Big data is the massive amount of information that flows into a business every single day. It comes from countless sources and in many formats, including numbers, text, images, audio clips, and more. The flow never stops, either.
This data is invaluable to businesses, especially in ecommerce. It helps guide decisions about everything from inventory and customer service to marketing and site optimization.
What Does Big Data In Ecommerce Look Like?
Social media posts, online and in-store purchases, smart plugs and devices in our homes, mobile phones and tablets, streaming services—the list of data sources that feed big data is virtually endless.
But even though the sources are diverse, big data can usually be categorized in two ways—structured and unstructured.
Structured data is data that is generally easier to collect and analyze. This includes things like credit card transactions, bank statements, retail sales information, customer demographics, and inventory. Anything that can easily be stored and managed using traditional data processing methods, like a spreadsheet or database, is considered structured data.
Then there is the kind of data that is harder to categorize but is equally valuable. Things like emails, social media posts and comments, photos and videos, SMS texts and WhatsApp chats, are all considered unstructured data. Their commonality is that they require more complex technology to process and analyze.
Both types of data are invaluable, as they help businesses make sound decisions that improve performance, enhance the customer experience, and positively impact the bottom line.
Capturing and analyzing all this data can be done with a variety of tools.
- Software like customer relationship management (CRM) and enterprise resource planning (ERP) capture and analyze data.
- Scripts scrape websites to extract information.
- Application programming interfaces (APIs) can retrieve data from third-party sources.
- Internet of Things (IOT) devices like wearables and smart speakers like Amazon Echo automatically collect and send data to the cloud.
- Mobile devices capture data like location, usage statistics, and user-generated content.
- Monitoring tools analyze social media channels for trending topics, mentions, and sentiment analysis.
There are as many ways to capture big data as there are sources of big data. Businesses pick and choose the methods that best serve their needs.
Ecommerce brands are well-positioned to optimize their own performance using big data, whether collected from their own sources or elsewhere.
- A customer’s purchase history helps guide personalized marketing efforts, product recommendations, and even inventory management.
- Data on customer demographics and psychographics helps segment your audience and craft targeted marketing and offers that resonate with the recipient.
- Sentiment analysis derived from your own call center data, social media channels, and review sites can reveal customer satisfaction or pain points and identify which products are popular (or not).
- Search data information helps guide SEO strategies, content creation, and even product improvement efforts.
- Customer experience data from emails, recorded calls, and chatbot interaction helps identify recurring issues and opportunities for improvement.
Leveraging the power of big data is non-negotiable for ecommerce companies today. It is essential for success.
But going it alone is impossible. Here are some of the most widely-used tools out there that help ecommerce businesses understand and use big data to stay competitive.
Google Analytics is probably the most well-known tool for anyone that manages a website. With it you can track website traffic, user demographics and behavior, and conversion metrics. All this data helps you to understand how site visitors interact with your site. It also identifies areas that could be improved to increase site performance.
If you’re running your ecommerce site on Shopify, then Shopify Analytics is a tool you should be using. It provides detailed metrics on your store’s products, inventory, orders, and customers. It’s easy to use, comes preinstalled, and just takes a few clicks to view reports that can help you make informed decisions.
HubSpot is one of the best marketing automation software tools available today. It has some pretty impressive data analytics features to help crunch and understand marketing information. It will help you go deep with analyzing qualified leads, identify wins with your marketing campaigns, and find areas of improvement for better ad results. HubSpot also helps drive traffic to your site through website performance analytics. The best part is that there is a free version of HubSpot, so even the smallest ecommerce brand can leverage this power.
Tableau is a powerful tool that can process hundreds of thousands of data points and turn it into understandable and usable visual reports. It brings all your data sources into one centralized space to produce charts, infographics, dashboards, heat maps, timelines, and more. It also has a really easy-to-use drag-and-drop interface which is intuitive even if you’re just starting out with data analysis and visualization.
If you’re a small ecommerce biz just starting out, a smaller yet still powerful tool is Cluvio. It lets you design custom analytic dashboards, add your own KPIs, and create custom filters that let you dive as deep as you want to go into the data. You can also set up conditional alerts that let you stay on top of unexpected changes or developments.
These are just a few of our favorite data analysis and visualization tools. There are countless more for every size ecommerce business at every stage of growth.
