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Types and Best Practices (2023)



If you run an ecommerce business, you have a wealth of data at your fingertips. 

You can use it to predict trends, forecast demand, and optimize operations for a consistent customer experience. Distilling these insights from a sea of information requires careful data management—the process of storing and sorting the data your business collects. Here’s what you need to know about ecommerce data management, and how you can use it to make your business stronger. 

What is ecommerce data management?

Ecommerce data management is the process of collecting, organizing, storing, securing, and analyzing the information your online business collects. Proper ecommerce data management also involves:

  • Data integration: consolidating data from multiple sources to create a unified view of the business 
  • Data cleansing: removing inaccuracies and duplicate entries
  • Data visualization: presenting the findings in a meaningful way for decision-making

With proper management, your data is more user-friendly, making it easier to identify patterns that can help you grow your business. It’s also more secure, helping mitigate the risks of data breaches and other threats. 

Types of ecommerce data management

There are two common systems for ecommerce data management: customer data management and product data management.

1. Customer data management

Customer data management (CDM) is the storage and processing of information you collect from your customers, including their names, email addresses, shipping addresses, purchase history, browsing habits, and demographic details. Customer data management platforms allow you to collect data anytime a customer connects with your brand, whether it’s by purchasing a product, visiting your website, liking a post on social media, or subscribing to your email list.

You can use customer data to learn more about your shoppers. You’ll be able to identify patterns in buying behaviors, how and where they engage with your brand, and the ads that resonate with them. Then use these insights to improve customer retention, optimize your marketing strategies, assess brand exposure, and increase conversions. Shopify merchants can use artificial intelligence (AI) through the Wiser app to recommend items based on customer data like past purchases and browsing behavior. 

2. Product data management

Product data management (PDM) handles information about your products, including inventory data, product specifications, pricing and sales data, and supplier details. Product data is typically stored in a product data management system. 

An ecommerce product data management system can help you keep product information updated across sales channels. A PDM system syncs, structures, and organizes the data, making it accessible for stakeholders to collaborate, share, and manage the information. You can use product data to optimize your inventory management, allowing you to forecast product demand and analyze market trends for a competitive edge. 

Best practices for ecommerce data management 

To get the most from your ecommerce data, follow these best practices:

  • Determine business objectives and goals. Data management is a time-consuming process, and not every data point is useful. It’s up to you and your stakeholders to determine what’s worth collecting and how it can benefit the business. For example, if your goal is to increase conversions, you may focus on metrics like traffic sources and cart abandonment rate.
  • Establish a data governance system. Whether you use cloud storage or an on-site server, you need security protocols such as data encryption, firewalls, SSL certificates, and two-factor authentication to protect sensitive information. Regularly review your policies to ensure you adhere to industry standards and regulatory requirements, and closely monitor and update your system to prevent security breaches.
  • Use a data management tool. Consider using both a comprehensive PDM system and a CDM system to manage your data. Effective systems make it easier to automate data intake and organize data to create a single source of truth. Data management systems can also help you secure, cleanse, filter, and visualize your data to extract insights.
  • Appoint data stewards. Choose a dedicated and knowledgeable team of data security or data governance experts to manage your data, determine the security protocols, and grant permissions to stakeholders. Manage data internally or outsource the responsibility to a firm specializing in security and governance.

Challenges in ecommerce data management 

While ecommerce businesses benefit from data management, they still face several challenges: 

Online and in-store data synchronization 

Ecommerce businesses often deal with unorganized data and data silos (where information is controlled by one part of your organization and inaccessible to the rest of your company). For example, if your ecommerce and in-store product data isn’t in sync, your customers might see different promotions or products depending on where they shop, leading to a poor customer experience

You can use a PDM system to integrate product data across platforms to create a single source of truth. This allows for a more consistent brand experience, since customers see the same information across channels, which can help increase customer retention and satisfaction. 

Supply chain disruptions

You have to manage information from external partners such as suppliers and third-party logistics distributors (businesses that handle order processing, fulfillment, and shipping). If your fulfillment team doesn’t have accurate order information from suppliers and distributors, they can’t give the customer accurate information about where their package is and when they can expect to receive it. 

Customer data security and privacy

Customers trust you’ll keep their private information safe. Without a secure and encrypted CDM system, your customer data is susceptible to breaches. A strong CDM system can employ machine learning algorithms to help ecommerce businesses prevent data breaches by flagging fraudulent user behavior and phishing attempts.

Drive your business forward with Shopify’s analytics

Shopify’s user-friendly reports and analytics capabilities help you make better decisions, faster. Choose from pre-built dashboards and reports or build your own to spot trends, capitalize on opportunities, and supercharge your decision-making.

Explore Shopify’s analytics

Ecommerce data management FAQ

How do ecommerce businesses collect data?

Ecommerce businesses can collect customer data through their websites using Google Analytics, social media analytics, and CRM software. They can collect product data through inventory tracking and the use of stock-keeping units (SKUs).

Is data encryption a standard feature in ecommerce data management systems?

Yes, data encryption is a standard feature in ecommerce data management systems. This enables you to protect sensitive customer data, such as payment details and other sensitive information.

How do ecommerce businesses ensure the security of their data?

You ensure the security of your data by implementing security measures and protocols such as secure servers, firewalls, SSL certificates, and two-factor authentication. You can also regularly back up data and put in place a data recovery plan in case of data loss.



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