Different technologies of Big Data in

E-Commerce

Submitted To: Prof.Balakrishnan Unny

Submitted By: Group No. : 3

Akshay Kathuria (181107)

Nitesh Sharma (181141)

Akanksha Barnwal (181203)

Premjit Sahoo (181240)

Akshay Khushalchandra Upwanshi (181305)

Submitted On: 07/02/2019

Introduction

Everything we do either online or offline is a data source. The ability or methods to measure
and collect data is improved with changing technology. In particular, we understand this
world to study the behavioural trends.

But the problem they face today is that technology is very expansive and there is huge data
available. Systematization, research and understanding of this information has become more
complex than ever as it is full of numbers, facts, proportions, and unlimited perceptions.

Big data has been going on for many years in the digital world, but that's a sad thing, it's a
concept that others do not understand at all.

What is Big Data?

Big Data is a very common word in today’s generation where it has got huge application in
businesses. It can be used to solve many problems, take crucial decision and many more. In
this paper we would focus big data influence on one aspect of the business that is e-
commerce.

This data offers insight for e-commerce businesses. E-commerce business owners can take
the information from big data and use it to study trends that will help them gain more
customers and streamline operations for success.

This data contains information about e-commerce activity. E-commerce owners can capture
information from a large volume of data and exploit it to explore trends, attract more
customers, streamline the business, and succeed.

E-commerce involves use of both business and technology , it require flow of information in
the form of inventory , sales data , payment data , delivery information and many more and
all this information collected on big scale converts information as big data , thus e-commerce
players require use of big data processing system to run their business profitably.

E-commerce can use the big data for the analysis of sale, tracking of faulty transactions,
forecasting supply and demand and many more things.
E-bay is one of the known e-commerce company. It has about 164 million active users on
daily basis. These many users create big data and the challenge they are facing is the
processing of this data to understand the buyer’s behaviour and on further scale to come up
with steps which can drive sales even further.

E-bay has used big data to make user experience better and personalized; it has also used the
technology to detect fraud by employing machine learning based on analysis of big data of
previous transactions.

Alibaba is another big player in the e-commerce industry today. The e-commerce giant
employs big data for credit-risk assessment for small business. The company carry out the
analysis of cash flow, behaviour of customers and suppliers and sales growth.

Alibaba is another key player in the e-commerce industry. One of the purposes that Alibaba
uses big data for is the assessment of credit risk for its small-loan business. This is done
through the analysis of cash flow, of the behaviour of suppliers and customers, and of sales
growth.

Big data and their distinctive characteristics in the e-commerce

Environment:
The current perspective of e-commerce is full of large amounts of data used to solve issues
related to business. As a result, the use of large data in e-commerce has expanded
"explosively" through all kinds of new technologies that create and record data like social
networks, mobile phones and the Internet. Using efficient storage and processing capabilities
and state-of-the-art analysis tools, ecommerce companies can easily reduce costs and
increasetheir sales and benefits, all thanks to big data. In particular, big data is different from
traditional data used for analysis due to their intrinsic characteristics (volume, velocity,
variety, veracity). All these elements are being explained below in context of their
implication on e-commerce.
 o Volume:

With growing Internet technology, the amount of large data in the e-commerce world
continues to increase. E-commerce companies wanted to use this huge amount of data to
make quick and smooth decisions. Often unstructured data is collected in big data
environment and it may contain data generated from video, images or mobile technology.
Therefore, it is rare for large amounts of data to be clear and error-free. Using data that
decision makers can use immediately is a new problem. However, using big data can make
real-time decisions in the e-commerce sector.

o Variety:
The word ‘variety’ indicates that big data has been derived from multiple sources that can be
structured, semi-structured or unstructured. Variety is another essential feature of big data as
they are produced from a broad range of sources and formats which include text, click-
stream, tweet, audio, video, web, log files and more. Different analytical and predictive
models enable information from different functional areas to be used.

