Data Analytics, Predictive Analytics

Importance & Benefits of Predictive Analytics in the Ecommerce Industry

Importance & Benefits of Predictive Analytics in the Ecommerce Industry

Predictive analytics is a form of data analytics that helps in getting information from historical data sets to identify patterns in the data and forecast future trends and outcomes. Historically, ecommerce companies have been rather slow to adopt it, but giants like Amazon and eBay have understood the importance of predictive analytics in ecommerce and have incorporated it in their operations.

Predictive Analytics can give ecommerce companies an unparalleled insight into their customers. Before this, building and marketing ecommerce stores used to involve loads of guesswork. Now, they can easily see what is working and what is not, thereby removing any area that can pose risk. While the benefits of data analytics in ecommerce services are endless, here are a few of them:

 Better Recommendations

Recommendations are very important for any ecommerce business, but it is more important to get them right. Data analytics helps online stores make better recommendations to customers by correlating data from various sources to make a personalized recommendation. 35% of Amazon’s annual sales come from successful product recommendations made using predictive analytics.


Dynamic Pricing

The traditional approach of ‘one-size-fits-all’ is no longer applicable. With the help of advanced analytics, online stores can sell their products at the best price and make huge profits when the demand for the item is high. Amazon has experienced over 143% increase in net profit between 2016 and 2019 after adopting a data analytics-based pricing strategy.

Optimized Supply Chain

No customer wants to see the dreaded ‘Out of Stock’ label in the place of the ‘Buy Now’ button. According to research, two-thirds of customers who experience an ‘Out of Stock’ situation will choose to shop elsewhere. Top brands like and Amazon have invested heavily in predictive analytics to sell products that have not yet arrived in their warehouses.

Better Customer Service

Good customer service directly leads to higher customer retention and conversion, thus bringing more profit. Predictive analytics helps ecommerce companies provide better customer service by identifying issues in the delivery process, the delivery time of the goods, average response time and other factors which customer service staff can act on to reduce the chance of bad service.

The implementation of predictive analytics in ecommerce can become a huge advantage for any e-tailer. However, implementing it properly can be a huge challenge. Powered by Artificial Intelligence, SPIN Strategy provides predictive analytics solutions that help such ecommerce businesses in making strategic decisions that boost business growth. To know more, visit

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