Constant streams of data inundate E-commerce companies nowadays. Understanding and acting upon these data sets are of paramount importance. Enters Big Data. This game-changing technology allows online retailers to capture and analyze this enormous amount of information.
Paired with business intelligence software, this information is converted into actionable insights. Businesses can then use these insights to guide and optimize their strategic decisions.
7 ways ecommerce is leveraging Big Data
Here are a few ways this technology has upgraded the e-commerce landscape:
1. Personalizing experience
E-commerce stores of any size can now track visitors’ preferences. This allows product offers to be tailored and displayed according to individual habits.
Indeed, unique recommendations and promotions can be generated based on past history. This can provide a significant boost in conversion and retention rates. Plus, it uncovers great upsell and cross-sell opportunities. Amazon perfected this practice and remains the gold standard others can emulate.
2. Optimizing pricing
Pricing strategy is another vital component that data analytics has helped e-commerce with. Business intelligence software allows online stores to track surges and falls in demand.
Competitors’ prices, the cost of goods and other variables can also be monitored through dashboards. This allows businesses to identify the optimal price for each product at any given time.
3. Forecasting demand
Balancing stocks and customer demand is a delicate act. If done incorrectly, it results in unused inventory or stockouts. Analytics can streamline this process.
By using the tools it provides, companies can predict demand fluctuations. This allows them to determine the correct amount of each product to order.
4. Improving customer service
Data analysis can help e-commerce businesses provide a seamless customer experience. Business intelligence tools analyze common complaints and how convenient it is for customers to resolve their issues.
These metrics allow online stores to stay in touch with their visitors' needs and improve their customer service. Plus, this toolkit makes it easier to optimize the shipping process in order to reduce return products and delays.
5. Preventing fraud
This technology makes it safer and easier to pay online. It allows accurate analysis of payments to uncover fraud in real time. Similarly, it helps businesses detect money laundering operations and disband them at their source.
6. Predicting trends
Big data means the possibility to comb through large data sets and identify trends. With the help of forecasting algorithms, social media posts and web searches reveal the products people like and dislike.
This data can help predict future top performing items, future customer type and the marketing channels they are most responsive to.
7. Building targeted campaigns
Data analytics allow businesses to segment their traffic by demographics, geography or any chosen criteria. Based on this, online retailers can select the marketing campaign suited to the target audience. This includes pinpointing the right offer, message, and channel.
Data is useless as long as it's kept fragmented and unstructured. Big data transforms this precious data into tangible insights. It has revolutionized the entire value chain of the online retail space from marketing to supply chain management.
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