It was not all that long ago when ecommerce was little more than a novelty – the Dot Com Bust of the 1990s had decimated the Internet, with businesses large and small failing and vanishing. Today, things have changed. The Internet has become the go-to solution for consumers and businesses seeking goods and services. However, that success has come at a cost – increased competition and limited visibility. The good news is that ecommerce businesses can leverage predictive analytics to drive success.
One way that predictive analytics can help drive your company’s ecommerce success is by improving your ability to upsell. Predictive analytics allows you to collect different versions of a product that your customer is considering and recommend higher-end options. Ideally, this is because those other products are better suited to your customers’ needs, have better reviews, or are otherwise higher-quality than the first product they were looking at. A notable example of this can be found with Amazon and the company’s comparison charts that allow consumers to look at multiple products within the same niche and choose the one that is best suited to their needs.
Cross-selling is an important way to add to your bottom line while also delivering greater value to your customers. For instance, a customer buying running shoes might benefit from being cross-sold extra laces. A customer buying men’s dress shoes might be cross-sold a tin of polish to keep their new shoes immaculate. Predictive analytics can drill down into sales data and determine which products will do best as cross-selling suggestions. Again, Amazon is a good example with the company’s “also bought” suggestions.
Product Research and Development
Predictive analytics can also play a central role in product research and even in product development. For resellers, finding high-quality products that appeal to your audience, deliver the quality and functionality they demand, while also meeting the needs of your bottom line can be challenging. By using predictive analytics, ecommerce companies can make decisions based on accurate data rather than on sentiment or guesses.
The same applies to product development. Predictive analytics helps ensure that you are able to develop a product that addresses the key pain points and challenges of your audience. Again, this helps to ensure that you are making critical business decisions based on accurate data rather than sentiment or guesswork.
Improved Pricing Strategies
Online shoppers are nothing if not price sensitive. They have little in the way of retailer loyalty, either. If they can find the same product for less through another ecommerce company, and everything else is equal, they will most likely buy from your competitor. Predictive analysis allows you to improve your pricing strategies, ensure that you are competitive with other companies in your industry or niche, and outperform them in other areas – free shipping, expedited shipping, etc.
Predictive analytics may not solve all of your problems but using this tool can help to level the playing field, allowing you to compete better and retain more customers.