About the eCommerce Industry
It is no surprise that the eCommerce industry is one of the fastest evolving industries worldwide. It is the only trillion dollar industry which is expected to keep growing over the years. It is one of the most dynamic business industries today. If statistics are to be believed the eCommerce industry has grown by 34% (CAGR) since 2009 and touched 16.4 billion USD in 2014. This massive growth jump is definitely attributed to the growing consumer purchasing habits and thanks to the ease that technology has given.
Since the eCommerce industry has rapidly progressed on the path of technological advancement, it is no surprise that it has now taken a course to big data, analytics, and artificial intelligence.
As an eCommerce business, think if one was able to aptly predict the consumer requirements, what could be the most competitive price for a particular product, imagine getting aware of an issue way before it surfaced. All such predictions would not only help online retailers to be forewarned but also help them in making the right decisions at the right time and also in developing strategies to take the business to the highest level.
Role of Analytics-
Analytics can be defined as a process of analyzing the data available and drawing meaningful conclusions/patterns. It means the application of statistics, computer programming, and other techniques to gain insight into the meaning of data.
ECommerce industry makes use of various tools and techniques, but analytics remain on top for the simple reason that, analytics help in understanding the consumer behavior, buying habits, helps in knowing consumer choices, and much such important information.
The following are the areas, where analytics play it big in the eCommerce industry.
- Helps in maintaining the supply chain-The most important role of eCommerce analytics is that it helps the retailer in maintaining an adequate amount of stock. Consumers shop online mainly because of convenience and better pricing. If the inventory is maintained at an adequate level, it will result in loss of sale. It also creates a negative impression on the consumer. Talking about the other side of the coin, maintaining too much inventory will take up warehouse space and increase your cost. Hence, this is where the role of analytics takes the front seat. It is with the help of analytics that retailers can strike the correct balance between demand and supply quantity.
- Price management- As the eCommerce industry is growing, there are innumerable vendors online showcasing their products. In such a scenario, it is important to play the pricing game on point. The consumers have 100s of vendors selling the same product. Ecommerce Analytics can help in analyzing the price trends with respect to sales info and determine the most competitive pricing for the product. Thus, maximizing the sale and winning customers.
- Business Intelligence- It is rightly said that “Customer is King!” The entire eCommerce business revolves around the taste, preference, and liking of the customers. With the help of analytics, one can get an overall understanding of the products in demand, pricing strategy, and so on. Predictive analytics captures the necessary customer information, latest trends and developing models which help in identifying what exactly a customer may like.
- Customer Satisfaction- Since the customer is the center of all business, customer satisfaction is the most crucial aspect. In order to retain customers, it is important to keep a track of their eCommerce experience. Even a small negative experience can trigger an immediate shift in the product. In order to sustain in the competitive market, keeping a check on the customer satisfaction level is the key. Analytics helps with data on complaints and support service requests from customers to make the customer service more efficient and user-friendly.
- Fraud Detection- E-commerce analytics play a great role in fraud detection. With the help of analytics, patterns can be detected based on customer behavior and warn when an anomalous transaction takes place. Fraud management predictive models detect the fraud before the transaction is complete. Hence, this results in reduced chargebacks and less administration time. The payment methods, browsing & purchasing patterns are analyzed by analytics models and in this way fraud is averted.
- Marketing measurement- Online marketing analytics is the very heart of a retailers business. One may shell out huge amounts in marketing through various mediums, but if the effectiveness of the same cannot be measured then it’s all gone wrong. Analytics come to rescue by measuring the ad clicks, engagement time on your site by visitors, and so on. With the help of these metrics, retailers can get a fair idea about the return on their investment and accordingly form marketing strategies for the future.
The affordability, usage, and popularity of computing power and cloud automation have given access to all business whether big/small to tap these platforms and make the most of it. The entire business world is moving towards more and more use of big data and analytics. This has completely transformed the way eCommerce industry functions, with more and more attention being diverted towards making business better each day.