o Velocity:
Velocity refers to the data generation frequency and/or the data transfer rate. It is important to
understand the velocity of big data at which big data must be and synchronized in business
processes, decision-making, and improved performance. As explained by Gentile (2012), the
term ‘velocity’ refers to the rate of change of big data and the speed with which big data is to
be used in business decisions to add value. Because data is secured more quickly, data can
open new opportunities for organizations.

o Veracity:
Another important feature of big data directs to the uncertainty associated with certain data
types. This data needs to be verified thoroughly and full quality compliance and safety issues
needs to be maintained. High data quality is an essential requirement of the BDA for better
predictability in the e-commerce environment. Therefore, a check is required to generate
verified and relevant data and to be able to sort incorrect data. Verification in the data
management process is even essential because the presence of incorrect data can impede
decision-making by management. Similarly, bad data is of little importance for increasing the
enterprise value.
Different technologies of Big Data used in E-
commerce:

1. Predictive Analytics: An advance analytics that uses both old and new data in
order to forecast behaviour, trends and activity. To do this, machine learning
algorithms, analytical queries and statistical analysis techniques are applied to the
dataset in order to create predictive models that specify numerical values (or
estimates) for the likelihood of specific events.

How predictive analytics can be useful in e-commerce business?

Following are some areas where application of predictive analysis is seen:

I. Increased market analysisi.e., help in understanding the buyer behaviour and

preferences

The e-commerce sector is changing at very fast rate and customers are expecting more and
more customized experiences. For any business to succeed understanding buyer’s behaviour
is a must. All customers do not interact in the same way with an ecommerce store. Different
customer has different desires and for understanding every taste and preference certain
variable elements are used by predictive analytics.

Predictive research, which integrates with analytics solutions, enable e-commerce companies
to analyze click activity in real time based on purchase history and product preferences.

As continuous analysis is done by predictive analysis, machine learning helps to provide more
credible and latest data to the users. Some of the solutions of predictive analysis are made
available on cloud as it is in accordance with several e-commerce platforms.

So, in order to understand the trends in the market and change in demand we need lots of
useful and relevant data which is provided by predictive analytics as it will be an integral part
of the process which will further help to understand the choices of the customer.
As time passes by predictive analytics will help companies to understand the customer
preference in a more precise way by tracking the peak time for shopping or which product is
searched most. In the coming future the companies will work on their marketing strategies,
shopping process, advertisements using big data to attract more sales and in order to compete
in the market.

II. Predictive Analytics can better help in Product Promotion and Recommendation:

Even customers in e-commerce stores do not have different expectations because salespeople
make bespoke recommendations for future true store customers. In the age of digitization,
where the vast majority of consumers want to make purchases online from the comfort of their
own homes or from wherever they are, product referrals are quickly becoming the key success
factor for the e-commerce business. In order to achieve maximum conversion rate the online
retailers are constantly working on improving their recommendation capabilities. This can be
done by harnessing the predictive analytics potential. It will help customers to provide better
recommendations based on their past shopping history, price range they prefer and browsing
pattern. By combining the efforts of both predictive analysis and machine learning, the data
can be collected and correlated from different sources such that it can provide more
customized recommendations to customers.

Also, predictive analytics not only help in recommending better products but also in driving
targeted promotions. This can be done by closely analyzing the old successful campaigns and
then providing offers to the relevant customers.

International retailer Macy used analytical predictions using analytical solutions that provide
improved targeting to the registered users of their website. During the first three months of
developing analytics solutions, Macy's conversion rate grew by 8 to 12 percent. It is done by
helping customers to provide better recommendations based on their past shopping history,
price range they prefer and browsing pattern.
III. Predictive analytics in pricing strategy:
Customer is smart, when it comes to shopping,especially when it comes to purchase on e-
commerce, a user compares the price and other benefits before making purchase on e-
commerce.

For an e-commerce player it’s difficult to keep a check on their competitor’s price every
moment however with predictive analytics we can find out about the competitors’ price
strategy and then strategies accordingly.

