Published On: Wed, Apr 30th, 2014

Why Multivariate Analysis Is Helping To Boost Revenue For Online Shops

E-commerce is big business these days. An industry worth several billion dollars globally, it is also one of the most relied-upon industries by consumers and businesses alike. Regardless of what you are selling, it is fairly straightforward to setup and manage your own e-commerce website thanks to the plethora of web development professionals and “online website builders”.

Boost Revenue For Online Shops

With such websites, one can simply upload details of their products along with any photographs in a matter of minutes, in fact, the process mimics that of listing an auction on eBay in many respects!

This is all well and good, but there is one potential stumbling block that a lot of those uninitiated with the art of selling have come across, and that is selling products that are “best sellers”!

Whilst you might be thinking that you know your target market like the back of your hand, the truth is consumer choice and taste is a constantly-evolving market, and unless you are prepared to move with the times, you are likely to end up with a lot of stock you cannot sell. But luckily for you, this is where multivariate analysis comes in handy!

What is multivariate analysis?

Put simply, multivariate analysis refers to the process of scrutinising data using a number of different changeable values or “variables” as they are called. Let me give you an example of what multivariate analysis is.

Let’s say that your e-commerce store showcases and sells jewellery that you lovingly make by hand. On your website, people will be able to browse and buy all sorts of jewellery that you make ranging from earrings, brooches, rings and pendants.

Being part-jeweller and part-entrepreneur, you know that in order to bring home the bacon you need to make jewellery that either appeals to the masses, or to a niche market that is willing to pay big bucks for your handmade goods.

You’ve set your website up around 12 months ago and you have a steady stream of customers buying your jewellery. The only trouble is, whilst you might know who buys your jewellery, you don’t really do anything with that information.

But thanks to multivariate analysis applications from organisations such as Camo Software, it is possible to scrutinise that data so that you can boost your revenue.

Why multivariate analysis can boost revenue

Using the online jewellery store example above, it is possible to learn all sorts of interesting trends and spending habits from your customers such as:

  • Gender;
  • Location;
  • Products purchased;
  • Whether they are repeat customers or not.

But really you don’t want lists of male or female customers, locations or what they buy! What you really want to know is what types of customers they are. For example, are they:

  • 31 to 40-year old women that buy brooches;
  • 18 to 25-year old men that buy necklaces;
  • 50-somethings looking for special wedding anniversary presents.

As you can see, you can then use that information to determine whether to conjure up special offers for certain demographics. Knowing these sorts of information can boost your website’s revenue significantly.