Big Data’s Role in eCommerce

Posted by MHO Networks on Jul 25, 2023 12:01:00 PM

Big Data's Role in eCommerce Big data in eCommerce refers to massive amounts of structured, semi-structured, and unstructured data generated through various online interactions and transactions. These data sets are so vast and complex that they require advanced and unique forms of processing to enable enhanced decision-making, insight generation, and process optimization. 

Let’s take a closer look at the role of big data in eCommerce. 

What is Big Data? 

TechTarget defines big data as, “a combination of structured, semistructured and unstructured data collected by organizations that can be mined for information and used in machine learning projects, predictive modeling and other advanced analytics applications.” 

Big data contains huge and complex data sets from numerous sources. The relatively new concept was originally explained using three Vs, but now most users use five Vs to define and characterize big data: 

  1. Big data contains greater variety.
  2. Big data arrives in increasing volumes.
  3. Big data arrives with more velocity
  4. Big data has intrinsic value
  5. Big data must be analyzed for veracity

What is eCommerce? 

Amazon, a leading eCommerce powerhouse, defines eCommerce as, “the trading of goods and services on the Internet. They estimate that 2.15 billion people worldwide buy goods and services online. 

Everything imaginable is available through eCommerce channels, including music, books, household products, software, plane reservations, concert tickets, grocery delivery, medications, stocks, financial services, and even movie snacks. 

eCommerce exploded during the COVID-19 pandemic, and the new online shopping habits aren’t going away, which means opportunities abound for small businesses to launch e-commerce websites.”

How Do Big Data and eCommerce Work Together? 

Companies engaged in eCommerce can leverage big data to gain insights into what consumers want, their buying patterns, and their performance when compared with competitors. The benefits are numerous and companies that learn to use big data effectively will enjoy a faster track to success. 

Here are some ways booming eCommerce companies are using big data.

Personalized Experiences 

Personalized shopping experiences make every customer feel like a VIP. Burger King may have capitalized on the Have It Your Way concept since 1974, but eCommerce companies that use big data to give consumers what they want are seeing great success. They analyze data about a customer's browsing behavior, past purchases, and other online habits to suggest products that the customer is likely to buy. 

These targeted suggestions keep customers from being overwhelmed at the plethora of choices and as a result, they are more likely to make a purchase — and return later to buy more. 

Predictive Analysis 

Big data analytics can help predict future trends and customer behavior patterns. For instance, retailers can use historical data to predict which products are likely to be popular in the upcoming seasons, as well as how previous consumer activity reflects a buyer’s likes and dislikes. eCommerce stores then offer each consumer purchase recommendations based on their preferences — and research shows this generates up to 76% more purchases

Predictive analysis using big data also allows eCommerce stores to adjust various aspects of their sales approaches, including: 

  • Adaptive pricing
  • Predicting demands
  • Landing page optimization 
  • Content-based filtering
  • Collaborative filtering

Inventory Management

Big data can be used to optimize inventory levels. Retailers engaged in eCommerce can analyze sales data to forecast demand and identify inefficiencies or bottlenecks in their supply chain. This helps them identity ideal suppliers with whom to form strong partnerships to help facilitate smoother ordering and delivery and even better pricing agreements. 

Accurate analysis of complex big data can mean streamlined operations, deliveries, better organization, and cutting costs. These are all critical aspects of inventory management that larger eCommerce companies have mastered and continue to refine. 

Fraud Detection 

Fraud over the Internet is nothing new, and huge eCommerce companies face larger fraud risks. Big data analytics helps identify unusual patterns or anomalies in transactions that may indicate fraud. This early detection can save businesses significant amounts of money and protect their reputation.

Some notable examples include:

  • Data mining can be used to identify patterns of fraudulent activity, such as using stolen credit card numbers or making multiple small payments in a short period of time.
  • Machine learning can be used to build models that can automatically detect fraudulent activity. 
  • Anomaly detection can identify when a malicious bot, fraudster, or other bad actor is present on an eCommerce website. 

More than detection, big data can be used to create models that help companies automatically detect fraudulent activity and block it. 


Even smaller eCommerce sites cannot handle each aspect of the buyer’s journey in-person, so automation is necessary. For larger companies like WalMart and Amazon, automation is critical. Big data can provide important insights for what aspects of an eCommerce sales workflow (trigger, condition, action) can best be automated and how. 

Knowing what to automate and how to automate it: 

  • Saves time
  • Improves marketing
  • Reduces errors
  • Improves customer experiences 
  • Generates more sales revenue 

Product & Service Improvements 

Big data can be used to uncover insights about the customer's experience and expectations. eCommerce companies can then use this information to improve their products, services, and overall customer experience. 

Analyzing big data can reveal:

  • What existing customers think of your products or services
  • What potential customers like or dislike about your products or services
  • What new aspects of refinements can make your products or services more attractive 
  • Which audiences would benefit from what changes in your products or services

This is more of “giving the people what they want” that helps boost customer satisfaction and retention. 

How Can You Use Big Data in your eCommerce Business?

Big data can provide invaluable insights to drive growth, improve efficiency, and deliver a superior customer experience in eCommerce. However, it's essential to note that while big data provides many opportunities, businesses must also address challenges associated with it, such as ensuring data privacy and security. 

MHO Fixed Wireless Internet and Networking solutions are the perfect solution to help keep your eCommerce business online and secure. Contact us today to learn more about our solutions for eCommerce businesses. 

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Topics: Data, Business Internet, Business Tools, Data Usage, E-Commerce

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