This blogpost is centered around the Ecommerce Revolution and how even more personal data mining will put companies above their competition in the years to come. On the site TechCrunch.com, writer, Leena Rao discusses the origins of Ecommerce as well as what she predicts will occur in the future with companies and their customers via internet shopping. Leena Rao currently works as a writer for TechCrunch and she just completed graduate school at the Medill School of Journalism at Northwestern University, where she studied business journalism and videography. This article brings up many of the opportunities businesses have within internet shopping and individual data mining through email, social networks, shopper history as well as the issues that increased in-depth purchase data present to privacy.
Rao begins by mentioning that Amazon was the first to do personal recommendations for their customers. And since then data mining has been implemented in most all companies involved on the internet through their website, statistics trackers, etc. But as Rao states, “there is a whole world of social data, and even more-in-depth purchase data that can be mined by retailers to help increase sales.”Rao predicts that we are going to enter into the “next wave of a more personalized e-commerce experience as retailers and e-commerce sites move towards mining data to improve sales and conversions.”
Right now, data mining is dependent on previous purchase data, other consumer’s purchase history and more. But now companies are looking to expand personalization efforts. Paypal recently acquired Hunch, which is a service that provides a “taste graph” of personalized recommendations based on users’ interests. Therefore Ebay has already moved in the directions of focusing even more on the individual’s interests.
Right now, data mining is dependent on previous purchase data, other consumer’s purchase history and more. But now companies are looking to expand personalization efforts. Paypal recently acquired Hunch, which is a service that provides a “taste graph” of personalized recommendations based on users’ interests. Therefore Ebay has already moved in the directions of focusing even more on the individual’s interests.
The biggest challenge that retailers face now is getting these data points. Rao says that, “for most retailers, the toughest hurdle is to have enough data on an individual to actually help personalize the experience.” They have managed to get access to a lot of data that includes regular online-shopping routines, but they have no way of storing it then turning it around to personalize the customer experience.
Rao then explains that data comes in various forms:
Implicit data- which is gained from your everyday actions on a retailer’s site and Explicit data-which you offer to sites via surveys or quizzes.
Surveys help with understanding the customer’s need even more due to customers actually providing feedback rather than relying on the irregularities of searching in a retailer’s site, but surveys take time, and have become burdensome and drain time. What retailers need to do now is to bring conversation back into shopping somehow on the internet.
With social data like Facebook, people are sharing their likes and dislikes, comments, etc. of products. But this data is still unstructured. Being able to file all of the social commentary is hard and therefore makes it impossible (as of now) to utilize this information in the most effective way. By partnering up with Facebook, developers and retailers will be able to grow by using keywords that help to track sales or as Rao says, “the ability to add targeted buttons [other than like and dislike] could be game-changing for social discovery in e-commerce.”
In regards to privacy issues, there needs to be give and take from both the consumer and the retailer. The consumer must be willing to give up their key data and the retail sites need to provide these statistics as well. The scary thing in my own opinion that Rao suggests, is that the key to a more personalized shopping experience just means a greater amount of openness so that a retailer can understand more data and in return will improve their shopping experience. We already (at least at first) accepted to the terms and agreements of social networks like facebook and twitter that essentially says our information that we provide is public information and can be used by the public. So how much more of our personal information going to be public? Or is what Rao suggests, that the information is already there, and now retailers and companies are trying to figure out how to use it as an advantage?”So shoppers, be prepared to give up your data. In the coming year, we’re going to see many more retail sites ramping up data-driven discovery. And e-commerce sites who aren’t thinking about how to mine social and other forms of data are probably going to be left in the dust by the Amazons and Netflix’s of the next wave of personalization.”
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