5 Ways Small Stores Can Use Big Data In Ecommerce
Smaller ecommerce stores might feel overwhelmed by the idea of incorporating big data into daily operations. The key to success is to identify the areas where big data can make the most impact.
Here are five things to focus on first.
1. Inventory management
Every ecommerce business owner knows that staying on top of inventory is critical to success. You want to keep just enough items in stock to avoid selling out or being stuck with unwanted products.
Big data can help dial in your inventory management in several ways.
RFID tags and IOT sensors can help track inventory levels. You can tie that information into your ecommerce platform. This means that when a customer is shopping on your site, they’ll have current information about how many of that item are in stock and available to purchase. You can also set up automatic reordering when quantities fall below a specified threshold, so your stock stays replenished.
Historical sales data from your POS system can help identify top-selling and poorly-performing items. Tools like RapidMiner provide predictive analytics that can anticipate future demand trends. You can use this information to make informed restocking decisions.
Dynamic pricing is another area where big data comes into play. All the top ecommerce platforms, like Wix and Shopify, have built-in automations to enable dynamic pricing. When your prices adjust automatically to account for customer demand (or lack of it) and other factors, you’re less likely to have inventory management issues.
2. Personalized shopping experiences
The customer data you have from past purchases, browsing history, and user preferences is a goldmine for implementing personalized marketing. You can suggest recommended items, create audience segmentation, and craft highly personalized marketing outreach campaigns.
Targeted and automated email campaigns can be sent out to specific segments of your list. These can be tailored to the specifics of each segment, resulting in more interest and higher sales.
Repeat visitors to your website can be presented with suggested items based on past purchases or demonstrated preferences. Amazon does a great job with this, as do many other big-name online retailers.
But it’s not just something for the big players. Your ecommerce platform will usually offer built-in functionality or plug-ins you can install to turn this sort of functionality on for your site.
You can also use tools built into the social channels you use to help generate targeted ads that resonate with customers. Facebook Ads Manager, Instagram Ads, and TikTok for Business all offer this and rely on big data to do it effectively.
3. Customer service improvement
Keeping customers satisfied is really important. It’s far easier to generate another sale from an existing customer than it is to find and nurture a new customer.
There are many big data tools out there that can enhance the overall customer service experience, either directly or by giving you the data you need to make process improvements.
Zendesk is one such tool. It is a widely-used customer service platform that compiles data from all ecommerce channels—email, chat, social, and phone calls—and synthesizes it into understandable reports. This allows you to, among other things, quickly identify common customer inquiry themes and fine-tune customer support to address them.
Zoho Desk is another popular option. With it, you can gain insights into what’s working in your customer service department and where you can make improvements to boost performance. It also uncovers customer satisfaction through sentiment analysis. This is another way to resolve common issues and boost satisfaction.
You can also use big-data fueled, AI-powered chatbots and virtual assistants to further enhance the customer experience. Common questions can quickly be answered without human intervention. This means help is available 24/7, making customer service a round-the-clock offering on your site.
4. Website optimization
Building an ecommerce site is the easy part. Fine tuning it for optimal performance and a superlative customer experience is where you need to put in the work.
You can’t fine-tune, though, if you don’t understand the data.
Tools like Google Analytics and Crazy Egg are a great place to start. These tools help you understand how customers interact with your site, which pages they visit most, which they avoid, how long they spend on each, how quickly they exit the site, and more. All this data is powered by analysis of big data.
Armed with this information, you can optimize site layout and design. You can also add more of the kinds of content that your visitors want, and eliminate the things they’re ignoring.
There are countless other tools out there that rely on big data to help you understand and optimize things like the user experience (Content Square, Mixpanel) and the user journey (Salesforce Journey Builder).
All of these are valuable options to ensure your website is performing at its best.
5. Fraud Prevention
Ecommerce fraud is real and has a significant impact on every company’s bottom line. Big data is incredibly helpful to automate fraud detection and prevention efforts.
Tools like SAS Fraud Management and Riskified analyze common transaction patterns and monitor site activity to detect anomalies. When a potentially fraudulent activity is detected, the transaction can be flagged and declined before the fraud occurs.
These tools rely on artificial intelligence and machine learning to develop and run algorithms based on past fraud experiences to help predict and stop future fraud attempts. Fraud is significantly reduced when ecommerce businesses implement tools like these.
