How Data Science is very important for eCommerce


Thanks to progressing innovation, retail marketers nowadays have access to large range of data and analytics tools, which is making everyone’s life simpler. It gives companies an opportunity to resolve problems and provide excellent consumer experience.

The ability of machines to process information and carry out tasks in a way that mimics human intelligence such as voice and visual acknowledgment or decision making is opening many doors for online merchants, and brand owners look for methods to use AI for their eCommerce organisations.

Knowing that more companies have insights to data based on consumer’s habits, competition is arising, and it is vital to evaluate analytics in order to succeed worldwide of eCommerce.

Having information on hand is something, however better understanding, method execution and improvement based on it is another obstacle. In this short article we will talk about data science utilizes in eCommerce and why it is essential for every online retailer.

Uses of Data Science in Ecommerce

Recommendation System

As the name recommends, it is a system which filters the details and anticipates user’s choices, while they’re browsing the Internet. It analyses people’s previous searches and screen their purchases in order to come up with relevant items. There are three primary recommendation strategies:

  • Collaborative Filtering- the most popular technique used in eCommerce. It collects data and finds similarities between activities and interests of different users.
  • Content Based Filtering- this technique finds recommendations based on product descriptions of items liked by users.
  • Hybrid Recommendation Filtering- it uses the 2 techniques described above and combines their results or use one technique’s results as input for another technique.

Customer Lifetime Value

It is a prediction of how much can one client give revenue of a company during their life time. It is determined by shopper’s previous purchases and their interaction with a specific eCommerce website. How to calculate client life time worth? This is a simple formula:

(Average Order Value) x (Number of Repeat Orders) x (Average Customer life expectancy)

  • Average order value- based on previous orders
  • Number of Repeat Sales- number of times that order was placed
  • Average Customer Life Span- How long a person has remained your customer

Improved Customer Care

Every eCommerce entrepreneur knows how essential customer support is. Information science assists business enhance it by extracting score and examines from the site. After extracting, it is possible to segregate them and do Sentiment Analysis for much better understanding why bad evaluations were given up the top place. It assists eCommerce organisations to effectively go through all of the reviews and deal with enhancement and user complete satisfaction, prioritising the issues pointed out by dissatisfied customers.

Predictive Analytics

Consumers nowadays look for more personalized experiences and every brand requires to be able to forecast what users are looking for on their eCommerce platform. Every customer communicates with a site in a various way and have individual choices. Comparable to Recommendation System, Predictive Analytics screen customers’ shopping patterns and their interaction with the website, offering access to all of the insights. Ecommerce company then, have the ability to provide better consumer experience and pick minimum and maximum rates for their products.

Big Brands Use Big Data

We have evaluated how big brands utilize data to enhance their sales and accomplish brand success.

      1. Amazon

        This world-known online retailer has access to client’s info such as their names, search addresses, histories and payments. Amazon uses this information for efficient consumer care and personalized suggestions, having all of your information on hand.

      2. Netflix

        The video streaming service has access to all of the insights and seeing practices of all users around the globe. Netflix analyses the information and picks the content that will be appealing for any audience internationally and chooses particular movies or series that will carry out well with certain people.

      3. Starbucks

        How does Starbucks remain so successful with all of their branches? They analayse huge data to decide on every new opening place by location market, traffic and customer habits. It helps them to determine whether opening a brand-new store will be successful for the brand name and bring them considerable earnings.


Benefits of accessing and evaluating data in eCommerce are unlimited and it is important to understand the insights of client’s behavior and interaction with the site, in order to achieve success. By gathering information, you will have the ability to improve customer care and offer customized experience, improve your sales, optimise product’s rate or perhaps decide on your new shop’s location. Consider using the techniques listed below to beat your competitors:

    1. Recommendation System
    2. Customer Lifetime Value
    3. Improved Customer Care
    4. Predictive Analytics
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