One Time Decisions and Daily Decisions

On my quest to understand the decision making process in the ecommerce environment, i'd be writing a series on "When Online Retailers Make Decision..." and this is the first post in the series. Subscribe to this blog to keep track of the forth coming entries.

Business decisions are supposed to be guided by information and experience.

In business, the decision making process is a continuous activity integrated in the interaction with the environment. There is always a consequence to every decision – either POSITIVE OR NEGATIVE - and it’s just a matter of time before you know if you have made the right decision or not.

I was trying to figure out how online retailers make the majority of their decisions. Are their decisions backed by relevant information or just plain intuition?

One time decisions: Well, there are few areas where online retailers do thorough research before they make a decision – decisions such as selecting the right ecommerce platform or a search marketing agency or shopping cart software. In most of these cases, the retailers have a clear idea about their budget, requirements etc. They usually have enough time to look at a few demos and typically discuss with friends before deciding to go with a particular solution. There are a lot of websites that provide loads of information to guide the retailer to make these type of decisions.

Daily decisions: However, there are also areas where retailers don’t do thorough research before making decisions – areas where they need to take decisions on a daily basis. These are the decisions that determine the success of the business in the long run.

Retailers must make daily decisions on the product mix they want to offer, the price they will bid on paid channels, the prices they set for their products, the size of the inventory they want to hold and much more. Retailers typically rely on intuition rather than information when they make these crucial decisions. They either don’t have relevant, ready to use information with them or they have too much information that is hard to interpret. Some retailers don’t even have time to look at information before they make these decisions. Even if decisions are based on information, in most of cases, retailers only have historical data in hand, which results in decisions that are based on hindsight analysis!

Informed decisions: Imagine that when you log-in to your system every morning, a dashboard displays a list of products that need your attention for that day. These products either require a change in price or a change in channel. Imagine if the same dashboard also gives you intelligent recommendations on the optimum price of the product and the best channel suited to market the product – after analyzing your internal data, market information and knowing your business rules and strategy.

Well, wouldn’t it do a world of good to your business if you had such a dashboard?