How Alternative Data Revolutionizes eCommerce
eCommerce has been booming in the past few years and saw a massive boost during the COVID-19 crisis. In April of 2020, eCommerce sales in North America increased by 129% year over year. This trend should continue as consumer habits change. One of the ways eCommerce businesses can prevail in an increasingly competitive environment is through a data-driven strategy. However, not all data is equally useful for understanding customers and predicting buying habits. Alternative data, which is often derived from User-Generated Content, can be obtained through web crawling, scraping, and retrieving texts from webpages.
What Is Alternative Data?
Alternative data covers many different categories. How to define it often depends on the context. It usually denotes data that is not available from conventional sources, such as news sites, research, or forecasts. Some examples of alternative data include User-Generated Content such as social media posts, reviews, surveys, and customer service chats. Sentiment analysis using product review data is one way to obtain alternative data.
Why is this type of data necessary? Because alternative data leads to the eCommerce revolution. The reason why it is valued is that it is straight from the customer. eCommerce depends on reaching the customer on the web and determining what choices they are going to make next depending on how they are discussing products and brands. This data is direct from the source.
How Is It Obtained And Used?
User-generated data is everywhere. The trick is how to retrieve it, analyze it, and transform it into actionable data. There are various steps to securing many texts from review sites, social media platforms, and webpages. The first step is to use tools for web crawling to locate relevant texts on the web.
An ordinary internet search may yield results, but a web crawler keeps on searching for mentions of products and brands and will continue to provide links. When these texts are identified, the next step is to use a web scraper to lift the HTML code from the text from the webpage and store copies in a database.
Depending on the goal, analysis tools can evaluate the texts for sentiment, keywords, and other useful information. Many of these solutions can transform qualitative data into quantitative data with a numerical rating that can be used for calculations and forming effective strategies to promote products and brands. The following are other uses for alternative data.
1. Leveraging The Power Of Reviews
Customers like to write reviews. This is shown by the popularity of review sites and the prominent place customer feedback has on eCommerce platforms. According to Forbes, 90% of customers look at online reviews before making a purchase. Even if this is just a brief glance, there is no doubt that reviews are enormously influential.
Given the plethora of reviews, it would be impossible to read every single review. Hiring staff to read through reviews results in an incredible amount of time and money. Instead, sentiment analysis tools evaluate texts and assign a rating by assessing the attitude of the text. This can be focused on various questions, such as color and fragrance, ease of use, and packaging.
2. Providing Notices Of Negative Reviews
Responding to a negative review is a bit like putting out a fire. It can appear heroic and attentive when successful, but it can spread out of control if a negative review goes unnoticed. Having tools that notify every time a brand or product is reviewed is useful for staying aware and protecting brand reputation.
The key to dealing with negative reviews is responding immediately. The response should not sound like a desperate attempt to do damage control but should demonstrate that the customer complaints have been heard and addressed. These moments are a great opportunity to show impressive customer service and win critics over, so it is essential to stay informed about reviews.
3. Competitive Analysis
Not only is it essential to know what people are saying about your brand and products but also how they feel about your competitors. Customers’ likes and dislikes about your competitors’ products can provide clues on where to innovate, provide better service, and fill the product offerings gap.
In addition to being notified when there is a mention or a review of your products, receiving notifications when rival products are mentioned is also useful. Performing sentiment analysis and reading some of the reviews to determine what customers are looking for can be a valuable guide to refine strategies.
4. Monitoring Changes To Competitors’ PDPs (Product Description Pages)
If a competitor seems to be doing well on an eCommerce platform and attracts customers, it is essential to figure out what. Product description pages could be key. Scraping updated product descriptions can give clues on what keywords to use and which features to emphasize.
5. Monitoring Pricing Differences
Pricing is an example of something that can change rapidly but can dramatically affect market share. A business can be involved in a price war and not even realize it if competitors decide to slash prices dramatically to seize customers. Keeping track of pricing changes and implementing automated dynamic pricing can make it easier to compete and avoid losing customers to the competition.
Alternative Data Revolutionizes Marketing Strategies
User-generated data is available everywhere. The trick is how to retrieve and use it effectively to develop a market strategy. Collecting texts created by consumers on the web through crawling, scraping, and analyzing text and transforming it into data is an effective method for creating valuable data and game-changing marketing strategies.