Benefits Of Predictive Analytics

Predictive analytics gives eCommerce merchants the gift of informed decision making. Rather than having to follow gut instinct, predictive analytics allows decisions to be made based on data. This creates certainty in decision making, and can help steer your business in the most beneficial direction to go.

What Are Predictive Analytics?

Predictive analytics provide insights into future behavior by data collection and analysis. Machine learning, artificial intelligence (AI) and statistical models can predict trends based on previous customer actions. You can understand customer preferences, and learn how best to equip your business to deal with the demand that is set to take place. This helps make sure you stay on top of your game in a competitive marketplace, as well as keeping your customers happy. 

Predictive vs. Traditional

Traditional analytics uses past actions and behaviors to understand what happened in the past within your business. This is very useful and can help you move forwards. However, predictive analytics uses AI and machine learning to make informed decisions about what lies ahead. It can understand trends and movements that have taken place to predict what is coming next. 



Benefits Of Predictive Analytics

There are several benefits to using predictive analytics within your eCommerce strategy. Being more informed and making decisions based on projected data rather than without is only a positive. Let’s take a look at some of the benefits.

Improved User Experience

Predictive analytics will let you know how your customers will behave in the future. This means that when they do act that way, your business will be ready for it. This can help meet customers’ needs moving forwards, as you can foresee customer expectations. This will reduce the potential of customers to be disappointed.

These predictions can help you create more accurate personalized recommendations, improving the customer journey and boosting sales as well as user experience. Facilitating lifetime value customers is only a good thing for your business.

Improved Inventory Management

Predictive analytics lets you know how much your customers are expected to purchase. This can reduce any wasted inventory, which can have negative financial implications for your business. Having the right items at the right time will improve customer satisfaction and boost sales, both of which are great for your business.

Better Pricing Strategies

As we learned from dynamic pricing, the demand for certain products at certain times can influence the way pricing works. When products are trending or in high demand, shoppers are willing to buy more. If you have excess stock that isn’t shifting, lower prices work better- but this is not the ideal situation to be in. Predictive analytics means that you can forecast the correct prices for your products, increasing earnings and attracting customers.

Cost Savings

Every penny counts when it comes to running a successful eCommerce business. Optimizing inventory levels is very important in eCommerce. Making sure you have the correct amount of stock; not more, not less, than is expected is very important. This lowers labor cost, as well as wasting stock. This can also help boost your green eCommerce and sustainability mission, which can help popularity with customers. This is something that shoppers look for these days before making purchases. 



It is clear that there are multiple reasons why using predictive analytics can benefit your eCommerce business. Along with boosting customer satisfaction and user experience, these analytics can help save your business money and boost revenue overall. This is just another example of one of the ways that AI and machine learning can optimize your eCommerce business.