The digital age is changing the way businesses are run. To compete successfully in this digital age, every company needs to leverage data analytics and make decisions based on real-time information. While many companies use data analytics to understand consumer behavior and trends, others use it as a tool for improving operations within their organizations.
But what about Amazon sellers who use both platforms? The internet giant offers many ways for merchants to grow their business through its platform, but it also provides tons of data sellers can use for better business insights. Here are some ways how:
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Enhances Product Research and Intelligence
You can use data analytics to help you understand the market. Amazon is a highly competitive and dynamic marketplace, but data analytics can help you keep up with and adapt to changes in the market. The more you know about what your competitors are doing and how customers are reacting, the better decisions you can make regarding your own business.
Data analytics also helps you understand customer behavior through marketplace intelligence. It’s an essential asset for all types of businesses, but it’s beneficial for sellers on Amazon because their products are sold through an e-commerce platform rather than directly to consumers. With Amazon marketplace intelligence, sellers can learn more about their customers’ preferences and improve their marketing strategies or offer more personalized customer service experiences.
Provides Clear Insights for Better Decisions
Data analytics is a powerful tool for helping you make better decisions. It can help you better understand your customers, competition, and yourself.
When it comes to marketing, in particular, data analytics is essential. The old approach of pushing out the same content from one platform to the next isn’t as practical anymore due to changes in how consumers interact with search engines and social media sites. You need new ways of looking at things that consider these factors—and data analytics will give them to you.
Data analytics also helps you understand your product better because it allows for a deep dive into all aspects of what makes up what Amazon calls “product assets”—images, descriptions, and keywords associated with each listing are just some examples.
Optimizes Inventory Management
Keeping track of your inventory can be challenging if you’re selling on Amazon. Data analytics can help you respond to sales and demand in real-time, saving both time and money for the business.
Here’s how:
- Data analytics helps you make better decisions about buying inventory. For example, if a product isn’t selling well on your site, data analytics will let you know when it’s time to buy more stock or try something new altogether.
- Data analytics helps determine which products are best suited for sale by analyzing historical sales data from past periods. This gives sellers insight into what they need to purchase next based on past trends, so they’re prepared when new products launch.
- Data analytics helps determine which products are best suited for promotion within their existing product lineups by analyzing historical sales data from past periods. This allows sellers who want maximum exposure across multiple channels an easy way to promote those items without competing with each other at any given time during the day—or week!
Improves Marketing and Advertising
Data analytics helps you understand what ads are working and which ones should be abandoned. It lets you see helpful patterns in the data when deciding how to advertise your products.
For example, let’s say you’ve been running a Facebook ad campaign for your business. Do you want to know if it’s worth continuing or if it should be cut off and put onto other channels like Instagram or Youtube instead? Data analysis will show whether or not Facebook is an effective way of reaching customers at this marketing stage by analyzing traffic conversion rates from website visitors into sales from those visitors.
Offers a Clear Multichannel View
You can use data analytics to gain a clear multichannel view of your customers. Such insights will help you understand the customer journey and identify ways to implement multichannel marketing. This can lead to increased sales, repeat business, and positive reviews.
To get started, try looking at how customers behave across channels. You’ll want to look at when they’re making purchases, where they’re engaging with your brand, who they are engaging with, and what other messages they may be receiving from competitors or brands simultaneously. Doing so will help you understand what is working well for them right now so that you can build on those successes while also identifying areas where there is room for improvement.
Helps Understand Customer Acquisition Cost
You may have heard the term customer acquisition cost (CAC) before, but you might not know exactly what it means. It’s a metric that compares how much a company spends on acquiring customers with how much they make from those customers.
The formula for CAC is as follows:
CAC = Total Cost of Customer Acquisition – Customer Lifetime Value
For example, if you spend $2,000 in advertising to acquire 100 customers and those customers spend an average of $20 each on your products throughout their lifetime, then your CAC would be ($2000-$200) / 100 = $19 per customer acquired.
Conclusion
Amazon is fast becoming the go-to place for new and used items. With its many benefits and features, selling on Amazon has become one of the most popular options for entrepreneurs who want to start their own businesses.
However, it’s not easy to succeed on Amazon in today’s competitive environment. You need to deeply understand what your customers want, optimize your inventory management system, and ensure that all aspects of your business run smoothly across multiple channels.
Data analytics offers companies access to critical insights that can help them achieve greater success—from product research and intelligence (PRECI) to optimizing inventory management (OIM). When you bring all this data together and use it for various purposes by leveraging marketplace intelligence, you can get an edge over other competitors.
