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BizReport : Ecommerce archives : December 01, 2015

How analytics are impacting e-commerce

Analytics aren't new, but how brands use them, especially to engage shoppers, continues to change each year. One expert explains how analytics are impacting ecommerce.

by Kristina Knight

"The beauty of using analytics in e-commerce, compared to bricks-and-mortar, is that you have much more agility and freedom to fine tune promotions and featured products as customers' tastes and trends change. Using real-time smart pattern discovery based analytics, e-tailers can spot trends the minute they start to take shape and respond immediately to capitalize on the opportunity or thwart the potential risk," said Arijit Sengupta, CEO, BeyondCore. "If an influential fashion blogger declares a pair of boots this season's must-have and kicks off a shopping frenzy, e-tailers can change course quickly by revamping their home page, shooting out coupons to registered customers and adjusting their online or mobile ads. On the other hand, if they spot a negative development--maybe this year's hit video game just isn't quite the hit they expected in a certain region or with a target demographic--they can adjust quickly to offer a discount or promote other products to prop up sales. By contrast, this kind of mid-stream adjustment is a much bigger and more time-consuming process for a retail store."

The key, says Sengupta, is being able to react to trends in real time. Automation is key for this part of a brand's analytics journey. Many brands are doing a good job of not only queuing analytics but learning from the analysis. Still, there is room for improvement.

"Put it this way: [e-tailers are] doing the best they can with what they have to work with. Most are relying on conventional analytics that take weeks or months of expert investigation to arrive at insights that help them make decisions about inventory, promotions, product trends and sales forecasts. That means what we see now as the holiday season kicks off has been in the works since August," said Sengupta. "But how many consumers were thinking about holiday shopping in the summer? There is just too large of a time gap and too many variables that can change in those months. Quite frankly, if you get it wrong back in August, you could be dead in the water come Black Friday. Conventional analytics severely limit the ability for brands and retailers to prepare for and respond to changes in consumer behavior. And, there's of course the risk of straight out erroneous analysis. Most conventional analytics systems don't account for confounding effects or anomalies in the data. They might interpret outliers as holistic trends. And, that can send brands and retailers down the wrong path very quickly."

More from Sengupta tomorrow, including three tips to improve the use of analytics.

Tags: BeyondCore, ecommerce, ecommerce analytics, ecommerce trends

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