5 Benefits of Big Data for E-Commerce Companies
Data is a fixed constant of the digital world and it is growing at a rapid pace every second of the day. Is statistics are to be believed, more than 2.7 zettabytes of data exist today and this is bound to grow by 180 zettabytes by 2025. Now every company that leverages this data stands to take advantage to drive conversions and sales in their favor.
Big data is a term that has been constantly evolving. In simple terms, Big data is nothing but a large amount of structured and unstructured data that can be used to mine information. This can be gathered from a wide number of sources ranging from the social network, digitized images, sales transaction records etc. As these data sets are large and complex, traditional data processing isn't feasible to process them. Big data brings into picture big data analytics which is the strategy of analyzing large volumes of data.
One may ask what big e-commerce companies gain from big data and why it is important for them. Listed out below are some reasons:
- Higher sales of 73% for companies who use predictive analysis in comparison to those who don't.
- An increase of 60% in business margins and 1% improvement in labor productivity for retailers making use of big data.
So how do big e-commerce giants benefit using big data to their advantage? Here's a look at 5 different benefits:
1. Understanding customer journey and behavior:
Big data is extremely helpful in tracking a customer's journey from their entry to their final exit. Online shoppers may not even realize that every click of theirs is being monitored and every purchase that has been made by them is constantly monitored. This collected data is then used to divide customers into different categories like demographics and purchase patterns. Search and purchase information of customers three to four months can yield useful insight and provide a deeper understanding of the current trends and the actual demand for products. This is useful for sellers as they can use this data to stock their inventory and optimise their shelf space effectively.
2. Personalising offers and recommendations:
E-commerce companies make huge investments to increase their customer base by attracting new customers to their websites. This is where big data comes into the picture. It matters how data is being captured, analyzed and converted into smart business decisions. "An effective use of big data ensures that an e-commerce company stays on top and their investments on campaigns, referral programs, and coupon materialize in bringing new traffic to websites" said Swapnil K., marketing analyst of VoucherBin.co.uk.
This can be all the difference between being a market leader or a runner's up competitor.
E-commerce companies now are making use of recommender systems to generate recommendations from individual users based on their past searches and purchases. This helps in providing a richer customer experience and improves the seller's ability to increase sales.
3. Taking customer service to another level:
Customer feedback is now one of the most important tools for e-commerce companies to improve its business. A poor customer service will ruin shopping experience and a customer straight to the competitor's hand. One can safely assume that the growth and profitability of a company are directly proportional to the number of satisfied customers in its arsenal. Analyzing the report data through e-mail messages, social media complaints, and online self- services help provide actionable insights that better customer experience and also helps improve the existing products and services of the business. Companies now are coming up with Real-Time Big Data Analytics (RTBDA) that will help result in improved sales for the business by detecting and solving issues at the time of purchase itself rather than post-purchase.
4. Reducing cart abandonment rate:
E-commerce companies are now coming up with cross-device tracking or re-targeting to reduce the customer's cart abandonment rate. E-bay in its annual survey found that shoppers do research from three to five different websites and devices before they actually make a purchase. Big data can be helpful in this endeavor to record different steps within the buying journey and delivering relevant content to users before the complete their purchase online.
5. Making accurate predictions:
As we have already understood from above points, big data can gather accurate data on user's measurement and preference to offer them a better experience. However, a more detailed information on a customer's taste can also be determined. These accurate data can be used to determine personal tastes likes height, color preference etc which would further help e-commerce companies keep the right products in stock. Companies nowadays are making use of social media platforms to keep an eye on the latest fad and trends doing the rounds among people. This is a good way of understanding what people prefer and are buying which would further help in making useful advertising campaigns in the future.
Big data is in fashion for e-commerce giants and whoever makes the best use of it is will have an upper hand over its competitors.