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The Role of Big Data in E-commerce Industry

What’s big data?

What are the benefits of using big data in ecommerce?

What are the big data ecommerce case studies?

Let’s explore the answers.

Like every week, I’ll start my article with an inspirational story. This week’s story revolves around the e commerce giant Alibaba. How did Alibaba manage to become an ecommerce powerhouse, beating many of its competitors in a very short time? Jack Ma’s company got its edge over competitors due to the use of big data analytics! Since its inception, the company has used big data analytics to expand the business. Big data technology has helped Alibaba to understand and capture the mighty market of China. In this article, I’ll discuss the role of big data in ecommerce industry. 

So what’s big data? What are the benefits of using big data in ecommerce? What are the big data ecommerce case studies? Let’s answer all these questions one by one.

What is Big Data?

According to Wikipedia:

“Big data is a field that treats ways to analyze, systematically extract information from, or otherwise deal with data sets that are too large or complex to be dealt with by traditional data-processing application software. Data with many fields (columns) offer greater statistical power, while data with higher complexity (more attributes or columns) may lead to a higher false discovery rate.”

There are three major properties of big data: variety, velocity, and volume. These three Vs open new opportunities (and challenges!) for businesses. The major challenges include data management and security/privacy issues. Let’s have a look at the benefits of using big data in ecommerce.

Impact of Big Data on Ecommerce

We can learn from Alibaba’s case study – the ecommerce business that utilizes big data analytics has a competitive advantage. Here are a few advantages of big data analytics in e-commerce:

It can improve online business operations and logistics.

Big data analytics can help in providing better customer service and a personalized shopping experience. The use of big data analytics can assist in developing targeted sales and marketing strategies. Last but not the least, it can help in higher ROI and profitability!

Finding this content interesting? I recommend the following articles to my readers:

The Role of Big Data in Transforming The Education Sector

Big Data: A Way to Improve Customer Experience in FinTech

A Gentle Introduction to Business Intelligence and Data Analytics

Top 6 Big Data Analytics Challenges Faced By Enterprises and How to Solve Them

Application of Big Data in Ecommerce Industry

Here are the top five big data ecommerce use cases:

  1. Business Intelligence

Business Intelligence is a special application of data analytics in which both internal and external data is analyzed and visualized to find interesting patterns that can help in business development. Such tools are proven to increase the profitability of ecommerce businesses. 

  1. Logistics Management

Logistic management includes supply chain management, product management, and warehousing.  E-commerce companies use big data to analyze and manage product supply chains. Big data analytics play a key role in reducing the costs involved in logistics and operations.

  1. Demand Forecasting

Big data analytics can also help ecommerce companies in demand forecasting. This can again enhance the process of supply chain management. Furthermore, sales and marketing teams can plan their strategy accordingly.

  1. Personalization and Customer Experience

In my previous article, I discussed in detail how big data and AI play their role in enhancing customer experience. Here is an excerpt from the article:

“How artificial intelligence works for ecommerce business? Take an example of ecommerce powerhouse Amazon. Amazon is the pioneer in introducing AI powered shopping. You are familiar with Amazon’s personalized recommendation system, right? Back in 2003, Amazon’s researchers wrote an iconic paper – “ Recommendations: Item-to-Item Collaborative Filtering”.  This paper was the initiative for the powerful AI-based recommendation system of Amazon today. These recommendation systems are proven to give higher revenue and customer satisfaction. This is just one example of the awesome applications of artificial intelligence in ecommerce.”

  1. Fraud Prevention

Last but not least, big data analytics can help online businesses in enhancing security through fraud detection and prevention solutions!


“Data are becoming the new raw material of business.” – Craig Mundie

Make use of the data. Get value out of this raw material for your online business. In case you have any questions regarding big data in ecommerce industry, feel free to contact us ?

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