Etailers increase dependence on algorithms to push sales

Etailers are increasingly looking at smart ways to push their sales. All the more due to the renewed pressure to reach profitability, online commerce companies are looking at streamlining the products that they display to each customer to increase the probability of a sale. Algorithms and data analysis are some of the solutions that are helping etailers to narrow down the number of items on display rather than bombard the shopper with a host of products.

Experts agree that by displaying an infinite number of products will result in the shopper eventually losing interest. Therefore, it would be greatly advantageous to use algorithms to display relevant products. Most companies are going with Apache Hadoop’s hbase, an open source software to analyse the data.

Betting on algorithms

Sandeep Aggarwal, founder of Shopclues, swears by the technology,

“Algorithms are the base for everything online shopping, shipping, packaging, payments, price points etc.”

Algorithms help create recommendations based on the shopper’s browsing history.

Rajiv Mangla, CTO of Snapdeal, says this will help increase the sales conversion rate. He says,

“We want to detect patterns in user behaviour to improve conversion.”

Not just that, algorithms helps decide the price as well. Sudipta Ghosh, leader, data and analytics at PricewaterhouseCooper explains,

“If the price point is too low people might perceive it as too cheap to buy and abandon purchase. This point is determined by algorithm.”

Sandeep Aggarwal explains how the data is applied,

“We have to use this basic data for strategic advantage. So, if a user has not logged in for 3-4 days the listing might be stale and the algorithm refreshes it. If a customer does a lot of cancellations, the cash on delivery option for him is automatically disabled.”

Data reading software also helps in recognising that a product or a specific category has become outmoded, and will not garner sales.

Proof of the pudding…

Is in the eating. Shopclues has witnessed a tenfold growth in its sales in the last year. Mihir Kittur, CEO of Ugam Solutions, a data analytics firm, says that using algorithms help to get a 40% sales conversion rate in the short run. All this sounds really good for ecommerce. As Karthik Bettadapara, CEO of Dataweave says, this is the age of targeted analysis.