In the era of big data and advanced analytical tools, many companies are striving to make the best use of available data in the battle for a competitive market position. However, due to the increasing number of different sources and the growing volume of generated data, this presents challenges for many. It is therefore no surprise that, in the field of online business, data analytics is becoming a crucial tool for securing a competitive advantage.

Between March and August 2020, one in five consumers switched brand loyalty, and seven out of ten shopped online, according to a spring survey by McKinsey. Retail experienced a development cycle in just a few months that would normally take a decade.

The result of last year's boom in online shopping and e-commerce in the broader sense is that companies have generated enormous amounts of data. Unfortunately, as noted by McKinsey, most companies do not know how to leverage this data to better understand their customers and their needs, and to scrutinize their own operations.

There are several reasons for this, but one of the most important is the use of inadequate analytical tools. Instead of using the obtained data for more precise and targeted digital marketing, many companies still rely on mass communication and promotions that are not narrowly targeted at specific market segments. Thus, digital marketing has yet to take full advantage of the golden age of technological disruptions in online business.

Actionable Analytics Bring in New Customers and Additional Market Share

Therefore, a small number of companies using actionable analytics tools can be considered innovators in online business. These companies quietly gain market share and customers from their competitors. The most significant differences are emerging in online stores, where products on the market are similar. Therefore, a company that has collected data and can follow sales trends ahead of others has a competitive advantage.

An online store owner who uses advanced analytics in their operations can make quality decisions based on real-time data. They can also forecast the company's performance based on past patterns and anticipate potential obstacles. By using analytics, they can monitor current operations, quickly detect alarming events, declines, and irregularities, and respond appropriately to prevent potential losses. Analytics provides an overview of the entire company's operations at all levels, making strategy alignment and process management straightforward.

The Fine Mechanics of Online Sales

Knowing your customers is undoubtedly crucial for successful sales. Companies may have a specific product that sells well to a particular group of people who must be targeted in marketing. "Who are these customers, and what are these products? We can track them through analytics. In analytics, we can display a graph that is useful for the company's marketing process, while on the other hand, presenting the overall characteristics of the final package to show optimal utilization or the opposite."

"Let's take the example of selling product X at a price of 50 euros. The product sells excellently from a marketing perspective. For most companies, the story would end here, as they would be satisfied with the sales results. Meanwhile, a user of actionable analytics tools would check the acceptance of packages containing product X. They would be interested in whether the product is successfully delivered, whether the share of undelivered packages is too high, and whether it is actually worthwhile to sell the product or whether the sales strategy is flawed. Another important piece of information is whether it is worthwhile to sell this product in region Y, and what the acceptance or deliverability rate is in that region. Does product X still generate profit, or is the company already experiencing losses? Perhaps the product is too expensive or even too cheap based on the average price of the shopping cart in the selected country, region, or target customer group."

Without the data provided by analytics, it is impossible to successfully manage an online store. Analytics contributes to mature and sound decisions. It reveals patterns, connections, creates a comprehensive picture, and guides further decisions. The number of orders can be one indicator of a company's success, but the data collected and displayed by analytics tells whether that is truly the case.

Advanced Analytics for Optimal User Experience

The importance of using appropriate analytics in online sales is also reflected in a better user experience, which is more crucial than it might seem at first glance. Since customers do not have the direct assistance of a sales advisor during online purchases as they would in a physical store, where the seller tries to keep the customer in the store by suggesting another or a third product and thus selling multiple products at once, online stores must achieve this through the collected data. Therefore, the first impression is extremely important for an online store. "To determine what the optimal first impression is, we need to conduct several tests and comparisons. And we do this with analytics. With analytics, we collect data with different website patterns, and the numbers quickly tell us what our optimal choice is."

Monitoring and Forecasting Inventory Levels

Actionable analytics is also useful for monitoring inventory levels in online store warehouses. Without information about inventory and sustainability, an online business can cause significant harm. "As an online retailer, you need to know what is selling well, how much stock you have of these products, and how long this stock will last based on current sales. This way, the procurement process can follow the sales trend and provide new stock in time or decide on product purchases based on sales and stock turnover."

Delivery Problems (and Solutions)

Analytics can monitor delivery success at various levels. Delivery success is a complex concept that most online retailers struggle with. "In most cases, these are impulsive purchases, which significantly affect package acceptance and represent a cost for the company. With analytics, companies can monitor package delivery success under different business conditions and decisions, making the cause and effect clearly visible."

Analytics shows critical moments and examines various reasons and circumstances for unsuccessful deliveries (shipping times, payment method, incorrect delivery data, unappealing product, etc.). Additionally, using actionable analytics, online store managers explore various options for improvement, actively monitoring results in real time to improve processes and fix errors based on this information. "Besides internal company processes that affect delivery, there are also external processes, such as choosing the right courier. In analytics, we display the quality of couriers, their delivery times, lost packages, and much more."

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Wishing you successful business,
MetaKocka Team