How Big Data Can Improve eCommerce for Businesses and Customers
As more and more consumers shop online, businesses are taking advantage of the expanding eCommerce market to sell their products or services in a more efficient framework. This is made possible by the collection of vast amounts of information on online purchase activities, which is stored in big data repositories. In this article, I’ll discuss how big data can improve a business’ eCommerce performance and deliver enhanced services to its customers.
eCommerce and Big Data Today
Before big data usage became popular, businesses could only make calculated guesses about predicting trends, in an attempt to optimize pricing and forecast demand. Nowadays, there are big data services that can be used even by small businesses. These allow you to accurately make strategic decisions on how to operate your online sales.
To tap into the potential of the market, collecting purchase activity data from your business website is not enough. You need to be able to analyze this data in order to improve your sales and logistics. The process of examining, analyzing and finding data patterns in big data is known as big data analytics. Using big data analytics allows you to discover opportunities for generating greater revenue for your business.
How Big Data Is Improving eCommerce
Big data analytics allows companies to extract the information needed to make the best business decisions. It gives your management team the intelligence and the power to make decisions using real-time data.
By using big data analytics, you can enhance your existing product lines, develop the kind of products that your customer base actually wants, improve customer retention and gain an edge over the competition. Companies can also use it to respond rapidly to market changes, staying on top of critical customer shifts and detect other metrics that impact their business.
Big data analytics even helps you understand your own company’s strengths and weaknesses, enabling you to come up with better products, design, pricing strategies and competitive strengths.
Here are some of the ways big data can facilitate your eCommerce activity:
- Predicting trends—big data can give you the information to determine the next big thing in your niche. Data from social media posts and web browsing habits can point to current trends. With this knowledge, you can make sure your business is prepared for the new trend, decide which products to keep in the inventory and what type of customers you may have in the near future
- Pricing optimization—big data can track competitors transactions, cost of materials and logistics. It can also help with decisions on pairing products together that individually won’t sell well, and how to price them to make them attractive to the customer.
- Demand forecast—big data on historical sales can be analyzed to predict fluctuations in demand during expected special events, holidays and festivals. This will help you keep the optimal amount of stocks and avoid shortages.
- Personalization—big data on a customer’s previous transactions can help inform your product recommendation system. You can personalize your website to reflect the personal preferences and behavior of a specific customer, increasing the likelihood of a sale. This allows you to enhance the shopping experience of the customer and respond to a customer’s last-minute decision to abandon the shopping process.
- Last mile delivery improvement—last mile delivery takes up nearly a third of transportation costs. This is one of the logistics areas where big data can have a real impact on daily operations and on customer experience. The data collected from your delivery system can help you address issues such as communications problems and external factors that directly affect delivery costs (changes in oil prices, traffic jams, insurance, damaged products, etc). Real-time data collection and analysis lets managers plan ahead and provide more efficient services.
- Flexible pricing policy—you can increase or decrease prices in real time depending on current market conditions, supply and demand. You can also create seasonal pricing, taking into account purchase history, holiday seasons and the days of the week.
- Safer online payments—big data can significantly improve online security and make the use of credit card payments much safer. It can detect suspicious transactions in real time and react almost immediately to prevent the majority of fraudulent activities.
- Targeted advertising—you can increase sales by placing targeting your advertising campaigns on your website. Traditional advertising can be intrusive and irrelevant, but with the assistance of big data, advertisements can be made more precise and accurate, resulting in more purchases.
We’ve seen how big data can impact eCommerce and how it is essential for any online store. Big data analytics provides the information managers need to drive strategic decisions and offer better customer experience. Using big data, you can find ways to improve customer service and make your business operations more efficient. In the world of eCommerce, any improvement in costs and sales, even a small one, can result in big profits.