4 Ways Big Data Can Help Ecommerce Merchants

In "Understanding Big Data For Ecommerce," I provided a general overview of how online merchants can use Big Data. In this article I will describe in more detail how Big Data — i.e., large amounts of seemingly random data from many sources — can be used to create competitive advantages.

Necessity of Analytical Tools

Collecting Big Data is the easy part. Storing, organizing, and analyzing it is much more complex. Sources can be as diverse as Facebook, Twitter, CRM software, AdWords, and your own website. Making sense of it can be overwhelming without analytical tools.

These tools facilitate the examination of large amounts of different types of data to reveal hidden patterns and correlations that are not otherwise easily discernible.

For example, a merchant could analyze data on visitor browsing patterns, login counts, past purchase behavior, and responses to promotions — to eliminate what isn't working and focus on what does. Some of the off-the-shelf analytic solutions are so finely tuned, they can tell a vendor whether it needs to offer a 25 percent discount or if a 15 percent discount will suffice for a particular customer.

Association rule learning is another analytics method that is a good fit with Big Data. This could be, for example, a shopping cart analysis, in which a merchant can determine which products are frequently bought together and use this information for marketing purposes.

4 Uses of Big Data Analytics

Big Data can be most useful in analyzing a customer's shopping and purchasing experience, which can help a merchant in the following four ways.

• Become more efficient by alerting you to merchandising efforts that are ineffective, and products that are not selling, such as an apparel product may be selling well only in two colors while your offer five. 
• Increase conversion rates by better identification of successful sales transactions.
•  Encourage more purchases by presenting existing customers with complementary items to what they've purchased previously.
•  Enhance inventory management by eliminating slow-moving items and increasing the supply of fast-moving merchandise.

McKinsey & Company, the consulting firm, provides this example. "The top marketing executive at a sizable U.S. retailer recently found herself perplexed by the sales reports she was getting. A major competitor was steadily gaining market share across a range of profitable segments. Despite a counterpunch that combined online promotions with merchandising improvements, her company kept losing ground….The competitor had made massive investments in its ability to collect, integrate, and analyze data from each store and every sales unit and had used this ability to run myriad real-world experiments. At the same time, it had linked this information to suppliers’ databases, making it possible to adjust prices in real time, to reorder hot-selling items automatically, and to shift items from store to store easily. By constantly testing, bundling, synthesizing, and making information instantly available across the organization…the rival company had become a different, far nimbler type of business."

Is Big Data Analysis Affordable?

Is launching a Big Data initiative expensive? It doesn't have to be. A single disk drive that could hold all the recorded music in the world costs $200, according to McKinsey. Cloud data storage is also a good alternative for small ecommerce merchants because it is relatively inexpensive and is scalable — it can expand as data requirements grow. A variety of cloud analytics software programs are now on the market. While big players like IBM focus on enterprise companies, there are providers that cater to smaller ones — examples are Custora, SumAll, InsightSquared, and Metamarkets.

Summary

Relying on data-driven decision-making is crucial in industries in which profit margins are slim. Amazon, which earns increasingly thin profit margins, is one of the most effective users of data analytics. As more Big Data solutions for small online businesses come to market and more online merchants incorporate Big Data into their business tool set, employing Big Data will become a necessity for all ecommerce merchants.

Article source : http://www.practicalecommerce.com

Understanding Big Data For Ecommerce

The term "Big Data" was the Internet buzzword of 2012. The use of Big Data promises to become more prevalent in 2013, as merchants large and small who use Big Data analytics can gain a significant competitive advantage.

What is Big Data? Webopedia defines it as "a massive volume of both structured and unstructured data that is so large that it's difficult to process using traditional database and software techniques."

The "structured" portion of Big Data refers to fixed fields within a database. For ecommerce merchants, this could be customer data — address, zip code — that's stored in a shopping cart.

The "unstructured" part encompasses email, video, tweets, and Facebook Likes. None of the unstructured data resides in a fixed database that's accessible to merchants. But the feedback from, say, social media has become a very useful research tool for businesses.

A Powerful Tool; Be Careful What You Use It For

Big Data can provide detailed insights into customer behavior that can be unsettling. Here's an example. Early last year a 15 year-old girl in Minneapolis went to her local Target store and purchased unscented body lotion. Target assigns every customer a guest ID number tied to a credit card, name, or email address. Target maintains a history of everything that person buys along with demographic information.

Within a few weeks, Target mailed the girl coupons for pregnancy and baby-related items. The girl's father found the coupons and in an angry mood went to talk to the Target store manager, accusing him of encouraging his daughter to become pregnant. The store manager, unaware of why the coupons were sent, apologized. He called the father a few weeks later to again say how sorry he was. But this time the father apologized. It turns out that Target, using Big Data analytics, knew more about the man's family situation that he did. The girl was indeed pregnant. It turns out that pregnant women buy a lot of unscented lotion.

