In the fourth and final part of my series looking at Amazon’s approach to online retail management, I focus on the practice of reviewing.

Many retailers spend their time reviewing what’s happened.  By contrast, the Amazon culture is to focus on what you can actually do about it.  Input metrics are continually evolved and refined.  The key to Amazon’s success is the relentless focus on the search for the right metrics. “There’s an incredible amount of challenging the other person,” says Manfred Bluemel, a former senior market researcher at Amazon. “You want to have absolute certainty about what you are saying. If you can stand a barrage of questions, then you have picked the right metric. But you had better have your stuff together. The best number wins.”

Review is necessary to ensure continuous improvement: how to gain real insight from the data, diagnose the underlying causes of performance (good or bad), and discover new insights.

Reviewing an online business can be difficult. Physical retail is characterised by anonymous transactions, good enough data and insight based on gut and experience.  Whilst retailers such as Tesco have used data to build great businesses, many retailers have succeeded without a data-driven approach.

Conversely, online there are bigger opportunities and threats: the opportunity to have a complete insight into customers, products and marketing, and the threat that your competitors may ‘out-insight’ you.  For example, they could work out that certain types of customers are high value and then outspend you on performance marketing.  Or they could develop some deep customer insight and then communicate to your customers in a more relevant and timely manner (raising customers’ expectations in the process).

There are many challenges to gaining insight from online data.  The nature of eCommerce data makes it extremely powerful and equally dangerous – it’s very easy to misinterpret data or simply draw the wrong conclusions.  This is a battle for insight.

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