Big data is one of the hottest trends going and it has takers from all industries figuring out to harness the potential Big Data Analytics is going to bring into their business. Year 2014 seems to be the banner year for many E-commerce retailers to apply big data benefits to online conversion and sales strategies. Big data can be used for every size of companies to learn about their customers and inform them about their marketing programs. It helps merchants to gain deeper insights into their customer behavior and industry trends. It also helps them to arrive at accurate decisions to improve every aspect of their business including marketing and advertisement, merchandise, operation and most importantly customer retention.
Collecting Big data is not a big deal, yet storing, organizing and analyzing Big data is complex and requires expertise level knowledge and analytical tools to decipher hidden patterns and correlations that can’t be otherwise easily discern. For example an e-commerce merchant can analyze visitor’s browsing pattern, login counts, past purchase behavior and his responses to past promotions. This will naturally provide the merchant a competitive advantage by helping him know what is working and what is not.
Four ways in which Big Data Analytics can help E-Commerce retailers
- Efficiency: Big Data analysis helps e-commerce merchants understand the merchandising efforts that are ineffective and products that are not moving. Take an example of apparel that may be selling only in two color shades while a merchant might be offering five different shades. Big Data in such cases would alert merchant against merchandising effort put in this direction, thereby making them more efficient.
- Conversion Rate: Efforts put in the right direction based on the analysis provided by the Big Data will lead to higher conversion rate.
- Stimulating Purchase: Based on Big Data Analysis of past purchase behavior and the responses to past promotions will help merchant offer complimentary products that will encourage more purchase by existing customer.
- Better Inventory Management: When e-commerce merchant has an intelligent data on what is really moving fast and what is not, he can take decision on eliminating slow-moving items off his list and increase supply of fats moving merchandise.
Big Data Analytics has become so sophisticated that it doesn’t require to impinging on customer’s privacy, instead e-commerce merchant can learn about customer’s genuine tastes by harnessing an aggregate of hundreds of millions of ‘anonymised’ data points. This millions of ‘anonymised’ data points is combined with customers known influences, his past behavior and his current context to deliver highly relevant choices. This kind of highly guided choice is increasingly replacing traditional searches that throws up lots of information yet may not offer solution.
Big Data’s algorithms tap graph theory, machine learning and many other techniques is helping e-commerce merchants to not only reduce the cost of making successful sales but also making the sale itself a much delightful experience for the buyer. This increases the chance of the buyer to come back again for more or to even recommend the whole thing to his friends and family. There is no doubt that Big Data is empowering e-commerce retailers to take their business altogether to new heights by helping them to deliver their customers, serious value additions and delighting them beyond expected level of superior service.
E-commerce business with the help of Big Data Analysis can follow two strategies to achieve more efficient and customized user experience in online retail space:
- Personalization: Data collected through several marketing touch points and its analysis has a huge potential to create competitive advantages. Such as offering real time offers to shoppers based on your buying preferences and personal interaction, offering special content for shoppers and exclusive offers. Big Data not only collects basic information such as name, address and IP address, but it also creates a user profile that records web history of user activities including engagement and conversion activity within merchant’s control and indulge in activities that promotes higher lifetime value.
- Enhancing revenues through dynamic pricing: As discussed earlier, a user profile is created which records specific user’s multiple touch points and analyzes the data on the fly to generate dynamic, accurate price for an item each time. The analytics takes into account up-to-date competitor pricing, past and future sales pricing, regional pricing and the individual user’s actions to offer him unique and on-point price.
Online personalization experience and dynamic pricing model are the two of the many ways in which Big Data Analytics is here to bring big change in the world of e-commerce business for good. This is not the end of the possibilities but the beginning of it, which is all set to change the rule of the game an e-commerce sector has known since inception.
