Whether you use Audible’s personalized suggestions to find your next summer “must-read” or Amazon to remind you to reorder laundry detergent just as you run low, big data and machine learning at work are increasingly a part of our daily lives.
And it’s increasingly important for online merchants, too.
Big data enables businesses to analyze and generate insights from data sets that may be too large and complex to analyze manually. And thanks to the plethora of data-generating Internet of Things devices, mobile devices, wireless networks and more, the amount of data available to businesses keeps growing. According to Andreas Weigend, a former executive at Amazon, more data is being created in one day than that which was created by all of humanity before the year 2000.
More than just a collection of reports, spreadsheets and servers, big data can have a profound impact for e-commerce retailers by helping them make smarter, more impactful business decisions – so long as the data is gathered and analyzed correctly.
Here are eight ways retailers can benefit from leveraging the power of big data today.
1. Predict Trends
No one wants to be left behind when the “next big thing” emerges, and this is especially true for retailers. Merchants with the ability to harness the power of big data – via data mining, artificial intelligence, machine learning, and deep learning – can build sophisticated trend forecasting algorithms to predict the newest trends that will impact their businesses.
Identifying new trends enables merchants to make better decisions across multiple aspects of their businesses, including finance, sales, operations, and marketing and get that next hot item on their virtual shelves before their competitors do.
2. Understand Shoppers’ Behavior
E-commerce retailers can also use big data to better understand their customers’ shopping preferences — including what time of day they like to shop, the products and brands they prefer, and the frequency with which they reorder. Then they can use that data to develop better business strategies and marketing approaches.
Collecting this data doesn’t even require complex technologies. In early 2019, HubSpot Research partnered with Survey Monkey to gather on consumer social media and buying preferences. An astonishing 2,700+ individuals participated. Imagine having the opinions of that many consumers, right at your fingertips?
3. Optimize Pricing
Merchants have historically looked to competitors to help determine how to set prices, but that’s changing with technology. This is good news, as this manual process can be unmanageable for businesses that stock thousands of items. Instead, using big data, e-commerce retailers can now create accurate pricing strategies for each product.
A recent article in Big Data Made Simple shares the interesting history of predictive pricing, in which businesses use machine-powered algorithms to process historical data around pricing and sales dynamics and establish a recommendation engine that identifies how products and services should be priced to remain optimally competitive.
4. Predict Demand
When shopping volume increases thanks to holidays or back-to-school shopping or even just a big sale, online retailers need to be ready. If they find themselves short-staffed or low on product during the big sales periods, will be unable to fill orders and dealing with unhappy customers.
While businesses have generally used their gut instincts (“I bet they’ll like blue sweaters more than orange ones”) or general rules of thumb (“Everyone shops more during the holidays”) to forecast demand, those methods have proven to be less than reliable. But by using big data, merchants can analyze their historical data and make more accurate forecasts.
5. Improve Personalization
Shoppers love seeing collections that have been curated just for them, and even just calling them by name and offering deals personalized to their shopping habits can result in bigger shopping carts and increased conversions. Big retailers like Amazon are using big data to fine-tune their customer-centered approach, predict what a customer is going to need — and when they’re going to need it — and simplify the customer journey. And it’s paid off.
6. Deliver Exceptional Customer Service
With more than 30% of Americans saying they’d be willing to switch companies after a single instance of poor service and with so much competition in the online marketplace, one thing that can set retailers apart is the customer service they deliver. Not only does it improve customer satisfaction, but it also helps to improve long-term customer retention.
Analytics reports can help optimize the customer service experience by identifying strengths and weaknesses and can help online retailers deliver the experiences that will keep customers coming back. Data also gives critical feedback to merchants, showing how fast their customer service responds to and resolves customer service issues while also giving insights on how to improve existing products or services.
7. Increase Sales
With cart abandonment one of the biggest problems e-commerce merchants are facing today, big data can play a crucial role in increasing conversions and generating more sales. But by delivering a top-notch shopping and customer service experience using big data, e-commerce merchants can increase the likelihood customers will make bigger — and more frequent — sales.
8. Facilitate Online Payments
With an increasing number of transactions being conducted on mobile platforms, merchants need to ensure these platforms are keeping customers’ information safe and secure. Big data can even help here by identifying fraud-related patterns and activities and flagging any out-of-the-ordinary transactions, increasing customers’ confidence in purchasing from a retailer’s site. And by integrating payment functions into one centralized platform, retailers can reduce fraud risks while also understanding their customers better.
At ClearSale, we’re also leveraging the power of big data, statistical intelligence and human expertise to offer e-commerce retailers a precise balance of fraud protection and maximized sales. As you look to big data as a way to improve the customer experience and increase profits, contact one of the experts at Clear Sale to learn how you can use it to reduce fraud, too.