Data is gold for eCommerce, but which kind of data is the most valuable? Part of this depends on what products you are selling, your brand, or which customers you want to reach. If your usual data-driven strategies don’t seem to be bearing fruit, it may be time to generate new sources of data.
This can be more straightforward than it seems. Potential customers tend to leave their virtual footprints worldwide through transactions, reviews, and social media comments. They also leave actual footprints captured on satellite and give insight into consumer behavior in brick and mortar locations.
The term “alternative data” is often used in the finance industry to track investment opportunities, analyze executive sentiment on quarterly conference calls, or mining information from corporate communications.
Alternative data is also valuable in the eCommerce space and can help you see pricing fluctuations on competing products, consumer transactions, and rival promotions. You can access large datasets accurately for a clearer picture of customer and competitor activity.
How to Obtain Alternative Data?
The means of capturing alternative data depends on the type of data you are mining. If you want to gain access to consumer insights, retail data, reviews, and information on competing websites, web scraping is an effective way of retrieving significant data from the internet.
As the name implies, web scraping lifts the HTML code so you can store the information from web pages on a database. If you have some knowledge of coding, you can design your own web scraper, but if not, there are many AI web scraping AI tools available.
In addition to a web scraper, you will need a proxy server. This server is a go-between connecting you to the internet, but you are visiting to detect your actual IP address without the website. Instead, the website will see the IP address provided by the proxy server.
There are many reasons why you should scrape only if you have a proxy server. Owners of websites usually don’t like the idea of a competitor spying on them. They may discover your IP address and block you.
Scraping involves many actions taken on a website. If all of these actions come from a single IP address, then it is clear scraping is going on, and you could get blacklisted.
To stay safe, for a large amount of scraping, you will want to use several IP addresses or a proxy server that shifts between one IP address and another while keeping yours hidden so you can scrape or browse anonymously.
Applications for Alternative Data
Once you have secured alternative data, you can fine-tune your marketing and product development strategy. Knowing more about your customers and your competitors will give your brand an advantage. Keeping tabs on competing prices, consumer sentiment, and your brand image can determine your company’s next steps.
If you use Grammarly or other writing tools, you may notice small emoticons at the corner of your page that indicate the words’ tone. These emoticons may characterize texts as friendly, serious, confident, or bashful. This is an example of sentiment analysis.
When you scrape text from social media platforms, reviews, and websites, you can perform sentiment analysis with AI tools that zero in attitude and mood. This will save countless hours reading through the texts.
The more advanced AI sentiment analysis tools you use, the more nuance you can pick up from the words. You may even find a sophisticated tool to detect sarcasm based on context or sense that “okay” is blase rather than highly complimentary.
We have all heard the expression “price war” or “bidding war.” When competitors engage in this practice, you do not want to be left out in the cold. If your sales suddenly dip and you aren’t sure why it could be that a competitor launched a promotion with heavy discounts and you weren’t aware of it.
If you are up to the minute on pricing data, your company can outbid competitors, win over customers from rivals, and provide promotions with the best value.
Having instant access to fluctuations in competing products’ prices is essential to retain customers and attract new ones. AI tools can alert you to price changes and provide instant information so you can update your prices and create spontaneous deals.
It may sound like “spying” on your rivals, and in a sense, it is. However, our competitors are likely also spying on your actions, so it may be time to catch up.
Even seemingly minor facts make a huge difference in what you understand about your competitors. Gathering information about how a competing company pays its bills, whether or not it is hiring, and foot traffic in its stores can speak volumes about what they may be planning and how they are winning customers.
The key to effective competitive intelligence research is narrowing down what kind of data will serve you well, obtaining it, filtering, and analyzing it. This can be time-consuming if done by hand, but many AI tools can assist in this process’s various stages.
Even analyzing commercials, promotions, and earnings reports, the company puts out publicly can provide valuable information. The details revealed by alternative data are often overlooked through more conventional information sources, and you will learn significant facts about your competition.
To find out what is working and what needs to be improved, brand monitoring is essential. Scraping data from reviews, social media updates, and eCommerce pages can provide a clear picture of customer sentiment and ways to build brand loyalty.
Analyzing transactions, pages visited and abandoned shopping cart information gives insight into how consumers interact with your brand when deciding to follow through on a purchase and when they prefer to leave their carts behind. Getting a closer look at your customers can provide a wealth of information about your brand.
Alternative Data Is Going Mainstream
Alternative data is likely to be just a temporary term-it won’t be long before this data becomes the mainstay. Paying attention to details, including facts and metrics that are often ignored, can provide a unique perspective and help you create original strategies to increase sales and raise your brand’s prestige.
Efrat Vulfsons is the Co-Founder of PR Soprano and a data-driven marketing enthusiast, parallel to her soprano opera singing career. Efrat holds a B.F.A from the Jerusalem Music Academy in Opera Performance.