Since its inception, the e-commerce industry has been evolving constantly. The recent technological innovations have undoubtedly accelerated its growth and it is on its way. In the last few years, the e-commerce industry has been significantly influenced by the increase in mobile internet usage, big data and the internet of things (IoT). The most noticeable and positive influence is that of big data as it is now being used in making crucial decisions, not just in e-commerce, but in other industries as well. E-commerce companies such as eBay and Amazon have used big data to identify and resolve problems, assessing the performance of their business and making steps for further improvement.
Big data can be used for efficient tracking of transactions, sales analysis and for forecasting demand and supply. There are numerous ways an e-commerce business can benefit from the use of big data. Here are a few of the ways big data has enabled sellers to increase their return on investment:
Delivering a personalized customer experience
There is cutthroat competition in the e-commerce industry due to which customer satisfaction has become a priority for the sellers. This is where delivering a personalized shopping experience can be immensely helpful. Analysis of big data can provide insight on demographics and customer behavior, which can be used to deliver a personalized experience. For instance, the data obtained from the customers can be used to draft buyer-specific emails for promotional campaigns.
Supporting dynamic pricing
One of the important parameters of e-commerce success is pricing as customers tend to buy from websites that offer the best prices. As there is stiff competition in the market, it is necessary for sellers to price fairly. Dynamic pricing is the ideal approach; it responds to external factors such as competitors’ prices and consumer demand. Big data analytics can prove to be a reliable tool that can aid e-commerce sellers with dynamic pricing.
Helping enhance business performance
E-commerce companies can boost their business performance through integration of big data technology in their operations. For instance, any eBay or Amazon market research tool can help sellers in understanding the demand levels of a product, recommended market price, expense breakdown, and its estimated profit.
Similarly, there are also tools that help in tracking shoppers’ journey to help drive relevant purchases and content. Cross-device tracking is being used for re-targeting buyers in order to reduce cart abandonment and increase conversion rates. The data also serves as a feedback tool for e-commerce sellers because it helps them understand why customers are not completing their transactions. They can then take the necessary steps to address the issue.
Facilitating smart inventory management
An e-commerce business can also see an improvement in its inventory management thanks to analytics. One of the biggest challenges that e-commerce sellers have to face is stocking the right levels of inventory. When there is too much inventory, it can lead to high storage expenses and there is also a risk of redundancy as the goods may not be sold at all. On the other hand, not having adequate levels of stock means that goods might not be available when required by customers and this may push them towards the competition.
Here again, the big data predictive analysis through eBay and Amazon market research tool and various other tools can aid e-commerce companies in maintaining the optimal levels of stock. They are able to predict booms in demand according to seasons and time periods thereby helping an e-commerce business make smart decisions about its inventory.
Thus, big data can play a very notable role in boosting the ROI of an e-commerce business.