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Challenges CMOs in the E-commerce Industry Are Facing in 2021

Graham Needham
August 27, 2021 | 11 min read
Chief Marketing Officers (CMOs) are responsible for managing the planning, development and execution of an e-commerce business’ marketing and advertising. The role of an e-commerce CMO is in the middle of major transformations particularly with the COVID-19 pandemic rapidly changing customer online habits, and requirements newly introduced due to Brexit and updated EU VAT rules. E-commerce businesses are dealing with sudden shifts in focus especially concerning customers’ expectations and increased competition in the online marketplace.

CMOs are now facing the requirement to rapidly bridge marketing and technology. And with more and more diverse types of data incoming from multiple sources including social media, a CMO needs to work closely with their data stewards to not just have access to needed data, but to make sure it is correct and usable for analytics. The available technology is evolving but tried and tested data intelligence methodologies can still be utilized to help marketing departments forge new connections with their customers and improve the success of their brands.

CMOs can differentiate their e-commerce offerings from the competition by enabling consumers to interact with their brands in superior ways, leveraging digital and social platforms to create a better customer experience. Omnichannel selling is becoming the norm, requiring unified data and processes, and if the CMO gets the creative path toward continued growth and innovation correct, it will generate more sales, increase revenues, and improve customer loyalty.

Analytics will flourish in this modern, expanding digital environment, the need for automation will grow, and artificial intelligence (AI) will get less artificial and more intelligent as its depth of knowledge increases.

CMOs will need to adapt to, overcome, and take advantage of all of these initial requirements to obtain any significant benefits for the business. However, with all this digital transformation, 44% of B2B marketers say that digital fatigue itself is one of their biggest challenges of 2021. This will provide a major challenge for many CMOs, especially related to gaining insights from customer data. Internal BI or data science teams might not be able to address such challenges internally and will need help.

In 2021, CMOs are facing some specific, primary challenges:

1. Handling complex analytics

CMOs must work with their CRM teams to ensure the quality of data being used for marketing purposes to perform customer analytics. Proper data preparation and integration are essential to get the data right first and avoid mis-marketing. Harmonizing data across multiple systems can enable customer matching and the creation of master customer records supplying the marketing team with an extremely valuable 360-degree view of their customers.

A solid base of data with the overall numbers and the ability to roll up and drill down into data will enable better business decisions using data science models and machine learning. Business intelligence (BI) reports can be prepared to report marketing insights allowing organizations to pivot quickly for high return on investment (ROI) changes. The data, reports, and smart insights will drive better business results, which can make a business case for (re)investing in data quality.

For instance, look-alike modelling leverages machine learning to combine customer preferences and behavior to identify potential customers that act like your target audience. This enables marketers to extend the reach of their marketing campaigns and increase the engagement rate and is widely used nowadays in PPC ads on different platforms from Facebook and LinkedIn to Quora.

2. Enhancing the customer experience including personalization

Another challenge for CMOs is the need to improve the customer experience. They will need to utilize current data including order history and product information combined with insights to segment customers. Such grouping of customers based on various criteria helps to prioritize marketing at targeted segments with customized campaigns and promotions.

Through market basket analysis, to see relations among such data as product items and categories, marketing teams will be able to promote a personalized experience with better recommendations and offers for higher upsells and cross-sells. Marketing will be measurable enabling improved efficiency of campaigns.

Personalization will start to go beyond just purchasing to making a bond with customers. To personalize the customer experience and remove any disruptions in the customer journey, mapping the customer journey is vital, by making a list of when and how customers engage with the brand. Customer’s social media behavior and life events can give a significant advantage to win the customer over the competition.

3. Increasing conversion rates with better offers and recommendations

This challenge is always a particularly sticky one to deal with but it’s all about converting shoppers into paying customers. With this challenge, there may also become the need for the ability to promptly identify the demand for new products or services – used correctly this data can be a marketer’s dream opportunity.

Proper analysis of your data will give the marketing team insights into how to meet these demands more effectively. Recommendations using machine learning will ensure precisely targeted offering resulting in increased customer satisfaction with the buying process. And such customer experience ultimately brings more upsells and cross-sells resulting in higher revenues.

4. Increasing customer loyalty

Modern CMOs should be concentrating on loyalty programs. Gartner says that 73% of CMOs will focus on existing markets to fuel growth as this is a low-risk strategy, spending on loyalty and retention marketing will increase by 30% in 2021. And according to Forrester, spending on loyalty and retention marketing will increase by 30% in 2021. Forrester emphasizes that this needs to be done by putting “the customer at the center of everything you do: leadership, strategy, and operations.”

Customer loyalty can be boosted through data services such as mapping the customer journey, customer matching and segmentation, and improving the customer experience resulting in increased customer lifetime value (CLTV). But most of all, loyalty programs are easily improved and marketed when utilizing good, quality data, and the analysis thereof.

5. Customer retention

The online digital marketplace can be a fickle arena with customers leaving for competitors at the click of a button, so e-commerce sellers need to fight for customer retention. This will be one of the CMOs most difficult tasks with rapid changes in technology, environment, prices, and social habits. Right now, for instance, following widespread climate change protests around the world, green consumerism is growing in popularity.

Appropriate data preparation and integration to create master customer records, followed by data stewardship excellence, permits CMOs to take advantage of having a 360-degree view of their customers. Knowing which customers are most likely to leave and which customers are the most valuable allows for targeted marketing campaigns, customer lifetime value (CLTV) analysis, and predictable revenues.

Additional data analysis can map a customer’s journey, identifying why customers are leaving and pinpointing any friction during their time spent with you and your brand.


Rapidly changing business environments and requirements can impact marketing activities. During the past year, we experienced it all: individual misfortunes (container ships getting stuck), political disruptions (Brexit), rule changes (EU VAT), to worldwide catastrophes (COVID-19 pandemic), with major upheavals on e-commerce businesses.

To overcome their challenges, it is paramount that CMOs work closely with their data analysts and CRM teams to handle these changes, utilizing external, experienced consultants to support their in-house teams as necessary, to aid and assist with developing new or enhancing existing data systems and processes or to deliver value quickly for a known cost.

In addition, professional analytics services can get marketing teams on the right track to overcome many data challenges including advanced analytics services using machine learning and data science.

Improving the customer experience with your brand can be better managed with master customer records, mapping the customer’s journey, personalizing that experience, and making recommendations for the next purchase. All of these will help towards increasing customer retention and customer loyalty.

Increasing digital fatigue is an opportunity to collaborate with consultants that have a dedicated history and experience in data intelligence for marketing. Simplity Customer Analytics can help your business improve overall efficiency, increase return on investment, and enable better marketing through data intelligence. We can enable your e-commerce business to reap rewards both quickly and in the long term.

A recent customer story is, a large bike retailer and e-tailer, which used customer data analytics including customer segmentation and market basket analysis to serve as a basis for targeted recommendations within their e-shop with the priority intention to increase upsells and cross-sells – read the case study.

Based on data from Statista, Simplity produced The State of E-commerce 2021: Secure Growth Using Data report. In this report you can get insights into the current status of the market and how the COVID-19 pandemic impacted the industry, industry benchmarks, a view into important present-day trends, and recommendations on how online retailers can leverage customer data to gain market advantage. Get the full report for free.

Our CEO, Petr Mahdalicek, is currently telling his story of how the COVID pandemic enabled him to discover ways of using 12 years of data intelligence experience, knowledge, and expertise to adapt our business to help a wider range of industries, including e-commerce and marketing. Follow and share his story over on LinkedIn.


Graham Needham
Content Editor