Why Use Predictive Analytics in eCommerce?

Thu, 07/07/2016 - 13:17 -- admin

Retail world changes rapidly and dramatically, influenced by two overriding factors. First one is technology. The second one, strongly affected by the first is consumer behavior. Only a few decades ago, being a retailer was much simpler and easier. The store represented one and the only place for creating consumer experience. With the rise of Information Technology, personal computers, internet, and finally mobile devices (smart phones and tablets), retail businesses faced multiple challenges in their struggle to attract and retain customers.

This changing business environment makes fertile ground for new, innovative companies to appear with more creative service to produce greater impact on consumers. These new market players understand their potential customers much better, providing more useful and scalable products and satisfying their needs in the best possible way. At the same time, some of the old-fashioned retailers, even the strongest ones, vanish, being unable to keep up with technological advancements and their psychological influences on consumer behavior. Innovations bring changes to business, to our private lives, to us as persons, characters. So, we have to talk about the importance of understanding both, the nature of innovations, and the way they  are changing us and our world. Is that the solution for the everlasting puzzle of surviving on the market? What should we all learn to become smarter and more successful in serving our customers? How can we retain our market share, and withstand the test of time? Are we adoptable to technology innovations, and rapid changes of the business environment?

These questions seem hard to answer. But, they aren't. Here's what we need to focus on, and answers will come by themselves.

Predictive Analytics - view on a mobile device

1. Be aware that consumer behavior and habits are changing

Technology affects consumer behavior vigorously. Modern consumers are technology dependent, and so are retailers. It is all tightly connected. Nowadays, whatever we do, it is somehow connected with advanced electronic devices and connections between them. We work on computers, communicate over mobile phones, search for information and advice on the internet. We are "connected" all day long, from different devices, wherever we are. Companies in the retail business have adopted to this interconnected world by implementing eCommerce websites. Still, not all of them are equally successful. The competition is strong. Who will provide better service to customers? It seems like there's more to it.

2. Focus on consumers and their behavior

  • Consumers research online, but still like the experience of a real store. Why? It is more convenient. With abundance of offers on the internet, consumers find it easier to collect all the necessary information to support their decision for acquiring certain products or services. They can read reviews, see the experiences of other people, compare prices, and finally go to the store to feel the product before they buy it. This is why retailers combine their sales channels into an omnichannel.
  • Consumers use mobile devices. At work, at home, on vacations, during recreation, while learning, and of course shopping. There's over 4.5 billion smart phones today! Is it then justified to optimize Online Stores for best performance on mobile devices? Or, is it wrong not to? Believe in numbers!
  • Consumers expect to see advanced features in the online store about stock availability. They want to know is the product available for purchasing, how fast they can receive it, and where to go to try it and see if it fits them? What colors and sizes of the product are available? How the product differs from other products? Are there reviews, comments, ratings to help them decide?
  • Consumers seek for best shopping experience. Why shouldn't they? Consumers are becoming picky. They have options to choose from. It is up to retailers to understand how consumers think and, according to that, make their Online Store the first pick for their potential customers. The successful Online Store incorporates great features for creating unique shopping experiences, attracting and retaining customers. It is visually appealing, psychologically impactful, and technologically progressive. Did I mention mobile friendly? Of course!
  • Consumers seek personalized products and services. Personalization is one of the key benefits an Online Store may provide to a customer. Sales process itself is customer focused. Customers like to think they are special. They feel great when they know you value them. This is how one time buyers are transferred into loyal customers, ones who are of greatest value.
  • Consumers are influenced by social connections and opinions of other people. Why make the decision alone? It is smarter to ask friends on social networks, read comments and reviews, consult forums or wiki's. Prior to purchasing a product or service, modern consumers use modern ways for supporting their shopping actions.
  • Consumers are spoiled! True. But, consumers are not to blame. Modern technology provides them with the opportunity to select best products and services to suit their needs. On the other hand, eCommerce / Mobile Commerce owners aim at understanding those needs. Predictive Analytics, besides analyzing competition, serves as a valuable source of information for predicting consumer behavior, and support for making the right decisions.
3. Focus on technology
  • Among other significant changes in retail business, The Rise of Mobile Devices has a special place. No other technology had such a strong impact on changing consumer behavior and habits. Because of it, eCommerce turned into Mobile Commerce, and Online Stores turned into Mobile Stores. Simply to give consumers the freedom to shop from any device and any place.
  • New players on the market, young and dynamic companies with enthusiastic, digitally educated staff, offer original products and services that are more sophisticated, tailored according to customers needs and with lower prices. They are making strong impact on customers with outstanding buying experiences. What do they know better? Among other tools, they use Predictive Analytics. They know their competition and their customers. They understand how technology has changed our world. And they are always one step ahead!
  • Established retailers use Predictive Analytics too, to better understand competition and customers, and to retain their market position against competition that is stronger each day. They accept technology changes and adopt to them. Today's Major Brands invest a lot in gathering valuable information from social media, analyzing prices and marketing actions from the competition, and measuring which sales channel brings the most traffic and income. Only this way they will assure a stable position on the market, and possible growth.

Predictive Analytics

The future of Online / Mobile Commerce, which means the future of retail, is reserved for companies open for learning and adopting to new business environments, and the changing world of new technologies. One of the most sophisticated new technologies is Predictive Analytics. This introduction leads us further to a full, detailed story about how Predictive Analytics work, in our next article...





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