Here's a guest article by ecommerce entrepreneur Patrick Foster. Patrick writes: Big Data can be, and usually is... unstructured, unwieldy, and overwhelming. The secret to success with big data is knowing that it's quality, not quantity, that counts. Some companies are swamped and stymied by big data, while those who zero in on the RIGHT data and use big data analytics effectively increase their sales and revenue.
Predictive analytics solutions pull out and examine specific historical data to infer which products and services are likely to convert for particular customers. This is what enables retailers to maximize sales, increase margins, and outperform competitors.
Like "Back To The Future," Big Data and big data analytics are the Marty McFly and Doc Brown of marketing technology. So how do predictive analytics help increase your revenue?
The explosion of ecommerce, the growth of technology, and the need to function in an omnichannel environment have led to hyper-competitive markets operating on both local and global scales. Keeping abreast of the latest competitor pricing and customer behavior has to be a daily -- and much more frequent -- task, and a very important one at that.
"Firms value accurate demand forecasts because inventory is expensive to keep on shelves and stock outs are detrimental to both short-term revenue and long-term customer engagement." (Harvard Business Review: Where Predictive Analytics is Having The Biggest Impact). There are technological solutions to make sure your business isn’t at the bottom of the pile and that you neither overcharge - nor sell yourself short on margin.
Automating your marketing is a great way to take advantage of the data you have and the dynamic ecommerce site that drives your revenue and enables sales. This comes when you put predictive data to use, your marketing strategy is taking effect, and you have customers coming to your site.
Price strategy solutions I've observed, such as Upstream Commerce's predictive and dynamic pricing tools let retailers apply a scientific approach to their marketing strategy that facilitates keeping your business on course for profitability and credibility.
By visualizing data, you can relate to customers better, anticipate their next move, and deliver a superior service that drives revenue incrementally. Digital prospecting is the act of sifting through visitor data to uncover qualifying information about potential customers who are ready to buy. It’s sales 101 – delivered digitally through predictive analytics.
In a 2016 survey, 91% of US senior-level agency and marketing professionals voted DMPs (data management platforms) as the most important marketing technology trend. (eMarketer).
Data insights allow retailers to leverage actionable data based on historical competitive trends, and manage product life cycles -- including knowing when to increase prices or promote sales for seasonal campaigns. Also, to optimize your inventory.
Predictive analytics help you better price your products and services as well as improve your logistics. Overstocking and understocking can present huge risks in terms of profit loss, but predictive analytics can help you decide quantities of stock based on customer behavior, search, seasonality, competitor analysis, and more.
Web search data uses historical search patterns to determine forecasts for product demand. However, search data alone cannot be relied on to indicate true demand, so combining machine learning and human quality control still provides the greatest way to price right and optimize.
Accessing and assessing historical information is invaluable to business owners. Predictive analytics help the decisionmakers understand the market quickly, and get an idea of how industries and competitors are progressing.
Predictive analytics provide the ability to peek down the rabbit hole so business owners can make important decisions about every facet of their sales funnel.
Innovative technology is invaluable to a retailer. It means we may not make quite so many mistakes; but the most important thing that comes before and after any technology is applied or any data gleaned — is to know your goals and stay true to them.
If you don't understand what you’re trying to achieve, exactly who your ideal customer is, and what is happning in the market, analytics won't help you much. Once you can answer all the important questions about who you are, who your customers are, and what you do for them that’s so special — you can action your data and increase revenue. And, as your business scales, your business intelligence will scale with you.
In Back To The Future, Marty went back in time to make sure his mum and dad danced together at prom. With predictive analytics, you let your pricing solutions take you from the present, to the past, to the future.
Guest writer, Patrick Foster is an ecommerce entrepreneur, coach & writer. Patrick's Specialties include ecommerce tips and tricks. Patrick speaks to ecommerce business owners to help them get the best from their digital marketing and technology efforts.