E-commerce portals must constantly forecast product price trends through festivals and at the
time of peak season. Using predictive analytics, companies can improve pricing models for
products by setting optimal values in the desire of maximizing conversions. A robust analysis
solution can include analysis to analyze historical data of multiple products, analyze customer
feedback on previous price trends, evaluate pricing strategy of competitors and identify e-
commerce companies pricing models.
IV. Predictive analytics use for easier and safer online payment ,i.e.,
minimization of fraud

One of the major reasons that online shoppers hesitates to shop online is vulnerability of e-
commerce portals to fraud.Thus in order to tackle this problem analytics solution can be
implemented along with the predictive analytics such that they help to reduce the credit card
or online fraud which will result in high conversion rate. Analysis of customer past behavior
and their product purchase will help us in doing that. Predictive analysis is used by e-
commerce companies in order to detect the most vulnerable product category and thus take
actions accordingly.It also helps to identify fraud even before completing the transaction.
In order to minimize fraud, analysis of customer buying patterns, payment mode and browsing
patterns using predictive analysis is done. Machine learning along with predictive analysis
helps e-commerce platforms to reduce fraud and prevent them from occurring again by
defining certain set of rules and automation.

Thus, predictive analytics contributes significantly to facilitating and safer online payment.

V. Supply Chain opportunities using predictive analytics:

As we already understood how predictive analytics helps to recommend relevant products to

the customers and finding the most popular product/categories. Also, it can help online retails
to understand the supply and demand of any product.

E-commerce companies use predictive analytics in order to improve their sales plans and
forecasts, improve order process and delivery to the customers. This will greatly
improvecustomer experience and help in satisfaction of the customer with any particular e-
commerce brands.
It can also help in determining the revenue from certain categories or avoid situation where a
desirable product get out-of-stock. As soon as the year start, e-commerce want to estimate the
revenue they will generate from the new customers it acquired recently. Approach based on
past analytics would not yield same result as the market is dynamic and marketing tactics
changes from one year to another. Using Predictive analytics , e-commerce player can
extrapolate or predict using even few data, enabling them to design the marketing strategy
looking at the possible revenue the company could make.

VI. Efficient Inventory management using predictive analytics

Predictive analytics will help to manage the inventory more efficiently. By using this
analytics we can predict how much of the product is required in a given time period, that is
precise prediction ,thus saving cost on higher inventory management and also preventing
from the loss of potential sale because product went out of stock.
Analytics would also be used to understand how much time is required in processing a sales
request and completing the logistics part and then receiving the payment. Apart from it, what
products are returned and from where is the product procured.
 2. Social Media Analytics and E-Commerce
This analytical tool collects data from social media sites such as ( Facebook , Twitter and
Google +) and use these data to gain the insights , and the data collected results into big data .
As each day there are more than 35 million statuses updates on fb, Twitter involves more
than 100,000 tweets in just a matter of a minute. Social media is a spider web of all the
people making a virtual community. People communicate,interact, share their opinions and
much more and all these activities have potential to influence the buying behaviour of a
buyer. According to a survey conducted on the people regularly using social media, 71% of
the user made purchase on referrals , 40 % made a purchase after making an item “favourite “
or sharing on their favourite social mediate channel. These findings made e-commerce
players to use social media analytics for given reasons

1) Increase “Competitive advantage “ and “Business values”

2) Enhance the web traffic of customer on the website
3) Connect with customer , understand them and increase the brand loyalty
4) Focusing on customer satisfaction and improving sales and revenue

Social media analytics used several of tools to serve its purpose. Below are mentioned few of
them

1) Text Mining
This tool relies on the text based content on social sites and blogs for making
judgement on the significance of a search. Text that they collect from social media, in
it’sthose choses keywords and then retrieve the significant knowledge from it.
Marketers create a list of keywords related to the product they monitored. These
keywords can be used to understand the customer relation with the product.

