If you run a small online business, you might not have thought about big data before. You might not even know what it is. Big data refers to all of the information that is collected about customers and their shopping habits and if you analyze that data in the right way, it can open a lot of doors for your ecommerce business. But so many companies collect data and then don’t do anything with it because they don’t know what they should be looking for and how data analysis can benefit them. 

If you run an online business, these are some of the ways that you should be using the data that you collect. 

Market Research  

Even before you launch your business, you should be using data to see whether your idea is likely to take off. There are a lot of ecommerce ventures with great potential but there are also a lot that fail. You need to work out which category your business idea falls into so you don’t invest a lot of money in an idea that is likely to fail. The good news is, there is so much data out there about how similar companies are performing and which products are a hit with consumers at the moment. By using all of this data, you should be able to get a good idea about who to market your products to and how likely your business is to succeed. Alternatively, you could create an online survey using a website like Qualtrics to find out how possible customers would feel about your product! But if you dive straight in without doing this market research first, your new online business may not make it past the first year. 

Predicting Trends 

Predicting trends is so important in business because if you can get ahead of them and start selling the next big product before everybody else, you will get a lot of new customers. But if you are late to the party, you will miss out on that golden opportunity. You can use big data to analyze consumer spending habits to work out which products are getting popular online, so you can start developing your own versions. You can also predict trends in your own products, so you know when you are likely to see an increase in sales of a certain item, allowing you to manage your inventory more effectively. 

Optimizing Marketing Campaigns

Managing your marketing budget is so important, especially if you are a new business with limited funds. That’s why it’s important that you have a clear understanding of how marketing campaigns are performing and how that translates to sales. This is where product reporting tools are so useful because you can get a full breakdown of your marketing campaigns and see whether they have inspired an increase in sales or not. In some cases, you may find that your marketing strategy is not having any impact, in which case, you can change it and try a different approach. But if you don’t use data to analyze your marketing campaigns, you can easily end up pumping money into something that is not improving sales in any way. 

Setting Accurate Prices 

There are a lot of reasons why a certain product is underperforming. Maybe you haven’t marketed it well or it’s just fallen out of fashion and consumers are interested in something else. However, a lot of the time, it’s down to pricing. If you overprice your products and people can get similar or even the same products cheaper elsewhere, your sales will plummet. But it’s equally important that you don’t price products too low because you won’t make enough profit to make the sale worthwhile and, in some cases, you may even lose money. But pricing products competitively is actually a lot harder than people realize. Pricing products manually based on competitor’s prices is fine to start with, but as you add more products to the site, this method quickly becomes unmanageable. However, if you analyze sales data from across the internet and use this to price products, you can ensure that you are always competitive but you still make a good profit on each sale. 

Improve Customer Service 

Good customer service is the best way to get repeat customers, and you should be using data to improve your interactions with customers. By collecting data about their purchasing history, their social media profile, and any previous interactions that you have had with them, you can build a full profile of each customer and really get to know who they are. This will allow you to create a tailored experience that is much better for the customer. 

If your online business isn’t using data, you are missing a lot of great opportunities for growth and improvement.