The prevalence of the internet has resulted in shoppers increasingly making purchases online. Retailers have adapted to this trend by increasing their eCommerce offerings; in 2016, eCommerce sales reached a high of $1.915 trillion.
With thousands of online transactions occurring at any given moment in time, a lot of data is generated. If harvested and utilized optimally, this data can provide a lot of benefits to eCommerce retailers. Discussed below are six ways eCommerce retailers can gain from the optimal use of big data.
What is Big Data
Here is one of the definitions about Big Data found in Wikipedia that is more relevant for this following blog post: “Lately, the term “big data” tends to refer to the use of predictive analytics, user behavior analytics, or certain other advanced data analytics methods that extract value from data, and seldom to a particular size of data set. (…) Analysis of data sets can find new correlations to “spot business trends, prevent diseases, combat crime and so on.“
This is the use of data to know what shoppers feel about particular products based on the sentiments they express online. With this knowledge, retailers can tailor their products towards their shoppers’ preferences and avoid products that trigger negative feelings in their shoppers.
Using big data, retailers gain insight into ideal prices to set for their products. They are able to compare prices with their competitors and adjust accordingly. Furthermore, they are able to tailor pricing to specific shoppers and to specific channels.
Demand for certain products can fluctuate for various reasons such as holidays or time of the year. Big data can be used to forecast these fluctuations in demand so that appropriate inventory adjustments can be made. This helps prevent situations whereby a product goes out of stock due to excess demand or an overstock due to inadequate demand.
With big data, retailers are able to build detailed profiles of each shopper. With this profile, retailers can tailor their products to each shopper. Recommendations can be made based on a shopper’s previous purchase. Also, the optimal marketing medium can be used to reach each shopper.
With big data, retailers are able to uniquely address issues that shoppers may have with their store or products. This personalized approach to resolving customer issues can result in an increased customer satisfaction.
Business process improvement
Retailers can use big data to obtain a complete overview of their business. As such, they may be able to see deficient processes that need to be improved; this data can also be used to develop optimal solutions to the areas of deficiency. In addition, big data can be used to improve the decision-making capabilities of the retailer.