you know more about your customers and can stitch together their cross-channel journey with your brand, you can build more personalized experiences that reduce churn and increase secondary purchase rates.
Reduce Operating Costs & More Accurate Forecasting
Better data, understood across your business, can improve operational efficiencies. Of course, data alone doesn’t drive anything — but the first step in forecasting inventory requirements, improving supply chains, adjusting pricing models, and designing better products starts with data. (If you have questions about this, please consider reaching out to our friends at Acorn Analytics. Mike can hook you up with some incredible insights into your business!)
High-Level DTC 1st-Party Data Solution Architecture
There are four major components to building a customer data solution for DTC eCommerce brands:
- Data Collection Layer
- Data Storage Layer
- Data Transformation Layer
- Data Analysis and Operational Layer
Data Collection Layer
Owning and operationalizing 1st-party customer data as an eCommerce brand starts with, you guessed it, actually collecting the right data.
Many brands continue to skip this step. It’s easy to get sucked in by the marketing of all-in-one attribution platforms like TripleWhale that purport to make things like multi-touch attribution models a snap. But the problem with these platforms is that they remain opaque data silos. How do their attribution models work? And more importantly: How do you get your data out of these reporting tools? Unfortunately, the answer to that latter question is: You can’t. These platforms, like Google and Facebook, control your data.
In response to this failing, my team created Fueled. Fueled is a customer data platform (CDP) for eCommerce.
That’s a mouthful…Fueled needs stronger marketing…
Enter Fueled’s Data Collection Features
Ignoring the CDP acronym, Fueled helps eCommerce merchants collect, organize, and push 1st-party eCommerce data anywhere you need it:
- Fueled can be run as a “first-party script” on your Shopify or BigCommerce website, this means we get around ad blockers. Combined with our server-side tracking features, we offer the most complete and accurate data collection solution possible for Shopify or BigCommerce.
- We can push this data to destinations like Google Analytics 4, Facebook Conversion API, or your own data warehouse. This last point is quite unique among attribution tracking tools. Fueled lets you collect and store all of your customer engagement data on your own. Then, you can do with it however you’d like — forever.
Data Storage Layer
Having collected first-party data with a tool like Fueled, the next step in this solution is to store the data somewhere.
Lots of options for data warehousing exist these days, from AWS RedShift to Google’s BigQuery to Snowflake or Data Bricks.
Interestingly, BigCommerce recently released an out-of-the-box ETL to replicate BigCommerce data in BigQuery.
Once you’ve selected a data warehouse, Fueled can start pushing real-time customer events to it. And then, you can blend that data with other data sources using ETL tools like FiveTran or Stitch.
Data Transformation Layer
Transforming warehouse data has historically been another challenge for mid-market companies that can’t afford large data science teams. However, DBT has simplified these challenges significantly over the last few years.
With DBT, engineering teams can write clear, well-documented python scripts that compile into complex SQL queries for blending and flattening eCommerce data. Many DBT packages exist in the open source community to make this even easier.
Data Analysis and Operational Layer
Alongside of advances in data warehousing and transformation, more and more open source and mid-market tools have hit the market for analyzing eCommerce data. We’re big fans of Apache Superset, and the very new and exciting LightDash — both of which are open source, with affordable SaaS options.
More importantly, we’re excited about a new category of data infrastructure products called Reverse ETLs, the most exciting of which is Hightouch.
With reverse ETLs like Hightouch (as well as Census, which was first, but not quite as feature-rich IMHO…), eCommerce brands can push data stored in warehouses as if it were a live event stream to various destinations.
Reverse ETLs present some benefits over traditional CDP-solutions, in that they better support blending of event data, as well as the playback of historical data to different destinations. This can come in really handy, for example, if you want to change email marketing platforms without losing historical event data. Reverse ETLs also present benefits when swapping out tools in your customer engagement stack. For example, with a reverse ETL in the mix, it’s much easier and less involved swapping out customer review platforms, or customer service tools.
Where to Go from Here…
I’m sure that some of what I’ve shared here might be new and potentially a little overwhelming to marketing and operations teams at successful DTC companies. If you want to talk through any of these solutions and tools, please feel free to comment here or give me a shout.
But to get started, start collecting 1st-party data.
Again, that’s where Fueled comes in. Within two business days and for just a couple hundred dollars, we can help your Shopify or BigCommerce store start collecting 1st-party data and stuffing it in a data warehouse. From there, you can take your time to explore ways to leverage the data. But collecting and organizing it is Day #1.