In short, Target's analytics are so good it can predict the trimester of pregnancy based on what a female buys. But Target received a good deal of negative feedback after this story was publicized.

How Can Ecommerce Merchants Use Big Data?

Merchants can use Big Data in many different scenarios. This can include comparing traffic to a particular product to the sales of that product.

Mark Ledbetter, global vice president for SAP Retail offered this example to Retail Info Systems News, a magazine. "Retailers can compare the volume of website traffic for a given product versus number of sales of that product. You'd expect a correlation between web traffic and sales — consumers find the product they want, and then they buy it. But if you find a lot of web traffic and few sales, something is wrong. It's a signal to keep the product, whereas in the past, it may have been discarded due to low sales. Now you just need to confirm the product is competitively priced, has a compelling and informative presentation, an array of colors and sizes, and all other aspects that are required to incent the customer to make that final, and most important, step: the purchase."

Is Big Data Only for Big Companies?

Any sized company can benefit from Big Data. Amazon is a pioneer in its use, but smaller ecommerce companies can benefit as well. “Big data is quite simply data that cannot be managed or analyzed by traditional technologies,” according to Rebecca Shockley, global research leader for business analytics at the IBM Institute for Business Values, quoted in IBM's Forward View magazine. “So what is considered big data for one company may be different for another company. ‘Big’ doesn’t have to be really that big; it’s just bigger than what you’re used to dealing with,” she adds.

Many business-analytics consulting firms exist to help smaller companies deal with Big Data. Software to deal with Big Data is also available. One of the most popular is Apache Hadoop, an open source software framework that supports data-intensive applications. As Big Data becomes entrenched in more companies, the software tools will become more sophisticated and less costly.

Seek a positive return on investment for Big Data. It helps to have a strategic intent as to how you will use the data when you start out. Ask the right questions that identify the specific decisions that data and analytics will support to provide favorable business outcomes. Initially keep things simple and then move on to more sophisticated uses.

Article source : http://www.practicalecommerce.com

4 Reasons Every Retailer Should Have a Mobile App

Mobile applications resonate with shoppers, are easy to implement, come with a variety of abilities and purposes, and are becoming the standard for online retailers. There are at least four reasons nearly every retailer should offer a mobile application.
 

Mobile commerce is among the fastest growing retail segments. By some estimates mobile commerce will rise from about $2 billion in sales in 2013 to $62 billion in the next five years. Mobile applications will be part of the amazing growth.
 

1. Shoppers Love Mobile Retail Apps
 

Mobile smartphone users like — love — retail apps. According to data from application analytics firm Flurry, as reported in Tech Crunch, Android and iOS users spent 525 percent more time on retail mobile apps in December 2012 as those users had in December 2011. 
 

For a comparison, consider that overall app usage grew about 132 percent in that same period, meaning that retail shopping apps grew at about four times the average. Mobile apps from retailers also had nearly double the usage growth as price comparison applications or purchasing assistance applications, again according to Tech Crunch and Flurry.
 

Shoppers like apps from their favorite stores, so don’t disappointment.
 

2. Mobile Retail Apps Are Easy to Make
 

The Apache Cordova project and Adobe’s PhoneGap framework make it possible to create a mobile, retail app using HTML5, CSS, and JavaScript and then release that application as a platform-specific native application on Apple iOS, Android, Blackberry OS, WebOS, Windows Phone 7, Symbian, and Bada.
 

Essentially, this means that having an app for an iPhone or Samsung Galaxy S4 is about has hard as building a website. Many retailers will still need to pay a developer to create the app. But again, relative to having to build a custom application for each possible mobile operating system, these tools make building mobile retail apps relatively easy.
 

Mobile apps don’t have to be harder or more difficult to make than a website. There is no real technical barrier.
 

3. No Shortage of App Ideas
 

A mobile retail application can be as simple as a product catalog and a shopping cart. Retail applications do not need to do anything other than display product or prices. Some business owners or marketers may feel like an app needs to be revolutionary or at least utilitarian. That is not the case. Showing products and prices may be enough.
 

On the other hand, there are also no limits to what a retail app can do. Here are a few ideas to serve as examples.

• Apparel retailer. Monthly fashion magazine or catalog app.
•  Hardware retailer. App that takes a picture of a screw and provides its dimensions, and links to related products.
•  Garden supply retailer. iPad app that helps plan backyard gardens, and offers suggested products. 
• Sporting goods retailer. App that shows the text of sport’s official rulebook.

More general examples include a gift registry, loyalty programs, social shopping, or even customer account tool management.
 

4. Your Competition Has a Mobile App
 

Some 83 percent of the top retailers offer at least one mobile application, according to IT consulting firm Cognizant. In some ways, this means that retailers that don’t have mobile applications are already behind.

Article source : http://www.practicalecommerce.com

What is Ecommerce?

Electronic commerce or ecommerce is a term for any type of business, or commercial transaction, that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge.

