Big data is helping companies improve the shopping experience, increase customer satisfaction, and boost profits.

By now, we’ve all heard the story of how Target knew that a young woman was pregnantbefore her father did . Apparently, when a woman starts buying lots of unscented lotion, nutritional supplements, and cotton balls, there’s a good chance she’s expecting a baby.

A lot of people balked at the idea that a retailer could learn so much about them based on buying habits alone, but big data is helping all sorts of companies improve the shopping experience, increase customer satisfaction, and boost profits. The implications are huge, and we’ve only just begun to scratch the surface.

Big data allows e-commerce companies to:

1. Compete on value rather than price.

Amazon is the e-commerce standard when it comes to smart, effective pricing. It can easily access its competitors’ pricing data and respond quickly with its own deals — changing some items’ prices up to 10 times a day. The industry-wide shift to dynamic pricing means that companies will no longer be competing on price alone. They will now need to establish a reputation for offering their customers the best value and the best experience.

2. Personalize every interaction.

Amazon is also the leader when it comes to using big data to recommend products its customers may like. Amazon’s “Customers who bought this item also bought…” recommendation feature increased sales nearly 30% when it was first implemented. This is a simple and incredibly effective way to keep customers on a retail site and keep them buying.


My company sells custom menswear online, and we’re building a database of men’s body measurements and style preferences. In the future, when a customer provides his height and weight, we’ll be able to generate a standard measurement that’s a perfect fit without ever having to measure him. The benefit is removing the extra work for the customer and making it incredibly easy to buy something that’s tailor-made for him.

3. Predict trends.

Recording our customers’ measurements and preferences doesn’t just help us tailor the shopping experience to each individual. We can also analyze the most popular fabrics and cuts so we know what to keep in stock. This allows us to negotiate favorable rates with suppliers and tailors.

Today, companies are using social media and their own resources to track trends on what and how consumers are buying. Record label EMI, for instance, pulls data from third-party sites and apps to understand listening and buying patterns to predict its product demand and target its advertising.

4. Reduce shopping cart abandonment.

Companies can also use cross-device tracking to reduce shopping cart abandonment rates. EBay research found that the average consumer uses as many as three or five devices or platforms during the course of her buying journey. Mapping this journey with data allows retailers to help customers transition from one device to the next and complete their purchases.

5. Improve the customer experience.

Consumers might have reservations about their favorite retailers knowing intimate details about their lives, but they’re going to love the results in practice. Sharing all those personal tidbits is helping companies like CNA identify fraud and prevent customers from having their identities compromised. Retailers can use information from live transactions and other sources (such as social feeds and geo data from apps) to prevent credit card fraud in real time.


While it might seem eerie for Target to know about major life events before your family does, the applications of big data are, by and large, major wins for both retailers and their customers. Competing on price alone will soon be a thing of the past as companies rely on data to create more seamless, personalized shopping experiences.

OwnOnly is an online retailer of custom-made men’s suits and shirts.