2) “Sentiment Analysis (Based on Machine Learning Algorithm)”

This analytical tool uses either “machine learning algorithm” or “artificial intelligence
“to notice customer feelings about the good or service. Each word collected from the
social media is analysed whether the feeling is positive, negative or neutral with the
product. For example “In case if someone tweets that iPhone is awesome “the MLP
analysis predicts the user feelings about iphone5.
 Case- Study of Walmart

Walmart Inc. is a top company in the fortune 500, is referred as ASDA in United
Kingdom. Walmart Inc. is in the retail business and has multinational presence in the
world. In the year 2013, Walmart made purchase of social media start-up called as
“Kosmix”. This start-up focused on e-commerce by developing software application
having capabilities to “search “ and “analyse the social media applications” such as
Instagram , Twitter ,etc. to give insight about user which is more personalized.
“Kosmix” was involved in developing application which they called “Social Genome”
having the capabilities to gather information about relationship with people,topics,
events, product, etc. Walmart renamed the start-up company as “Walmart Labs”.
Walmart Copycat software gathers real time data into their information warehouse. In
January 2013, the company made a claim that its software project can index 60 billion
social media document with the aptitude to see the sentiments on the basis of location
and forecast the trends in all the Walmartstores.

3. Mobile Analytics and E-commerce

Over the years we can see that the internet use in the world has increased to 4 million
users in the year 2015 and this number will increase with great rate. With the
development of mobile phone technology, it has changed its uses from merely taking
to internet surfing, social media, listening music,etc. naming few. With the increase in
the number of mobile phone comes the role of mobile analytics .As we have seen the
average person spends almost 25 mins on internet and 17 and half minutes of the day
on social media, creating big data. This big data can be used to analyse by mobile
analytics by the e-commerce plyers to gain advantage in the given below points

1. Increasing the analysis of customer.

Understanding the customer is important in the 21st century, which can be done
with the help of big data. It provides information on trends,fashion, spikes in the
demands of consumer preferences. The data generated by the mobile can be
utilised to provide the most popular product in the e-commerce store and market
 about it. In case customer searches for something , which the e-commerce player
don’t serve , by the help of big data the e-commerce player would know about it ,
letting them about the new market opportunities.

In 2018, big data analytics was used to understand the “ shopper behaviour and
patterns” such as what product are searched most , what’s the most preferred
shopping time ?. E-commerce marketers use the tools to create market strategies
in line with the analytics findings.

2. Improved Customer Service

E-commerce player believes that “Customer is the real king”. They know the fact
more than 90% of the unhappy consumers will not use e-commerce site in case if they
had past poor customer service experience. Customer service is important factor for
the” success” in e-commerce business.

Understanding Consumer is imperative, but more imperative is to make the

process easy for a buyer to contact the business, solve their issues or queries.
Metrics is important to know fast a customer complete their tasks.

3. Faster and Secured Online Payments

Mobile analytics is used to make the online payment secured and easier. Below
are four ways how big data has changed the payment industry in 2018 with the
help of mobile analytics.
1) Integration of different payment gateways into a centralized one. It reduced
the fraud risk while making it easier for customer to use.
2) Analytics used with big data enabled to understand which transaction is fraud
in real time and the e-commerce players are ready with solution for it.
3) With the help of payment mechanism , e-commerce player are trying to
understand their customer in a better way
4) They can detect between legitimate payment and the fake one which looks like
legitimate one
Case Study of Adidas: “Light you Up “Mobile-Campaign

Adidas had come up with their new product which they called “Adizero F50 soccer cleat”
and to market this product Adidas partner with Mullen, Mullen is an advertising company.
The target segment for this campaign was the smart phone users. The aim of the campaign
was to invite the interested people for the light show organised by Adidas, where they were
introducing their new product. Mullen has used “location-based targeting” keeping 3 mile
radius in their radius for the campaign. They used push marketing strategy through Facebook
or through SMS.

The ad was written as “Adidas and Messi- after Dark Tonight” and then buyer were targeted
toward the landing page where the video showing the event, time and location. All this was
achieved using big data analytics to find customer’s location and then sending the notification
of the ads to them.