Ecommerce allows consumers to electronically exchange goods and services with no barriers of time or distance. Electronic commerce has expanded rapidly over the past five years and is predicted to continue at this rate, or even accelerate. In the near future the boundaries between "conventional" and "electronic" commerce will become increasingly blurred as more and more businesses move sections of their operations onto the Internet.

Business to Business or B2B refers to electronic commerce between businesses rather than between a business and a consumer. B2B businesses often deal with hundreds or even thousands of other businesses, either as customers or suppliers. Carrying out these transactions electronically provides vast competitive advantages over traditional methods. When implemented properly, ecommerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services.

Electronic transactions have been around for quite some time in the form of Electronic Data Interchange or EDI. EDI requires each supplier and customer to set up a dedicated data link (between them), where ecommerce provides a cost-effective method for companies to set up multiple, ad-hoc links. Electronic commerce has also led to the development of electronic marketplaces where suppliers and potential customers are brought together to conduct mutually beneficial trade.

The road to creating a successful online store can be a difficult if unaware of ecommerce principles and what ecommerce is supposed to do for your online business. Researching and understanding the guidelines required to properly implement an e-business plan is a crucial part to becoming successful with online store building.

What do you need to have an online store and what exactly is a shopping cart? 

Shopping cart software is an operating system used to allow consumers to purchase goods and or services, track customers, and tie together all aspects of ecommerce into one cohesive whole. While there are many types of software that you can use, customizable, turnkey solutions are proven to be a cost effective method to build, edit and maintain an online store. How do online shopping carts differ from those found in a grocery store? The image is one of an invisible shopping cart. You enter an online store, see a product that fulfills your demand and you place it into your virtual shopping basket. When you are through browsing, you click checkout and complete the transaction by providing payment information.

To start an online business it is best to find a niche product that consumers have difficulty finding in malls or department stores. Also take shipping into consideration. Pets.com found out the hard way: dog food is expensive to ship FedEx! Then you need an ecommerce enabled website. This can either be a new site developed from scratch, or an existing site to which you can add ecommerce shopping cart capabilities.

The next step, you need a means of accepting online payments. This usually entails obtaining a merchant account and accepting credit cards through an online payment gateway (some smaller sites stick with simpler methods of accepting payments such as PayPal).

Lastly, you need a marketing strategy for driving targeted traffic to your site and a means of enticing repeat customers. If you are new to ecommerce keep things simple- know your limitations.

Ecommerce can be a very rewarding venture, but you cannot make money overnight. It is important to do a lot of research, ask questions, work hard and make on business decisions on facts learned from researching ecommerce. Don't rely on "gut" feelings. We hope our online ecommerce tutorial has helped your business make a better decision in choosing an online shopping cart for your ecommerce store.

Article source :  http://www.networksolutions.com

E-Commerce Site Grand St. Raises $1.3 Million To Give Makers A Place To Sell Their Gadgets

There are any number of cool gadgets and doohickeys that have not only been imagined, but realized over the course of the last few years. Nowadays nearly everyone, with a little bit of determination and ingenuity, can make those dreams a reality. But taking those dreamed-up products and making them actually a viable business — that’s a whole different story. And on the consumer side, there’s the question of how to find all the cool new stuff that you might not know about. 
 

Online retailer Grand St. hopes to solve all that, by providing a marketplace to makers, helping to throw a spotlight on interesting gadgets that might otherwise fly under the radar. And to do that, the company has raised a seed round of funding worth $1.3 million.
 

The funding was led by First Round Capital, with participation from David Tisch, Gary Vaynerchuk, betaworks, Collaborative Fund, MESA+, Quotidian Ventures, and Undercurrent. In addition to investing, Undercurrent plans to play a strategic role in advising the company as it grows.
 

Grand St. seeks to differentiate itself by providing a high-quality showcase for creative or small-batch technology, choosing a different product to highlight on its page every day. It takes photos and provides editorial content to show off the best part of each product. Through its website, an email newsletter, and social channels like Facebook and Twitter, the company seeks to find buyers for a unique set of products that are handpicked by the Grand St. team.
 

Consumers benefit by being introduced to things that might be obscure or produced in small batches. And by not having to go through the pain of backing a bunch of stuff on Kickstarter and hoping to one day have product actually shipped. It’s kind of like Grand St. does the hard work of scouring the Internet to find new and interesting technology so that you don’t have to. The goal, according to co-founder Joe Lallouz, is all about “changing the way consumer products are bought and sold.”
 

The company handles all the shipping and fulfillment for inventory of products that it showcases. It also has a return policy that allows users to send items back within 30 days for a full refund. So if that doodad isn’t quite what you were expecting, you can send it back, no questions asked. 

Grand St. was founded by Y Combinator alum Amanda Peyton, along with former Hashable employees Joe Lallouz and Aaron Henshaw. While it’s still in a closed beta, with invites being sent to interested buyers, the three hope to open to the public soon.

Article source : http://techcrunch.com/