The Benefits of Data Science: How Predictive Analysis Helps Boost Online Sales

We’ve all heard of this new superpower that businesses seem to have acquired overnight. Data Science is almost a taboo subject in the world today because it is implied that businesses use it to catch and divert our attention, motivate purchase decisions, and drive our overall interest in something when it benefits them. Even if our interest in that product or service was not there before.

But while data science can be looked at as this evil thing, it can also be looked at as a tool that can be used responsibly without violating any rights and that could make any business grow. It could even make the difference between a business that grows for profit or simply because it can, and one that grows for the benefit of its clients.

That said:

The benefits of data science are far from being a one-sided concept. While data science will most like be used by companies to boost sales or something else, it may also be used to design and manufacture products that meet the needs of the consumers better than they did before.

But how does a company go about this exactly? How does data science actually help businesses? And how does it boost eCommerce sales? 

More importantly:

How can it work in favor of your online vape store?

These are all questions that we aim to answer in the following article. But as with everything, we have to start by the basics before we can get into the weeds of it.

TABLE OF CONTENTS

What Is Data Science?

The Best Data Science Practices

Conclusion

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What Is Data Science?

Data science is an interdisciplinary field of study that uses data extrapolated from specific research to generate insights on the subject in question. It requires the use of statistics, industry knowledge, math, computer science, and a few other skills.

In other words:

Data science is how a business can give meaning to the information it receives from research and studies. Data science has quickly become the driving force behind product innovation and marketing strategies. 

The benefits of data science are particularly palpable in the e-commerce and retail industries where information can be collected far more quickly and easier than in strictly physical businesses like brick and mortar vape shops. 

The information collected by online retailers can be used to boost online sales or provide insights into the best way to increase sales by formulating a predictive analysis derived from the collected data.

With a well-structured predictive analysis, your online vape store can predict its purchases, profits, losses, and even motivate customers into purchasing a specific product by tracking and understanding their behavior. That last one being somewhat of a sketchy subject due to the moral implications and potentially negative legal results.

By analyzing the data your company can learn the sore and high points of its customers. Giving you valuable insight into how to market your product and brand. 

Of course, to do this, you first have to get your hands on the information that will allow you to do so. And that’s where things can become a little tricky.

Every year, online shoppers seem to get pickier and pickier about the type of information they ‘let slip’ online and are a lot more skilled at becoming ‘digitally invisible’. Not to mention that legality and regulations around using customer information for profit are also getting stricter every year. 

This means that, as a business, you need to be extremely careful about the type of data you use and how you get your hands on it. While tempting, getting your information illegally could mean the downfall of any business, resulting in unpayable fines and irrecuperable brand equity.

The Best Data Science Practices

There are several tools you can use to collect and analyze data. But we’ll touch on those in more detail in a second article on this subject. The best practices will tell us the main tools that successful businesses use to procure better results when it comes to using the data collected.

1. Recommendation Engines

Recommendation engines are algorithms that analyze the online behavior of your client and make them recommendations based on their past purchases and interests. This is very much like when Netflix suggests a movie, your Kindle suggests a book based on your past reads, or Amazon suggests you purchase 1 or 2 more items with the product you’re about to buy.

These algorithms are powered by machine learning technology that keeps track of the consumer’s behavior and analyzes the traffic that comes in and out of your website.

2. Market Basket Analysis

Another powerful algorithm that can trigger upsells from online customers based on their first purchase or the contents of their carts. While Amazon suggestions are birthed from a recommendation engine, they also have a trace of market basket analysis in them.

Market Basket Analysis is the concept that by buying a specific set of products, the customer is more or less likely to buy another specific set of products. For instance, if you customer both a vape device kit from your website, chances are that their next purchase will be e-juices, nic salts, or adaptors and other gadgets for the device.

Market basket analysis may also allow you to send the right discounts and newsletters to the right customers. For instance, it probably won’t do much to send an email with discounts on nicotine salts for clients who have strictly consumed CBD in the past based on their activity on your website.

3. Warranty Analytics

Warranty analytics will not help you boost online sales, but it will help you keep track of transactions and operations that could drive profit and revenue down. By tracking the lifetime of products and the activity of returns or claims, warranty analytics may help you detect fraud attempts and get a better understanding of how to handle product returns.

By detecting anomalies in warranty claims, your business can save money that will ultimately allow you to keep the profit to the levels where you need it to be.

4. Price Optimization

Defining pricing is a big deal for any successful retailer or manufacturer. That is why businesses invest time and effort into defining the right pricing for a product. That’s why your online vape shop defines a percentage profit and decides to negotiate with some vendors depending on how much revenue they stand to bring to your company.

While costs are the first thing you should consider when defining pricing, other very important factors come into play. These include the ability the customer has to pay for a certain product, the value it adds to the customer, price flexibility of the same product across multiple platforms, and customer location. Fortunately, these are all bits of information you should have access to.

5. Inventory Management

Managing inventory effectively involves having enough to react to sudden spikes in sales but not having so much stock that you won’t sell it all. By collecting sales data and analyzing it, your team may come up with an efficient inventory management strategy that will allow you to do so.

6. Customer Sentiment & Brand Equity

Product reviews and social media allow companies to know first-hand what their customers think about the brand. By collecting this information and analyzing it, your vape shop can get a pretty good idea of what they need to do or stop doing to keep growing and maintain a positive customer sentiment towards your brand.

Analyzing customer sentiment and brand equity will also help you address specific claims and turn unhappy customers into happy ones.

7. Merchandising Algorithms

Merchandising is any activity that a retailer does to drive sales and customer interest in a brand. Merchandising is commonly related to visual designs and influences. By following trends and competitor benchmarking a merchandising analyst can determine what visuals and other merchandising practices should be followed for better results. 

Conclusion

Data science for business is a practice that helps companies boost sales and provide an overall better service through the predictive analysis of collected customer data. Some of the main benefits of data science include maintaining brand equity, developing efficient inventory management strategies, and boosting online sales.