By using the internet, smartphones, and personal computers, human beings generate tons of data every day, consciously and unconsciously. However, managing these loads of data is not easy. Every day, firms are grappling with ways of both storing and analyzing the data they have. In this age of big data, no industry can ignore how they or their clients are affected by it. Ecommerce is one big industry that depends on big data to acquire, serve and retain its customers. With the rise of Ecommerce, online store builders are using big data to create tools to help retailers manage their inventory to serve their customers.
According to a Statista report, at the pace the Ecommerce industry is growing, it is anticipated to hit $4.5 trillion in 2021. On average, 54% of millennials are now making online purchases compared to 49% of non-millennials.
The two main types of big data are structured data and unstructured data. Structured data is very organized and easy to work with, and it offers basic information like titles and addresses. Unstructured data doesn’t have a clear format and is harder to collect and analyze. It deals with numerous archives which are retrieved from places like social media and can be textual or not textual. These statistics have an essential role in Ecommerce businesses and help to better serve the customer.
Ecommerce companies and shops which offer online services in this competitive environment attract clients through online advertisements. Big data analytical tools help to decide what advertising strategies to use in which situations, and for which target audiences. Tons of data is collected from various sources on consumers and consumer behavior.
Although gathering consumer information is great, analyzing that information is what gives Ecommerce businesses a distinct advantage. Ecommerce companies using big data analytics can apprehend their customers’ purchasing conduct in the context of current market trends. In turn, these businesses tailor their advertising and marketing without delay to customer preferences and create new merchandise that meet their customers’ needs.
Clearly, big data can have a tremendous effect on Ecommerce.
Some of the ways big data is utilized in Ecommerce are given below.
Enhancing shopping experience
The most critical role of big data is to create a better experience for the client when they use the site, and to try to meet the users’ needs. Retail websites track the number of clicks per page, the average number of products people add to their shopping carts before checking out, and the average length of time between a homepage visit and a purchase. If customers are signed up for a rewards or subscription program, companies can analyze demographics, age,
style, size, and socioeconomic information. They can use all of this information to gain valuable insights and make adjustments accordingly.
Shopping behavior analysis
Big data helps to analyze customers’ buying patterns, including popular shopping times, or even products that are often bought together. If you discover that there are two products that are often bought together, you can use that information to your benefit when placing advertisements on your site. You may also learn that there are certain times that people tend to buy more, and you can then adjust your strategy accordingly, such as if you were to increase advertisements on social media during those times.
Improves customer service
Big data can help reveal problems in product delivery, customer satisfaction levels, and brand perception on social media. It also identifies the exact points in time when customer perception or satisfaction changed. It makes it easier to pinpoint problematic areas and potential problems and fix them before they affect customers.
Personalizes customer experience
Big data is used for personalization in order to increase sales. Using big data analytics, Ecommerce businesses can establish a broad view of the customers. This enables them to categorize customers based on their gender, location, social media presence, and more. With this, companies can create and send personalized emails that are made to cater specifically to each customer’s needs. They can also use different marketing strategies, like targeted advertisements for different audiences, and launch products that speak directly to specific groups of consumers. When an advertisement or an email is personalized to promote a product in a way that interests or relates to your customers, they are more likely to click on it and eventually purchase your product. Big data allows you to give each customer a personalized experience that increases traffic and conversion instead of giving the same experience to all of your customers that will not necessarily be suited to everyone.
Secures online payment
Big data helps to recognize atypical spending behaviors and notifies customers as they happen. Alerts are set up for various fraudulent activities, like a series of different purchases on the same credit card within a short time frame or multiple payment methods coming from the same IP address.
Big data can be used to determine pricing based on different factors in order to compete with other retailers in real time. Ecommerce retailers can have dynamic pricing, which is when prices change based on variables like time, supply and demand, and competitor prices. Retailers can instantly adjust the price of different items based on all of these dynamic factors. In addition, big data allows for personalized pricing. For example, consumers with long-standing loyalty to a company may receive early access to sales, and customers may pay higher or lower prices depending on where they live and work.