In a world that is constantly expanding digitally, data is what keeps businesses afloat. Understanding the market, the consumers, and how quickly these can shift are crucial to building an adaptable business. In this regard, it's important to note that your internal operations are not the only valuable source of data. Third-party companies and institutions also hold a goldmine of information, if you know where to look. One example: retail giants and their online marketplaces.
How businesses can utilize marketplace data
Harnessing the power of market data is now more important than ever before. This is especially the case, considering the recent boom in the eCommerce industry following the COVID-19 pandemic. From November 2019 to December 2020, online consumer spending grew by 31.3%. Findings show that the $840 billion in online retail sales, a record that wasn’t expected until 2022, was fast-tracked by changing consumer habits last year.
Those figures translate to an impressive amount of consumer data from which valuable insight can be gleaned. However, there’s a lot that goes into gathering market data — from choosing a data collection method to set a timeframe, all way to data analysis. All of this is why business analysts have become one of the most sought-after careers in business administration.
Apart from being able to research corporate strategy and policy, business analysts can also utilize data analysis programs to harness marketplace information and help eCommerce companies make more data-driven decisions. Investing in your business's analytics department — by using the right software, hiring the right personnel, or outsourcing services — is a must in today's business landscape. This, in turn, can help eCommerce companies boost sales — but exactly how can they do that by tinkering with data?
The benefits of harnessing marketplace data
Amazon, eBay, Walmart, and other large retailers with online marketplaces play a large part in determining consumer habits. As such, making use of their marketplace data is a good strategy for success. Here are three ways you can use marketplace data:
1. Analyze consumer sentiment
In large online marketplaces, looking through the bestsellers list can give you a good idea of what the market is currently interested in. There is no guarantee that those products will continue to do well. However, this information is great for informing a company's current product development strategy, allowing you to make smart alterations to the products you have on display.
Additionally, marketplace data can also be used to enhance your business's customer experience. In particular, reviews and ratings give qualitative information on what consumers like and don't like. Understanding those metrics is the key to coming up with products and solutions that buyers will actually pay for. By utilizing this information to cater to consumer needs, you increase your potential for sales and client retention.
2. Monitor the competition
Online marketplaces give you access to hundreds of competitors, allowing you to keep an eye on their movements. Through competitive analysis, you'll be able to pinpoint where you stand against them. Do consumers equate a particular product with your brand or someone else’s? If it’s the latter, you might need to work on improving top-of-mind awareness among consumers.
Monitoring the competition can also mean assessing their product prices, inventory availability, and keyword practices, among other things. These metrics can give you insight into how other brands perform in the market, which you can use to craft your own strategy. For example, a stable average selling price for any given product generally means that it's doing well. As for the keywords they use, this can inform you of how to improve your search engine optimization (SEO) strategy. Knowing what the competition is doing is the first step to getting ahead, so don't skip this step!
3. Pinpoint market trends
There are multiple factors that shape market trends, and one of them is the law of supply and demand. Online marketplaces are a great source of data on this, especially given their large consumer base. With predictive analytics, you can make data-based predictions of industry trends and tailor your marketing strategy around those findings. For instance, the recent shift to online platforms has led to a general improvement in customer service.
Companies are utilizing consumer data to provide more personalized experiences for their clients. Knowing that this widespread trend is warmly accepted by consumers, you should aim to improve the personalization of your customer service and be at their constant beck and call. This is what can help your business keep up with the competition. Such information can help you in designing your business practices, customizing them in a way that adheres to the forecasted trends.
In today's digital age, data and its utilization have become a staple in the eCommerce scene. It just goes to show how much the industry has evolved. Companies now have access to information that they never could have gotten their hands on a couple of years ago. Now, it's essential to business operations. Just as we said in the beginning: In an ever-expanding digital world, it is data that keeps businesses afloat.
Guest Blog contributed by Alicia Melvin