This campaign by Adidas and Mullen was successful which make them reach as high as 7.3
million users, more than 45 thousands clicks on the shops and thousands of shares on social
media sites.

Challenges of Implementing Big Data in E-commerce

Today e-Commerce extensively uses big data analytics to create an effective and personalized
experience. It has moved way beyond the traditional data sources like ERP and CRM. But
there are certain challenges that are faced by e-commerce companies in implementation of
Big Data.

 No concrete data strategy-

Most of the e-commerce companies’ focus on the high volume of data in order to ensure
success in implementing big data tools but the problem with it is that randomly collecting
data and analyzing it would not result in any desirable results. They need a coherent and
strong strategy to generate useful results from the data. Companies are not sure about the type
of data they should collect; as a result, a major part of investment made to source data goes
waste.

In order to overcome this challenge, data needs should be clearly defined so that expected
results are produced and resources are optimally utilized.

 Technological challenges

To make big data function properly, industry needs to have significant technology
infrastructure in terms of memory storage, network bandwidth and processing units. Due to
the variable nature of work, the technical requirements are not constant throughout.

The large e-commerce companies are heavily investing to for a sound technical infrastructure
but it is a challenge for the small and emerging players of the industry. They can make use of
tools available like cloud computing for memory storage but they also an expensive
alternative.

 Data Authenticity and Accuracy

Development of big data has witnessed a shift in the analytics pattern over the years. Today is
the age of prescriptive analytics. But these advanced analytical tools will give results only if
the data is authentic and accurate. Wrong or faulty data inputs would provide incorrect
results even if the latest analytics tools are used, which results in incorrect decision making.

Thus data scrutiny and verification processes must be developed for data accuracy and
authenticity.

 Scarce human resource

Big data implementation requires a team of program developers, data scientists and business
analysts who have domain knowledge and industry experience. But big data being a relatively
newer field has less number of specialists.

While a developer may be expert in hadoop, he must also have the knowledge and
understanding of the ecommerce industry.

 Security of the Data

Ensuring data security is crucial especially when we are dealing with large volumes of data.
Big Data security challenges include user authentication, restricted access, compliance of
guidelines and data encryption.
Future and Conclusion:

Finally we can say that Big Data analysis is extremely valuable for e-commerce industry. It
can transform data into business insights and contribute to decision making to extract
maximum value from your business. This can be successfully done by the proper application
of human resources, business processes and innovative technologies.
 References:

 https://dataconomy.com/2018/02/5-ways-big-data-analytics-will-impact-e-commerce-
2018/
 https://www.researchgate.net/publication/264129339_Big_Data_Analytics_and_its_A
pplication_in_E-Commerce
 https://www.researchgate.net/publication/264129339_Big_Data_Analytics_and_its_A
pplication_in_E-Commerce
 https://www.digitalistmag.com/customer-experience/2016/08/30/predictive-analytics-
for-e-commerce-success-04416339
 https://www.instantsearchplus.com/predictive-analytics-crucial-part-ecommerce/
 https://medium.com/swlh/the-importance-of-predictive-analytics-for-e-commerce-
stores-d7ef0ce2d32e
 https://blog.blackcurve.com/why-ecommerce-companies-should-use-predictive-
analytics
 https://conversionxl.com/blog/predictive-analytics-changing-world-
retail/?hvid=352IDw
 https://university.custora.com/for-data-scientists/predictive
analytics/intermediate/use-cases-in-e-commerce-retail
 https://markrichman.com/predictive-analytics-e-commerce/
 https://e2logy.com/blog/predictive-analytics-for-e-commerce-industry/
 https://link.springer.com/chapter/10.1007/978-981-10-7245-1_29
 https://www.business2community.com/ecommerce/top-10-data-driven-e-commerce-
technologies-in-2018-02088870
 https://www.pricezagroup.com/2017/challenges-big-data-e-commerce/
 https://medium.com/nova-marketing-insights/driving-e-commerce-growth-using-big-
data-410427649c78