As if e-commerce in itself wasn’t a revolution, new ways of data extraction and utilization have paved the way for significant revolutions in the e-commerce industry.
In the initial days of e-commerce, online selling was a complex business, suited only to the big boys of retail – Amazon, Walmart, Kroger, Costco, etc.
But with the technology advancing, even micro and small business owners are ditching in-store sales for e-commerce. As a result, more than 90% of all retail sales are expected to be online by 2023.
If you’re a retail business owner, it’s worth delving into why e-commerce has become so effortless and how you can leverage these opportunities.
The Rise of Alternative Data
Initially introduced as a financial concept, alternative data refers to information you can extract and analyze to attain useful insights. Before delving into the concept of alternative data, let’s give you a quick briefing on traditional data.
Back in the day, companies had access to traditional data only. Traditional data sources included sales figures, presentations, financial statements, etc. Although information obtained from these sources was valuable, it didn’t give the complete picture. Some bits and pieces were always missing, which made decision-making difficult.
To resolve this issue, companies started shifting to alternative data. It includes in-depth, actionable information that helps companies understand their customers better. Although alternative data is still largely used by financial companies and hedge fund managers, it’s becoming increasingly popular among e-commerce retailers, too.
Let’s take a look at different types of alternative data.
- Web Data: It includes information on web traffic, demographics, web searches, and more. Web data can come in handy in measuring the results of advertising campaigns or the popularity of products or websites. It also offers in-depth insights into market research.
- Social Sentiment: It includes information extracted from social media websites. Social sentiment enables accurate monitoring of people’s reactions to new products, services, or campaigns.
- Card Transactions: Information collected from credit or debit card transactions can help ascertain retail sales and revenue. With this data, you can analyze how often do people use their cards and for what purposes.
- Email Receipts: Customers receive email receipts when they purchase a product or service. By attaining this information, you can determine what products or services your customers buy the most.
- Geo-Location Data: Geo-location data allows you to find where your potential customers are located. This information can be vital if you want to make location-based decisions.
- POS Transactions: Point-of-Sale transaction information can help you figure out sales volumes, price trends, and the best performing products.
Why Do Your Competitors Don’t Want You to Know This?
Are you hearing about alternative data for the first time? It’s because your competitors don’t want you to know about it. And rightly so.
When it comes to e-commerce, knowing your customers is the key to success. The more you know about their needs, preferences, and behaviors, the more likely you will sell to them successfully.
By extracting alternate data, you can analyze customer sentiment. You can determine what your potential customers are shopping for, and which products or services are they not appreciating. With alternative data, you can also get information on your competitors. You can determine the offers your competitors are running, their prices, and the products and services working well for them.
With so much information in hand, you can make winning business decisions and outperform your competitors. Thus, alternative data extraction remained to be a cryptic concept for years.
But now, with effective data extraction techniques available, anyone can obtain alternative data. One such technique is web scraping.
How to Scrape the Web?
Web scraping is one of the most popular ways to extract data on the web. It is extracting data from websites using automated tools, also known as web scraping software.
If you’re a small online retailer, scraping large e-commerce sites like Amazon and Walmart can provide you with a substantial amount of useful data. However, these sites have large amounts of data. Amazon, for example, has more than 120 million data points.
Extracting data on such a large scale can be a hurdle. Here’s where web scraping tools, like headless browsers and dedicated scraping software, come into play. You can program these tools to scrape a website automatically, collecting millions of data points in a short period.
The only challenge to web scraping is anti-scraping tools, something most websites install nowadays. These tools detect any unusual requests coming from a server. And since web scraping includes sending a large number of requests in a short time bracket, it’s easy to detect. To avoid being detected, you can use proxies.
Proxies for Web Scraping
Proxies are servers that route requests coming from your IP address. These servers hide your original IP address and distribute your requests across multiple proxy servers. This helps you avoid triggering anti-scraping tools, and you can scrape the web successfully.
There are several types of proxies. There are data center proxies that include IP addresses from third-party providers. Residential proxies are also available and affiliated to ISP providers and have an IP address of a real device.
But the best pick for web scraping is a static residential proxy, which is a combination of a datacenter and residential proxy.
Data is the fuel for e-commerce retailers. When you have information about your customers, competitors, and market trends, you’re likely to make better decisions. But to obtain useful alternative data, you’ll need an effective web scraping strategy in place.