Commerce has come a long way from the days of the Model T, when customers could have any color they wanted…as long as it was black. As commerce evolved, the range of options increased, but customers still had to choose among mass-produced items. Fast forward a few years, and a few forward-thinking retailers started offering personalization – if you bought in bulk.
Thanks to online shopping, today’s customers want real personalization, not just in the products they buy, but also in the messages they receive. They don’t want to get emails about great deals on heavy winter coats if they live in south Florida. They want and appreciate recommendations on products that fit their lifestyle. And they prefer to buy from businesses that know they’d rather have a 20% off coupon than free shipping.
Thanks to Big Data, online retailers can give customers what they want, if only they knew how. A survey by Monetate states that 95% of organizations’ data goes untapped. Small businesses in particular are leaving money on the table due to budget constraints, inability to recruit top IT talent, and a lack of awareness of what Big Data can do.
But those businesses who have taken the plunge are experiencing great results, such as a 49% growth in revenue.
So let’s take a look at Big Data 101 for Ecommerce: what retailers need to know about Big Data and personalization.
Just what is Big Data?
Big Data combines information from many different sources and uses that to product consumer behavior. Those sources include:
- Information customers provide when making an online purchase.
- Purchase history, email open rates, click-through rates, web site visits, time on site, discarded carts, and so on.
- Things customers say about the product or company in Tweets, Facebook posts, etc.
- Local data on things like weather, community events, or the start of school.
What does that mean for ecommerce?
Ecommerce businesses can use the insight offered by Big Data to reach out to customers with personalized offers. For example, a customer who bought a lot of baby items a year and a half ago probably has a toddler. If that customer has recently moved from Florida to Maine, she or he might appreciate receiving an offer for a discount on items related to “baby’s first snow.”
A customer who just graduated college and accepted a job across the country – both of which you can find out from social media – might appreciate offers from local businesses. Knowing the new area’s climate can help businesses further segment with offers that are appropriate for the area. Add in another layer – the customer’s history of social media posts on things like sports and hobbies, or whether the customer has ever purchased pet supplies – and the segmentation becomes even more precise. In a nutshell, Big Data lets ecommerce companies capture and use a vast array of data points to provide more personalization than was ever before possible.
Is it difficult?
It’s not so much difficult as it is different. Traditional methods of analysis aren’t sufficient for handling either that much data or for unstructured data – the kind that doesn’t fit into neat little boxes – like social media posts. It takes a capital investment as well as an investment in talent – both in IT and in analytics. That’s why many companies choose to outsource it. Whether you use a provider or handle it internally, Big Data is a tool that promises to have an incredible ROI when implemented.
Infographics by Monetate.