Data Analytics & Your E-Commerce Business
What is Data Analytics?
Nowadays, headlines tend to sparkle with this mysterious word combination, “data analytics”. Scientists, owners, developers – they all demonstrate a somewhat incredible ability to turn these uttered words into real deeds.
Data analytics is exceptionally good when we talk about any business industry. You can hardly imagine any successful small and medium-sized business (SMB), and for sure any large enterprise, being successful without any data analysis.
In this article, the particular niche we are going to talk about is E-Commerce.
So you are wondering how data analytics can help you benefit in e-commerce field?
First of all, you will need to realize that practically everything is done by computers today and that there is no need in denying this cool feature. In general, each thing is automatized.
The only thing is that the amount of data processed by computers is enormously huge. This is the second thing you’ll have to consider.
In order to make everything run smoothly, you need to collect this data correctly and then interpret it accordingly.
What is the pattern of my clients behaviour? What do they want more? What is the thing that they most likely dislike? All of these, and many other questions, Big Data will answer for you and bring you better sales.
Understanding the patterns is what you want to achieve. And instead of losing hours and hours (and even days and weeks) searching for the data, collecting it, and decoding, you hand in this process to the machine. This is where Big Data will help you for sure.
Big Data helps you make better business decisions and be sure that you are on a right e-commerce development path.
Descriptive, Prescriptive, and Predictive Analytics
Now let’s dive deeper into what data analytics is all about and what its options are. As any other science in general, data analytics has its own subdivisions as well. Here, we will try to talk about the following three models of data handling: descriptive analytics, prescriptive analytics, and predictive analytics.
Descriptive Data Analytics allows us transform the data received into some sufficient and useful information. As it is evident from its name, this type of data processing is useful when it comes to describing the behaviour, but it is absolutely useless in forecasting.
Predictive Data Analytics digs deeper into the data and makes it possible to make predictions based on what we have. Let’s dig a bit deeper into this type of data analysis:
- Data Analytics is a general name and form of data analysis. It is used in business to make corresponding decisions based on this data. As we already mentioned, Predictive analytics is a more specific niche allowing not only analysis but also predictions driven by the data collected.
- Consequently, this difference in form also brings a discrepancy in the structure of each method.
- Data Analytics in general is used to find certain correlations, customer preferences, user experience patterns. Predictive Analytics helps answer such marketing questions as “what will happen if I drop the price by n %?”, “how will the customer feel if we do this?” and so on.
And finally, Prescriptive Data Analytics is somewhat the peak of the mountain allowing businesses to make certain decisions based on predictions and possible outcomes.
6 Advantages of Data Analytics in E-Commerce
If you are not sure whether you need Data Analytics in your e-commerce startup, then we invite you to look at the following list of benefits which you can get:
- Better sales and demand analysis In 2019, big data analytics will become even more important in the field of e-commerce and marketing.
- If you are able to understand the behaviour of your customers, then it means that you are more likely to sell them the product they need. Big Data helps vendors and owners see customers’ desires and struggles. How to make this particular product more popular? How to make people buy more? How to increase the sales?
- Understanding the trends will help you identify which product you should order in bigger quantity for your stock and which one – less pieces. This is exactly how big data provides forecasting and business predictions.
- Better customer service and consumer analysis Data Analytics helps vendors better understand customer needs. With data analysis, it’s just like you put yourself in their shoes. You see their day-to-day struggles, their steps and concerns. Suddenly, you can see that customer support is not ideal. You may find that your product is not selling because people simply don’t see it. A lot of things could be understood at once if we relied better on data analytics.
- It is possible to say that there is hardly a company that wouldn’t perform at least the Descriptive Data Analytics. The most successful once rely on Prescriptive Analytics heavily because a happy customer means better sales.
- Misunderstanding customers’ needs is the worst impression a business owner wants to leave because this is a straight road in sales decrease. Because customer satisfaction is everything.
- This is what Big Data is useful for. It improves the monitoring process and provides thorough and detailed statistics. Relying on Big Data is a no-lose decision. It is your big helper and right hand in discovering and solving the problems in time.
- Safer online payments Big data’s centralized system guarantees all online payments to be safe and secure. Due to its ability to detect suspicious transactions and fraud, both the customer and the vendor may be sure about the deal they’re making.
- Online payments have never been that secure. Now, with the possibilities of big data, there is no need in being scared to make or receive online transactions.
- Of course, that is not 100% guarantee but this is how it is: payments are much safer with big data analytics technology.
- Flexible Pricing Policy Big data allows as well to process and analyze a ton of information to let you create a flexible pricing policy. Depending on real-time market conditions, you can either make a decrease or an increase in your prices.
- This way, you will always stay in a win situation.
- Improved mobile commerce Mobile technology and big data go hand in hand. The increase in smartphone usage is just enormous. That’s why big and successful companies understand that mobile apps are the future, and the present of e-commerce. It is much easier for their customers to have everything on-the-go than to sit patiently at home in front of their PC.
- Big data allows vendors to penetrate deeper in the relationship customer-vendor. Today, being mobile-friendly is the key advantage.
- Personalization Your main goal in here is consumer analysis. Big data is the perfect business tool for analyzing your customers behaviour and preferences so that you can tailor your platform to fit their needs. Best choice, discounts, similar products – this is all the result of big data work.
- Personally tailored recommendations are essential for improving the overall business sales. Once the client feels that the vendor understands his needs, then he is about to bring greater profit.
Big Data is a perfect e-commerce tool for analyzing your business. It helps vendors make certain business predictions, understand the possible outcomes, analyze the trends and understand customer behaviour.
This technology is a win strategy for boosting your sales and revenue.
There is no need in worry about its implementing cost as it is much more profitable than spending budget on some minor and temporary solutions.
Embracing this new technology is your guarantee of being always in trend and up to the real-time situations which demand a fast business reply.
Modern customers demand modern solutions, and Big Data is what you both need.