The Rising Costs of Data & Analytics: How Can Retailers Extract Value

In today’s data-driven world, retailers are investing heavily in data and analytics to stay competitive. However, despite the enormous investments being made, many brands are still struggling to extract real value from their data.

In this blog we’ll explore the problems of data and analytics for growing e-commerce brands, the growing costs associated, and outline a possible way forward.

Data & Strategy; The Cost & The Struggle

data & analytics industry value

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In 2022, the total value of the global data & analytics market was a huge $101 billion. It’s a clear testament to the importance organizations attach to data-driven strategies. In fact, a Gartner report in July 2023 revealed that 79% of companies view data as absolutely critical to their success.

However, here’s the catch: only 44% of organizations report that their data and analytics teams are providing real value. So, what’s the problem? Why are businesses of all sizes struggling to extract value from their data, and what can ecommerce brands and retailers do to turn this around?

Too Many Sources of Information

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Many businesses, especially growing e-commerce brands, are being weighed down by multiple data sources. Many retailers will have separate reports for sales (e.g. Shopify, WooCommerce, Amazon), marketing (e.g. Meta, Google, Klaviyo), inventory and customer / first-party data. Whilst having access to this data is a strength, it can also lead to negative business impacts when it’s not managed efficiently.

These data silos are a common problem, creating a barrier to accessing and sharing information. This fragmentation of data, without a single source of truth, creates poor decision-making across teams and limits the organization’s agility. As an Optsi client told us…

client success quote aston martin f1

Resource Intensive

Producing actionable analytics can be a strenuous process. Analytics often require significant resources, both human and technological, which can be a significant barrier for smaller and medium-sized enterprises (SMEs). Specialized knowledge is often a requirement, and many teams lack a deep understanding of measurement and analytics, making it even more challenging to turn data into meaningful insights.

The Costs

Bringing everything in house and within a data warehouse is often touted as the solution, but it comes at a cost. And it’s a cost that’s prohibitive to many brands who are investing in growth strategies. Here’s an estimated breakdown of the annual costs for owning and operating a data warehouse…

cost of running data warehouse

The Solution - A Cost Effective Single Source of Truth

So it’s clear that in a data-driven market, having a single source of truth is essential for e-commerce brands, and retailers as a whole, to make well informed and strategic decisions. But with the human and tech costs for bringing this “in house” being prohibitively high, many look for a third party with the skills, resource and the platform to be the basis for strategic decisions.

Enter Optsi.

optsi overview

Through a single click integration, we empower brands to make more informed, data-driven decisions based on store, marketing, product and first party data, all in a single suite of reports. And as you can see, the cost saving can be significant versus bringing it in house, and the benefits can be significant versus not doing anything.

optsi price comparison against running and mainting data warehouse

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Schedule a demo with Optsi today to find out more about how we can transform your current data strategy and improve business performance

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