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Big data provides critical information to decision makers across all industries. E-commerce is no exception. The article below shares a few key ways that big data is influencing e-commerce. CK

Article written by Olivia Ryan originally appeared in Payments Journal on July 6, 2018. 

E-commerce is a gigantic industry that gives people the privilege of exploring, comparing, and buying products remotely. Although it seems natural to most of us, this kind of service would be impossible without big data and its computational power.

By definition, big data is an evolving term that describes any voluminous amount of structured, semi-structured, and unstructured data that has the potential to be mined for information. In other words, big data help us to extrapolate valuable conclusions out of massive volumes of seemingly unrelated information.

In this post, we will show you all you need to know about big data and its influence on e-commerce. Here are 7 ways how this system of business intelligence is contributing to online retail.

1.     Consumer Analysis

Whenever we browse the Internet, we leave a lot of digital traces all around the web. According to the research, 1.7 megabytes of data will be created every second for every person on earth by 2020. This helps online businesses to analyze target consumers and learn how they behave in the digital universe.

Big data enable companies to understand how people search and find products or services. You get to know their location, age, interests, and dozens of other features that constitute a buyer persona. The system also explains sudden spikes in demand and recent shopping trends, thus giving you inputs on which you can build your sales and marketing strategy.

2.     Personalization

Consumer analysis goes hand in hand with personalization. Modern customers demand tailored offers that match their personal preferences, so you need to indulge them and adapt products or services accordingly. Using big data as the business tool, you can fulfill this requirement.

Today, companies are able to send automated recommendations in real-time because they know the entire history of user inquiries and purchases. This is exactly what the e-commerce pioneer, Amazon, is doing – they instantly display customized offers to each visitor and use unique engine recommendations to enhance the overall user experience.

3.     Customer Service

Big data has the power to improve customer service, which is just a natural consequence of enhanced consumer analysis and personalization. Running an e-commerce company, you can utilize business analytics to figure out the most frequent user complaints. This is very important since almost 90% of clients will pay more for a better customer experience.

Using big data, you can behave proactively and find the solution to eliminate common issues. Besides that, you can evaluate the work of each customer service agent individually and learn what they do or do not know. It makes the whole system much more efficient, while your shoppers will be satisfied and willing to spend more.

4.     Flexible Pricing Policy

The ability to process and analyze huge volumes of information also allows you to create a flexible pricing policy. You can increase or decrease prices in real-time depending on current market conditions, supply and demand.

Wilton Williams, an e-commerce specialist at service, explained it briefly: “If you’ve ever wondered why airline companies change prices on a daily or even hourly basis, it’s because they have the flexible pricing policy. Big data knows when it’s time to offer discounts or maximize prices because it takes into account numerous sales indicators such as purchase history, holiday seasons, days of the week, etc”.

5.     Demand Forecasting

Most retailers, including e-commerce companies, are struggling to keep the optimal amount of stocks. Only a decade ago, it was almost impossible to precisely predict customer needs and calculate all elements that contribute to demand forecasting.

However, big data changed the way forecasting works. Today, it is relatively easy to avoid out-of-stock situations while still keeping your supplies to the required minimum. The new system explores the history of purchases and makes accurate predictions that increase the overall profitability of your business.

6.     Safer Online Payments

Financial security and online payments have traditionally been the pain point of e-commerce. Some studies claim that e-commerce fraud loss already reached almost $60 billion, making both customers and companies scared and uncertain about their digital transactions.

With its centralized system, big data significantly improve online security and makes card payments much safer. It can detect suspicious transactions in real-time and react almost immediately, thus preventing a vast majority of fraudulent activities.

It doesn’t mean that big data now make online payments 100% safe. Hackers are constantly inventing new ways to breach security measures and steal money online, but the fact remains that big data made e-commerce a lot safer business.

7.     Predictive Analytics

Predictive analytics is the last point on our list, but it definitely isn’t the least important impact of big data on e-commerce. On the contrary, companies that use this business intelligence tool cleverly can detect new trends much faster than their passive competitors.

Big data scans and analyzes social media news and customers’ browsing habits to determine the next big thing in your niche. With such powerful tool in your hands, the only thing left for you is to prepare for the new trend and take your business to the higher level.


E-commerce is based on huge volumes of information that would be impossible to analyze without help from big data. It’s a multilevel process that gives valuable insights into the world of online sales and consumers.

This post revealed all you need to know about big data and its influence on e-commerce. Following these principles of data analytics you can handle online business more efficiently, so don’t forget to put them into practice and improve your sales results!

About author:

Olivia is a passionate blogger who writes on topics of digital marketing, career, and self-development. She constantly tries to learn something new and share this experience on various websites. Connect with her on Facebook and Twitter.

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