By Gediminas Rickevičius, Director of Strategic Partnerships at Oxylabs.io
Looking to gain a competitive advantage with specialized insights into consumer sentiment, user behaviour, and competitor strategies? Alternative data gives you that edge with valuable information from novel sources that include social media websites, mobile application data, search engines, and much more.
How Alternative Data Shakes Up E-Commerce
Alternative data is literally an “alternative” to traditional data such as economic reports, investment news, press releases, corporate annual reports, consumer reports, and trade journals. The key difference is the publisher. While traditional data tends to get published by established agencies and firms, alternative data typically comes from digital, user-generated sources.
The current nature of alternative data is precisely what makes it so relevant, leading to an explosion of its use in recent years. According to Grandview Research, the market size for alternative data in 2020 was valued at $1.72 billion and is expected to grow at a compound annual growth rate of 58.5% from 2021 to 2028. This growth rate, coupled with an increase in use cases, may even lead to alternative data becoming less of an “alternative” and more of a mainstream source of information as its use overtakes traditional data across the investment and e-commerce spaces.
Retail and e-commerce sectors were among those most affected, both positively and negatively, by the COVID-19 pandemic. Businesses had to undergo massive changes or be swept away by the changing landscape. As a result, we can see that a large portion of companies are now attempting to optimise their performance through newly available data sources on the web.
Tomas Montvilas, Chief Commercial Officer, Oxylabs.io
Where To Get Alternative Data For E-Commerce
Oxylabs’ latest survey of 250+ senior data decision-makers from leading retail and e-commerce businesses across the UK revealed that roughly 52 percent obtained data via integrations with 3rd party databases, 48 percent purchased data sets from data vendors, and 47 percent used data scraping and manual data collection.
Data scraping (also known as data extraction or web scraping) uses scripts to crawl the web, extract data, and parse (or “clean up”) the data to prepare it for use by analysts. While web scraping methods may vary widely across businesses, two typical scenarios include:
In-House Web Scraping
In-house web scraping requires a team of developers, system administrators, data analysts, and data specialists to create and configure the scripts that crawl and extract data from the web. Typically favoured by large companies, in-house operations require a substantial capital outlay to conduct and maintain the process, and offer benefits such as increased flexibility and customisation.
Outsourced Web Scraping
Demand for solutions on a smaller scale has led to the development of ready-to-use, customizable web scraping tools that smaller firms can use to conduct web scraping on a budget. Besides being cost-effective, these applications reduce the management and development burden and can lead to better efficiency by allowing businesses to divert focus from the complex extraction process to deriving insights for use in business strategies.
Manual Data Collection
Manual data collection is exactly as it sounds: the manual collection of data via copying/pasting or downloading from digital sources. Along with the extraction process, manual collection uses standard spreadsheet programs to clean the data prior to analysis. When contrasted to web scraping – which can extract hundreds of pages in seconds – manual collection is time-consuming, inefficient, and subject to human error.
How Alternative Data Enhances E-Commerce Strategies
Use cases for alternative data span marketing to pricing strategies and are growing continuously as the amount of user-generated data on the internet increases.
Some current ways you can use alternative data include:
- Scraping public social media sites to learn about popular products in different categories
- Extracting user-generated content from public social media sites for use in pricing strategies
- Scraping review sites to gauge sentiment for use in product development
- Extracting data on competitors, including popular products and keywords used in product descriptions
- Scraping consumer data from e-commerce sites for use in upsells and cross-sells
- Extracting data from e-store to gain insights into user behaviour for use in site optimization and marketing, including actions taken, products clicked, status updates, comments, and reviews
- Scraping for keywords used in comments and reviews to refine marketing on website, email, and social media
- Monitoring price differences for use in dynamic pricing strategies
E-commerce and retail sector’s exponential growth and rising global importance led us to look deeper into the transformation it went through. These business fields were always heavily driven by data, precise calculations, and predictive analytics. Therefore, we focused partly on data management as the digitalisation of business opened new areas of opportunity. We hope our survey will reveal the same insights to decision makers in every sector and lead to the adoption of data collection and management amongst them.
Julius Černiauskas, Chief Executive Officer, Oxylabs.io
Ready to learn more about scraping data for use in e-commerce?
The e-commerce industry is investing more time and resources than ever before into creating strategies for scraping alternative data. Oxylabs’ survey of over 250 e-commerce company executives is now available as a whitepaper, offering valuable insights into how alternative data is being obtained, how it is being used, and who is using it.
What you’ll learn from Oxylabs’ Alternative Data whitepaper:
- How widespread is the use of alternative data for e-commerce in the UK?
- What businesses are using alternative data? What sizes and which sectors?
- How is my competition collecting alternative data?
- Has COVID-19 impacted data collection practices and budgets?
- What challenges are my competitors facing when collecting data?
- What alternative data and web scraping strategies are my competitors planning to use in the upcoming year?
To get the answers to these questions – and much more – download our whitepaper: The Growing Importance of External Data in the E-Commerce Industry.