Your online store is constantly generating data – don't let it go to waste. Here are some ways to harness those insights into revenue for your store.
Every e-commerce business has access to an enormous amount of data every day. From your customer behavior to the marketing strategies employed, every single action and response on your e-commerce website unravels additional data that can hold valuable information.
If you are using all this data just for monitoring the traffic to different landing pages, then you are probably letting most of the data go to waste and thereby potential revenue. There are many AI tools and machine learning algorithms that let you derive usable insights from the data you collect. By using just a few of these tools, you can do a lot to improve your business revenue.
1. Recommending products based on predictive intelligence
If you have observed the way a typical customer makes a purchase online, you will know that it is anything but predictable and even-minded. A customer can browse different e-commerce sites at the same time, often reading different blogs in between for reviews and recommendations, sometimes searching for promo codes and discounts before finally making the decision to purchase a product.
These behaviors can only be tracked properly through specific monitoring tools designed to track every single click and pause a customer takes on the website. By understanding and segmenting the customers based on these behaviors and their past searches and purchases, e-commerce businesses can make recommendations that seem attractive to the customer.
You can make use of automated algorithms to churn out recommendations for users depending on the behavior of customers from the same segmentation, the user's current searches and their past experiences with your website. Amazon is one of the best examples of an online retailer using these predictive recommendations to drive a noticeable portion of its revenue.
2. Forecasting trends and demands
Predicting the demand beforehand will save you a lot of inventory costs. H&M, one of the top retailers in the world, invested in automated warehouses backed by algorithms and data in Europe, promising next-day delivery and free shipping in response to consumers' demands. This helps it keep inventory costs to a minimum without running out of products when the demand arises.
Big data analysis will let you know the increase in demand for a particular product during specific trends, which lets you exploit the best from it and increase your sales. From following the conversations happening on social media, the increase in a number of posts for a particular trend and the recent products promoted by social media personalities, machine learning algorithms can predict the rising trend that could become the latest buzz of the industry.
For example, based on the latest attires popular with celebrities, the hits of recent fashion shows and the ease of access of the product, online clothing stores can predict fashion trends and stock up the clothes right in time to meet the trend at its peak. They can even go a step ahead to get low-priced ad spaces for the trends to boost their revenue even more.
Similarly, forecasting the accurate demand during the holidays and specific seasonal offers will save inventory costs by letting you focus on the products you'll need most. Amazon uses forecasting tools to predict fluctuations in demand based on customer behavior and historical data.
3. Offering the best customer service
Did you know that poor customer service costs businesses more than $75 billion a year? Whatever kind of product you sell, the customer should always be your priority. With many similar businesses crowding the same industries, any negligence or small mistake on your side may push your customers to your competitors and lose you a good portion of your revenue.
Customizing your website for individual customers has become necessary. You can personalize the site with product recommendations based on that customer's behavior and their historical data, helping them find what they want in short time without any fuss.
In recent times, chatbots have become a practically mandatory addition to Magento e-commerce stores. These chatbots are only effective if you use the right kind of data to analyze and provide proper responses for the customers. Customers do not need to wait for a long time to speak with a representative to solve common issues like finding out where their product is or when it will be delivered. The chatbots can give that kind of information within seconds and can be further developed to answer more questions in a human, interactive way.
E-commerce businesses have no dearth of data. If you can convert this data into usable insights, it can greatly improve your revenue.