Online Marketplaces are the new market maker of this digital economy through. The use of data in Online Marketplace’s is becoming a need and not an option anymore. According to McKinsey retailers utilizing data analytics have experienced a 60% growth in their business margins. Using data analytics in the Online Marketplace is a smarter and more effective way of efficiently developing your business. In this game changing era there are three main players, all of who benefit constantly. Let us discuss this further.
Player 1 – The Consumer: You go on your mobile phone and log in to the Jumia/PigiaMe website. You look for the prices of the latest mobile phone because you want to buy it. Once you find it you take note of the price and log out. The next time you log in and notice that the ads that are there are all about mobile phones and mobile phone accessories. Ads relating to products you have purchased or searched for before. This is contextual marketing and is extremely convenient in helping consumers get served what they really want and like.
Player 2- The Merchant: You, a dealer or merchant, have a store somewhere in town. The sales in your store have increased the last couple of months ever since you created an online store on PigiaMe. In addition, PigiaMe has increased your visibility. It gives you recommendations on what to sell,when and at what price, number of potential clients and how best to attract them.
Player 3 – The Online Marketplace: For this player let us look at Amazon. Amazon is the leading Online Marketplace that use data. Studies have been conducted on their methodology and how they came to dominate the American retail market alongside Wallmart and others. The answer is simple. This is due to using Data.
Data is currently Amazon’s lifeblood. It currently has a bank of data of about 200 Million customers that shows their purchasing behavior. With 3,752,500 unique page visits per day, the amount of data it has is astounding. The data gives the products on demand, what consumers look for in a product, their buying behavior, when certain products are on demand throughout the year etc. From the analytics, it provides their merchants with recommendations. These recommendations include the best prices to sell products, best brands to sell, best times to post, based on unique visits etc. Amazon has generated 29% of its sales from the use of these recommendations. In addition, the number of merchants have increased from about 50% in 2015 to 65% in 2016.
Bringing this closer home, PigiaMe an online classifieds platform in Kenya is providing analytics to merchants to improve business activities. This unique service is being offered by Data Fintech through our Online Marketplace Robo-Advisor. Our product tracks the merchant performance, products and brands on demand on the marketplace. It looks at the best prices and time to sell items. Furthermore, it provides information on the best days and time to post these items on the platform. PigiaMe has about 1,000,000 unique visitors per month and over 5000 sellers that it provides recommendations to hence, allowing them to stay ahead of their competitors. In conclusion, Online Marketplaces have the power to fuel the economic growth by connecting the dots through data and analytics. Data Fintech has created the product that will enable them make this transition.