Online retailers are using big data to create a better shopping experience, boost customer satisfaction and generate more sales.
If you have been reading the news, you probably saw the story on how Target was aware of a young woman’s pregnancy before her father did. It turns out that when a woman starts shopping for products such as nutritional supplements, cotton balls and unscented beauty products, there is a good chance that she is pregnant.
A lot of people feel uncomfortable at the idea of retailers knowing so much about their lives and habits. However, big data is about improving the experience that shoppers have when they make a purchase online, increasing the satisfaction rate of customers and generating higher profits. This is a huge innovation for retailers and we are only just getting started.
This is how big data benefits e-commerce companies:
1. Deliver Something More Valuable.
Amazon uses advanced tools to constantly adjust pricing. This retailer can compare pricing data from competitors and automatically adjust the price of its own products. Some prices changes more than ten times a day. With the right web platforms and plugins it’s easy. Dynamic pricing means that companies can no longer compete by simply offering the lowest price. There is now more than ever a real need to offer something more than value, which means retailers have to develop a good reputation and become the go-to option when a shoppers wants a low price and a good experience.
2. Deliver More Personalized Interactions.
Amazon is well-known for using big data to make product recommendations to shoppers. If you have ever shopped on Amazon, you have probably noticed the ‘Customers who bought this item also bought’ section. Adding this simple feature to product pages actually resulted in a 30% sales increase when the feature was originally implemented. This is a simple way to help shoppers find more products and to get people to spend more time on a shopping site.
I sell custom menswear online and we are currently working on creating a database with information on men’s body measurements and their fashion preferences. Our goal is to be able to provide a shopper with products that fit their measurement once they enter their height and weight even though we are unable to measure the individual. The purpose of this feature is to make finding the right clothes easier for the customer and help them find the right tailor-made item.
3. Make Accurate Predictions.
Gathering data on shopper’s measurements and their fashion preferences allows us to offer a better experience for our visitors. However, we can also use this information to determine which styles, cuts and even fabrics and colors are popular. This helps us keep the right products in stock and negotiate the best rates possible with our tailors and suppliers.
Companies can for instance use social media to keep an eye on trends that are relevant to their industry. This is a good way to get an idea of what people are buying. The well-known record label EMI uses data from many third-party sites and apps to get a comprehensive picture of how people listen to music and buy music in order to make better predictions regarding demand and to create more relevant advertising campaigns.
4. Reduce The Shopping Cart Abandonment Rate.
Cross-device tracking, also known as re-targeting can be used to reduce your shopping cart abandonment rate. The e-commerce platform eBay found that shoppers usually do research from three to five different devices before they make a purchase. Big data can be used to record the different steps of the buying journey and to deliver relevant content to Internet users before they complete a purchase.
5. Provide Customers with A Better Experience.
Internet users are not necessarily comfortable about retailers knowing about their private lives, but the truth is that big data will improve the experience shoppers can expect from retailers. Big data is for instance being used by CNA and other companies to look for possible frauds and protect the identity of shoppers. Credit card fraud can be prevented in real time thanks to information gathered from live transactions, geo data and social feeds.
The fact that a retailer knows some intimate details about your life can seem odd, but big data is really beneficial for companies and shoppers. Retailers can no longer focus on competing on prices alone since they have the tools necessary to creating a more pleasant, personalized and seamless experience for shoppers.