5 Data Science Projects Every E-commerce Company Should Do

In order to make sense of this huge data and use it for company’s benefits etc, we need help from different Data Science techniques.Every single day people buy and sell things online, with a single mouse click, but in order to keep the customers engaged with the website or to improve customer’s experience, companies use Data science/Machine Learning, i.e..Moreover, it is a calculated figure which is predicted by the customer’s purchase and interaction history with the eCommerce website(or any other businesses)Before we try to understand why is it important for a business to know a customer’s value, let’s see how it can be calculated.Calculate Customer Lifetime ValueThere are a number of articles which describe the steps of calculating customer lifetime value..In order to keep it simple here we will discuss the formula which was used in the optimizesmart article.In the article states the basic formula to calculate customer lifetime value i.e(Average Order Value) x (Number of Repeat Orders) x (Average Customer life span)Average Order Value- Average value of all previous ordersNumber of Repeat Sales- Number of times, the orders were placedAverage Customer life Span- How long a person remains your customerImportance of Customer Lifetime Value in eCommerce siteThe customer lifetime value is a predicted amount which customer will bring into the company..Looking at the numbers, the companies will decide marketing strategy and will try to retain the incoming cash flow from the customer ‘A’ .Moreover, CLV helps eCommerce businesses in many ways -Defining objectives for the company- growth, expenditures, future sales, net profit etc.Optimise business marketing strategies.Adjusting campaign and advertisement.Decide cross sell and up sell according to customer’s purchase.CLV helps to decide customer acquisition cost, the cost of attracting customers.It is one of the essential metric which needs to be taken into account in any eCommerce business..Customer Retention- Churn ModelChurn Model is one of the project, which every eCommerce business should consider implementing in order to add the values to their businesses..As Churn model is related to customer retention, we need to first understand what is customer retention?Customer RetentionWikipedia definition,Customer retention refers to the ability of a company or product to retain its customers over some specified period.Customer retention is an important aspect for business but why?.It is good to have new customers but existing customers bring more revenue than the new ones.There are a number of benefits of having loyal customers -Having a solid numbers for existing customers, it helps businesses to expand their market.Customer appreciate your marketing strategy and are ready to try new things.Real time feedback received from the customers.Existing customers bring more new customers, they are the best source of marketing.Customer retention also help in attracting new customers..Seeing a company give rewards and extra benefits to their existing customers, it attracts more people.As now we know how does customer retention benefits the businesses, we will now try understand how can we achieve customer retention.There are many ways to achieve customer retention but the most commonly used model is- Churn Model.Churn ModelChurn Model helps identifying customers who are most likely to switch to different eCommerce website..The model can be used to calculate the churn rate and depending on the nature of business, different metrics can be used..Few common metrics are -Number of customers lostPercent of customers lostValue of recurring business lostPercent of recurring value lostImportance of Churn Model in eCommerceThe Churn Model benefits businesses in many ways..Few advantages of implementing Churn Model in eCommerce are -Churn rate can help identifying churn customers and accordingly businesses can run retention campaigns.Churn Model can help business to maintain CLV.It helps businesses to track the progress.The inputs received from Churn Model can be very helpful for BI activities.You can get more information on Churn Model here.4..The efficiency won’t be able to save the business if the companies will fail to provide the security.IntroductionAccording to Wikipedia article,Fraud is a billion-dollar business and it is increasing every year.The PwC global economic crime survey of 2016 suggests that more than one in three (36%) of organizations experienced economic crime.Seeing that the Fraud risk is so high, the another project that online businesses should consider implementing is, Online Fraud Detection..In order to use Data Science techniques, the companies will have to come up with a list of any probable frauds.. More details

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