2023.03.28
How to harness Big Data to get ahead in eCommerce ?
Why nailing the Big Data analytics game can do wonders for your business.
What is Big Data and why does it matter?
For much of the 20th century, oil was considered ‘black gold’. But in today’s digital era, the most valuable resource is colorless and odorless. We are referring, of course, to the gold of the digital age: data.
Indeed, gathering, analyzing and extracting value from large amounts of data has become the bread and butter of the most profitable companies in the world.
Yet with the exponential increase in the quantity and complexity of user-generated data, traditional processing software often falls short. That’s why mastering Big Data is among the most important challenges faced by companies today.
Learning how to leverage Big Data is especially critical for small and medium enterprises (SMEs) active in the eCommerce space, as it enables them to improve customer experience, optimize their operations, reduce costs, and boost growth.
And, while you probably won’t be able to compete with Amazon, luckily there are many ways of becoming more data-driven and harnessing the power of Big Data to get ahead of your competitors.
Crunching the numbers: three key metrics
From purchase history, to browsing behavior and demographics, eCommerce companies generate enormous amounts of data on their customers.
By analyzing this data, companies can gain insights into their customers’ preferences, which in turn helps them improve their marketing strategies, make data-driven decisions and personalize the customer experience.
For eCommerce businesses, there are several key metrics underpinning customer satisfaction and, ultimately, profitability. Here are the three main ones: Cart Abandonment Rate, Average Conversion Rate, and the Average Order Value.
1. The Cart Abandonment Rate (CAR) measures the percentage of online visitors who add items to their online shopping cart but do not complete the checkout process.
2. The Average Conversion Rate (ACR) measures the percentage of total visitors that end up taking a desired action, such as purchasing a product or subscribing to a newsletter.
3. The Average Order Value (AOV), as the name suggests, refers to the average price of products purchased on a website. It is calculated by dividing the total revenue generated by the total number of orders.
Leveraging data insights to boost your bottom line
Data analysis helps ecommerce companies boost their bottom line in several ways.
First and foremost, analyzing customer data helps companies identify high-value customer segments. Based on these insights, they can tailor their marketing and sales efforts to these segments, leading to higher conversion rates, increased customer loyalty, and more revenue.
Other ways of using data analysis to boost your bottom line include:
- Adjusting your pricing strategy,
- Cutting inventory management costs by identifying top-performing products and ensuring they are in stock at the right time
- Improving your website design and user experience
Capturing market share in a booming industry
Retail ecommerce sales have steadily grown over the past decade, and will do so exponentially in the next 5 years.
According to research published by ecommerce giant Shopify, the global ecommerce market was worth a whopping $5.7 trillion in 2022, and will be worth more than $8 trillion in 2026. And, where two years ago only 17.8% of sales were made from online purchases, by 2025, that number is expected to be 25%.
This means that by 2030, over a quarter of all retail sales will occur on ecommerce websites, presenting a huge opportunity for SMEs and large corporates looking to ride the ecommerce wave.
However, ecommerce companies will continue to face significant challenges such as how to price their products in an environment of volatile currency differences, and how to handle supply chain disruptions.
This highlights the importance of continuous learning and upskilling to adapt to changes in industry trends.
One data analytics platform to rule them all
At GEODIS, we help our customers optimize their retail supply chains by providing innovative solutions such as #GEODISMyParcel, including enhanced transport and customs clearance processes for on-time cross-border delivery.
Our solutions provide our customers with a much needed bird’s eye view on all their data, allowing them to optimize operating costs, manage inbound and outbound flows, organize last-minute product launches or store openings, and many other things.
Ready to unlock the power of Big Data for your ecommerce business?