Speaking at a session on E-commerce analytics at Exchange4Media’s Pitch Analytics in Action conference, Ashok Banerjee, VP (Engineering and Supply Chain) at Flipkart said that analytics helps the companies in making trade-offs and offer a better service to customers.
He said that segmentation of customers is key for e-commerce companies and companies should segment their customers through various parameters like category, gender, region, seasonality and the current trend.
However, he also pointed out that Analytics can only be an enabler in decision making and is usually unpredictable, unlike operations.
Company’s Phase of Life: Banerjee said that a company is in a specific phase in the phase of life at any point. These include Word of Mouth, Offline marketing and susceptibility to positive and negative news. He noted that companies can expect exponential traffic while in the word of mouth phase, while traffic from offline marketing is usually a step function with a sharp decay.
However, he also pointed out that not all products will receive marketing via word of mouth. For instance, people will share a fancy wrist watch they bought but they will never speak about what undergarments they bought.
He also said that companies are susceptible to positive and negative news depending on the product. For instance, even if 1 million people say a specific baby product is fantastic and only one says his child lost an arm, users will probably not buy the product while in the case of a chewing gum, people will probably buy the product even if some people say the product is not great.
Banerjee said that social media doesn’t drive significant sales just as yet and can act as a deterrent at times.
He also added that majority of the the times, the critical differentiator between the competing companies is the ability to rapidly experiment various ideas, chuck out the losing ideas and pursue the winning ideas.
In the same session, Kunnal Sharma, Business Head – Global Remittances at TimesOfMoney claimed that TimesOfMoney has over 1 million customers across 23 countries. He also added that India receives the largest amount of remittance globally amongst all countries and the country received remittance of over $60 billion last year. The company was recently acquired by UAE-based Network International and currently offers two different money remittance services – Remit2India, an India based remittance service and Remit2Home, a global money transfer service.
Sharma said that behaviorally companies who want to succeed, should know its customers. He said that during the initial stages of Remit2Home service, they thought they will be able to understand NRIs and talk to them, since they understood Indians through its Remit2India service.
However, he noted that the moment they started speaking to NRIs, they realized that NRIs were a different world altogether, since their needs were different and they had their own way of working. This led to the company relying heavily on data they had generated to formulate the service, rather than relying on their gut.
Change in Consumer Habits: Sharma said that the consumer habits has changed over time. He said that in the 1990s, the only analytics available was the data provided by the shopkeeper, but now the consumer allows businesses to track him for data through various means. For instance, a consumer on an e-commerce platform is now giving away his IP, allowing businesses to store cookies and offering information on what he clicks and how he navigates throughout the site. Businesses can then analyze the data to gain insights into their consumer behavior and the market trends.
Sharma stated that during the initial stages, they had created only two customer segments in their database – customers who were transacting and those who were not transacting.
However, they later felt the need to know more about their consumers in their database, when they had to expand their business.
This led the company to segment their data to 10 segments across various parameters. Following this, they also created a value score and a risk score for each user. While the value score offered the value brought by the customer who was transacting on the platform to the database, the risk score provided information on the fraudulent behavior of the customer (if any).
Data Sharing Between Companies
In response to an audience question, Banerjee stated that customer-level data sharing between companies can greatly help all the companies involved but it cannot happen due to the privacy expectations of the customer, since users will not be expecting this exchange. Banerjee added that companies can instead anonymize the user data to a demographic level and share it with other companies.
Sharma added that various governments like the United States, United Kingdom and Australia government already offer a central repository for user data, where companies can access requisite data for their services and pointed out the need for such central repository in the country.