This is the age of technology and information. And every aspect of our lives is captured digitally and turned into data. It’s at the heart of the modern technology that drives businesses of the 21st century. Today, data is available in abundance from a wide variety of sources. An IDC report estimates that the total volume of digital data will grow by 61%, reaching 175 zettabytes by 2025. Big data helps businesses navigate their way through this jungle of data. They can extract relevant information, and analyze it to optimize all facets of business; from the operational process, logistics to budgeting and marketing. It has been a game-changer for many industries across the world. The e-commerce industry is no exception.
For e-retail businesses, insight-rich data plays a pivotal role in understanding customer preferences and expectations, ensuring enjoyable shopping experiences, and generating revenue. And it has emerged as the latest frontier of innovation and competition in the e-commerce landscape. Here’s how big data is impacting the booming industry:
Personalized Shopping Experience
Today’s shoppers, especially the ones who shop online are much more sophisticated than their forefathers. Businesses need to go the extra mile to meet their expectations. This is where Big data comes into the picture. It can reveal the taste and preferences of individual customers based on how they interact with e-commerce websites and apps, how they engage with a brand’s social media handles, and their shopping history. With a nuanced understanding of a customer’s personality, lifestyle, needs, and wants, e-commerce companies can provide a richer, more personalized experience through tailoring product recommendations, offers, and discounts.
Positive Brand Perception
Today, with countless online brands and products, brand perception is more important than ever before. It’s crucial to measure and enhance it as much as possible. Big data detects how a brand is perceived on social media, gleaning valuable insights about how a product or service resonates with potential buyers and why. Businesses can know exactly when and why shifts in brand perception occur and alter their brand strategy accordingly. With a well-defined brand strategy based on insightful data, they can take brand perception from negative or neutral to positive or create an even more favourable image, leading to increased sales and revenue.
Optimized Supply Chain
By harnessing the power of data, e-commerce companies can optimize supply chains. They can also ensure receipt of the product at the right time at an economically feasible price. When an order is placed, big data identifies the nearest supply centre, finds the fastest mode and route, allowing smooth and timely delivery while minimizing handling and shipping costs. Big data can also help with finding ideal locations to set up warehouses and transport hubs, stock inventory planning, and fleet management. It can also reveal delivery bottlenecks, areas of ETA breaches, high returns, and fraudulent orders.
Highly Targeted Marketing Campaigns
Big data also helps businesses create an effective market segmentation strategy. It can identify residential societies, businesses where the target audience is present based on customer demographics and purchasing patterns like affluence, spending capacity, income-class, ethnicity, age, gender, etc. With this knowledge, brands can launch highly targeted marketing campaigns, resulting in increased engagement, conversions, and revenue.
Increased Customer Satisfaction
According to Business, gaining new customers costs 5 to 10 times more than selling to an existing customer. On top of that, loyal customers spend up to 67% more than new customers. So, with ever-increasing customer acquisition costs, keeping customers satisfied and loyal to the brand is crucial for online businesses. Big data can gauge the satisfaction levels of individual customers through surveys and feedback forms. E-commerce companies can use it to make necessary changes to their sites, apps, and train employees to deliver efficient and dynamic customer service.
Big data has transformed how the e-commerce industry operates and with time, its importance will only grow. With increasing competition in the online shopping space, businesses must keep up with seasonal influxes, emerging trends, and changing customer tastes and preferences. And it’s only possible by collecting data, turning it into relevant information with the help of data analytics, and creating actionable strategies based on that. So, if e-retailers are to survive and thrive in this day and age, leveraging big data is essential.