While a commitment to e-commerce is critical to doing business in the next millennium, e-commerce supported by data warehousing is the smartest investment of all. Companies that do not capture clickstream and transaction data from their e-commerce systems are literally throwing away the best market research available.

Online transactional data can tell a company more than they have ever known about their own customers, products, inventories and suppliers; and a data warehouse provides the ability to analyze that data to customize marketing and solutions (limited only by the imagination) that are appropriate for each customer.

Business-to-Consumer E- Business

E-business provides a direct link to customers, allowing companies to bypass others in the value chain and foster the development and delivery of new products and services for new and existing customers. The clickstream, or footprints customers leave during online transactions, provides valuable insight into customer behavior. Online transactional data is stored in the warehouse and used to develop customer profiles ­ who is buying, why do they buy, when and what are they buying? This information, married with traditional, non e-enabled legacy application data, presents a more strategic and complete picture of actual customers. Customer profiles are then analyzed and used to craft customized product offerings that more effectively reach their appropriate audience. For example, a data warehouse will enable a financial institution to determine which customers make traditional, on-site transactions and which customers rely on online services to manage their finances. Those organizations then develop and market their banking solutions to the appropriate customers and eliminate the cost of marketing products and services that don't interest particular customers.

E-business is single- handedly changing the way people make travel arrangements; manage their stocks, mutual funds and health benefits; and shop for wedding and Christmas gifts. The e- insurance company now offers a centralized interactive marketplace for insurance information, electronic quotation and direct online purchasing. Online brokerage sites provide some organizations with up to 15 percent of their revenue; and thousands of consumers a day visit online travel agencies, saving consumers and sellers millions of dollars a year in travel and hotel arrangements. The combination of data warehousing and e-business enables organizations to forfeit internal processes to the customer, allowing them to configure their own products and services. Dell allows customers to customize their purchases online instead of having a customer service representative build the product for them. In addition, an online media retailer might allow customers to access their buying history so that they do not duplicate purchases made in the past. Customers might also access the warehouse to view a personalized shopping list of items "reserved" for future purchases.

Business-to-consumer (B2C) e-business lets companies offer lower prices, full stock, huge selection and unique customer-defined solutions, but it also presents considerable risk. B2C e-business forces traditional organizations to participate in the delivery channel in a manner to which they are unaccustomed. While bypassing the middleman with electronic delivery channels can save everyone in this new supply chain money and time, it presents a need for a change in the traditional business model and the addition of more sophisticated technology. Operating in the new economy ensures higher visibility with customers, and that increases the need for quick delivery of accurate customer information. Delivery of inaccurate information will lead to confusion and dissatisfaction.

Data warehousing and e-business are redefining the way companies service their customers. No longer is it necessary to purchase data. No longer are clever direct mail campaigns the be-all and end-all of marketing. Instead, e-commerce and data warehousing allow you to analyze your own customer base and determine what types of marketing and product offerings suit which customers best.

Register or login for access to this item and much more

All Information Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access