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How Big Data is Changing Online Marketplaces

By Utechia - Nov 16 ,2021

Big Data offers the potential to create a serious change for online marketplaces as in many other fields. With data volumes increasing rapidly, businesses are leveraging modern technologies to harness the power of data science. Big Data stands out as the current that shows the potential to change the future of the e-commerce industry most radically after the internet.

What is Big Data?

In recent years, big data is among the concepts frequently heard by those who are interested in technology. Big data, which contributes to the growth and development of everyone using the Internet; is a meaningful and actionable form of data obtained from observations, research, search engines, blogs, forums, social media, and many other sources.

Advantages of Big Data

It allows e-commerce companies to improve their decision-making processes, gain a competitive advantage, improve their performance, products, and operational processes. It also enables analysis of customer behaviour and discovery of actionable insights.

Making Big Data sources accessible has both advantages and disadvantages. E-commerce companies must deal with huge amounts of data that they cannot process today. Predictive analytics, lead scoring and targeted personalisation, just a few Big Data concepts, and Big Data-enabled technological tools can improve operational processes and many lines of business, from budgeting to marketing. But many e-commerce executives struggle to use data science to revolutionise their businesses.

What Makes Big Data ‘big’?

The 3V equation, which is listed as volume, velocity, and variety, is the main factor that makes that technology big and defines the characteristics of the data. By using 3V, businesses can access all kinds of information about customer experience, financial transactions, and the competitiveness of the market. But how can e-commerce businesses use all this data to process it? How can they receive and use the right information to make it valuable, actionable, and more efficient for the company?

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What Opportunities Does Big Data Present for Online Marketplaces?

According to a study published by BARC, there are four main ways e-commerce companies can take advantage of this technology: Strategic decision making (69%), better control of operational processes (54%), a better understanding of customers (52%) and reducing costs. (47%). Let’s take a closer look at each of these benefits to get a better perspective on how Big Data is transforming the e-commerce market:

1.    Understanding your customers better

Embracing Big Data sources and analytics is essential at times when e-commerce businesses must truly understand customer behaviour to grow. These technologies provide tremendous tools to analyse customer behaviour, needs and experiences. Companies can use data analytics to identify and predict which offerings will better fit customer needs in the future. A better understanding of customer needs and expectations will also increase customer satisfaction and retention rate; As a result, it will help the e-commerce business grow.

This technology allows you to update your marketing strategy by analysing search result trends. You can see which results are trending and shape your SEO and marketing efforts accordingly. Additionally, you can better understand customer behaviour as you can analyse which search results are popular with your customers.

2.    Reducing team costs

Reducing operational costs is another advantage that the Big Data trend brings to e-commerce companies. Its resources enable advancement in every aspect of business strategy and planning, from customer experiences to marketing and supply chains. These advances can bring significant changes in budgeting as they reduce operational costs. In this way, e-commerce organisations can invest in third-party logistics companies and solutions, benefiting from economies of scale. This makes it possible to reduce the cost per team and to optimise operational approaches in general.

3.    Making more strategic business decisions

E-commerce companies can make more strategic and wiser management decisions with the help of Big Data. Today, approximately 50% of the structured data collected from Internet of Things (IoT) devices is used in corporate decision-making processes. Analytical tools that help marketers better understand their customers can also be used to improve corporate decision-making.

E-commerce managers can leverage Big Data and real-time analytics to make more informed and strategic decisions. For example, when e-commerce managers know which customers have the highest long-term value, they can devote more resources to acquiring, targeting, and then retaining those customers. In this scenario, the budgeting decision is strategic and reliable as it is based on the analytics provided by Big Data sources.

4.    Improving operational processes

Its resources have the potential to improve operational processes and efficiency. Operational processes can benefit greatly from algorithms that analyse customer behaviour and shopping data. Big Data also enables the application of predictive analytics. For example, companies can use predictive analytics to calculate the average payment wait time. This data can then be used to improve customer experiences and ultimately have a better payment wait time. On the other hand, Big Data algorithms assist e-commerce companies in analysing market trends and supply chains. This factor helps warehouses determine the ideal levels of inventory they should maintain for more effective operations.

You can also read the article about six ways to use bigdata in e-commerce.

 

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So, if big data is designed and used correctly, it provides important benefits in the decision stages of companies and provides companies with a competitive advantage. Companies that are aware of this situation; benefit from big data in many areas such as e-commerce, marketing, sales and production.

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Big Data offers the potential to create a serious change for online marketplaces as in many other fields. With data volumes increasing rapidly, businesses are leveraging modern technologies to harness the power of data science. Big Data stands out as the current that shows the potential to change the future of the e-commerce industry most […]

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