How Big Data & Analytics is impacting the e-commerce world
Big data is simply large datasets in which are stored and further analysed to find patterns and trends relating to the customer’s interaction. These create insight into the businesses strategy and their decisions moving forward. For example, big data may be used in the restaurant industry to see how popular certain foods are on the menu, knowing this information will allow them to prioritise these foods and remove the others which are less popular. This method of analysing big data through technology saves time and is much more efficient than working it out by pen and paper.
What is analytics?
Analytics is the production of patterns found within data often represented by numbers of charts. Big data automatically creates analytics which is representative of their target market, allowing precise numbers and patterns to be identified to steer the business into the next big thing.
Predict future plans and operations
Using big data allows for a greater understanding of your business. This allows you to monitor inventory, forecast demands and set up the best prices. This is all done by analysing these trends and patterns and seeing what consumers will actually purchase.
For example, if looking at your big data analytics from last summer and you see that you have a large amount of traffic on your website but little purchases, then decreasing the price of your product may increase your products sold resulting in more income during the summer months
Additionally, big data allows information from both social media and forums to be collated together and analysed in regards to services/products in which you are selling. This, therefore, allows for others opinions to be read and a general review of the products to be understood. Using this together with analytics of people searching for the product will allow for further trends and patterns to be identified. This allows the business to prepare in time and stock up on the items in which are trending.
Identifying fraud and mobile commerce
Big data is used throughout the world of online payments and e-commerce. As discussed by Signalboosters, with the increase in mobile commerce in the 21st century, it is unsurprising that the majority of customers now prefer paying online through their mobile than any other method whilst purchasing items online. So, where exactly does big data come in? Big data allows fraud to be easily identified due to patterns in which it creates. This, therefore, allows for safe online shopping experience for both the business and the customer. The likes of Paypal are particularly popular due to not having to enter bank details, the increased security and the ease of sending money with just an email address. Furthermore, Paypal is connected to the majority of all major retailers both online and offline, with a high portion of small businesses also allowing this payment method.
You may be wondering, how does big data detect fraudulent activity through mobile commerce and e-commerce in general? Big data allows the location of payment methods (credit cards) to be determined. If for instance, one location shows an increase in payments either through the same card or lots of different cards, this could be a case of credit card fraud. This, therefore, would allow the business to cut them off and also contact the police to further investigate the issue.
Predict the customers next move
The use of big data, especially through the use of micro-moments will allow for the customers next move to be much better predicted than before. For example, if you own a fashion e-commerce website and a trend within customer searches if for ‘sundresses’ then you know that selling more sundresses is likely to increase your profit. This is often done on their smartphones through the use of mobile commerce.
Using big data will allow your services to be improved. This is because of the collation of both data throughout social media and forums regarding your business and the use of your current sales will determine how sufficient your services currently are. For example, if many reviews are left online stating how expensive your product or service is, this may be an indicator that your prices are too high compared to competitors, or that your target market is simply not willing to spend that much money on your services (potentially indicating that the quality of the product is not sufficient in relation to your competitors). Either way, this allows you to review your product and or service provided and make adjustments in order to suit the target market.
Big data will allow you to analyse your best selling products whilst being able to see what is not being sold. This may be due to products being priced too high. Through the use of big data, data can be gathered regarding prices of your products, finding what others think about them with potential users discussing the pricing. All of this information can be gathered together in order for you to make a justified approach on your pricing strategy, whether to increase certain products, decrease certain products or to discontinue a product completely.
Creating a more personalized approach
Big data and analytics allow for a more personalized approach to be developed. How you may ask? Well, big data allows for you to see what your customers and potential customers like and don’t like about either your website or your products, with reviews left on social media, forums and the site itself as well as analysing data patterns and history from the customer. This, therefore, allows you to tailor your website to suit a wider amount of customers, whether this is changing the layout, altering prices or changing a specific product line.
Increase in sales
To summarise, the use of big data as covered above is bound to help your e-commerce business. With big data and analytics providing an overview of your current e-commerce situation, you can tailor and make adjustments to suit your customer’s needs, in-turn increasing your sales and your image across the e-commerce world.