Where Predictive Analytics Is Having the Biggest Impact


A couple of decades ago retail business owners would dream of reading their customers’ thoughts to predict long and short-term trends, set the right prices, and make a thousand of other alterations to avoid loss and generate maximum revenue all year round. It turned out that no magical powers are required to know what a customer wants – data analysis is more than enough. And e-commerce is right where predictive analytics is having the biggest impact.

What Is Predictive Analytics and How It Functions

Actually, the name speaks for itself, but let’s get it clear. Predictive analytical technology relies on specific software that is trained to check customers’ behavior patterns, analyze market trends and prices, predict monthly profits, make retail more individual-targeted and protect businesses from unexpected falls, ensuring reasonable confidence in sales. Big data is an inexhaustible source of valuable information crucial for boosting revenue – and that’s where predictive analytics in retail and E-commerce ( plays the key role.

Benefits of Predictive Analytics: Ecommerce Usecases

It’s fairly easy to imagine the whole scope of benefits predictive analytics brings to the ecommerce domain, making businesses stronger and ensuring the highest quality customer experience. Still, let’s get more precise about the practical side of the technology that makes modern retailers happier.

Foreseeing Trends

If you’re generally familiar with marketing and ecommerce, you know that it’s all about detecting trends and making money while it’s gaining momentum. With predictive analytics technology retailers can see the most clickable and purchased items to have a clear understanding of what has to be stocked. How do you think Amazon has become so popular? Because it knows exactly what you want to buy next week and prepares for it.

Placing Smart Recommendations

We are already familiar with the feeling of being watched when it comes to online shopping or even mere googling. Recommendations follow us on every site or social media we use. And it actually works. but it’s not predictive analytics. Smart recommendation technology collects as much data as possible to predict the items that might catch customer’s eye on a certain retail website. It analyses your purchasing history, clicks, and average money spent. It might be frightening, but if you’re, for example, a vegan, predictive analysis systems are likely to be aware of it and you’ll never see a sign of non-plant food recommendations when visiting a delivery store. Care as it is.

Building Reasonable Pricing

There’s no surprise that the price factor plays a great role in ecommerce success stories. With predictive analysis development, we saw the arrival of the term “dynamic pricing”. The simplest example of “ancient” price building is that summer clothes are most expensive in the late spring-early and middle summer season. You would agree that it’s not so “dynamic”. Today we have Airbnb, Uber that change their prices swiftly, based on numerous parameters. Retail ecommerce stores also use dynamic pricing strategies to make the most of an item when it becomes trendy.

Eliminating Fraud

Safe transactions are the highest ecommerce priority. Let’s see how predictive analytics is impacting patient care and saves money and nerves. High-quality predictive software has developed multiple anti-fraud models that encompass additional payment checks and identity verification, analyses of buying history, payment preferences, and other details to reduce fraud probability to a minimum. Another advantage of anti-fraud models and patterns is that they can be adjusted to a particular type of business since they have different levels of susceptibility.

Enhancing Supply Chain

“Out-of-stock” is the most disappointing phrase when you finally see an object you’ve been craving. Obviously, lack of items in stock decreases the level of customer experience by making one wait for restocking or go to another retailer. Here’s another case of how predictive analytics can be used in business ( It makes it possible to see which products will be in demand next month and let retailers efficiently plan, supply, and transport them from depots. Good-quality predictive analytics software is the reason why Walmart never disappoints customers with “out-of-stock”.

Making Use of Business Intelligence

Customers do not always know what they want before they see it. So the task of retailers is to show the product a person might want and might like, based on a combination of individual purchasing behavior, clicks, reviews, likes, and saves. All of these form the basis for smart predictive analytics and leave both customers and retailers happy.

A Little Fly in The Predictive Analytics Ointment

There’s no use in speaking about predictive analytics pros and cons, as advantages far outweigh any cons. However, there’re a couple of challenges you might face when incorporating predictive analytics into a business routine. First, predictive analytics don’t work when global changes take place. The pandemic has obviously messed up all the trends, plans, and forecasts, resulting in a shortage of certain items on the market. The good thing is that predictive systems can be adjusted to emerging realities. Second, the quality of predictive technology is in direct proportion to the sufficiency of customer data and its relevance. Without adequate data, analytics is of no use.

The Bottom Line

Ecommerce has obviously overridden traditional shopping and analysts strongly doubt that this trend is likely to be reversed. Since the competition between online retailers is going up with lightning speed, one of the smartest things you can do to stay afloat is to incorporate predictive analytics into your business routine. It might seem that a small Instagram store doesn’t need analytical software because it’s far from Amazon size, remember that big things start small. So by welcoming the technology today, you open the door for tomorrow’s success.