Business Opportunities in Click Stream Data Mining – from Cart Abandonment Prevention to Upselling

When we started Akanoo 2½ years ago, none of us would have believed that the click-stream of online shop visitors reveals so many applications of statistical analysis. Our goal was simple: use JavaScript to display a voucher to people on the first pages if you are certain they otherwise won’t buy. A logistic regression on the target variable “will buy” and a web service written in Groovy for real-time prediction did the job.

This led to roughly 10-20% of incremental revenue compared to control groups. But only on a small group of people: those that we knew for sure won’t buy.

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Starting with cart abandonment prevention, we have identified different strategies to make additional revenue with statistical models. What will be the next strategy? We’re working on it.

So, we took a deeper look at the behavior of the millions of online shop visitors that we had tracked so far. And we quickly realized: there is a business opportunity way bigger than that. We saw visitors responding negatively to vouchers and some of them becoming less profitable in the long run compared to the control group. So we had to rethink our initial solution.

Let’s draw an analogy here: most online retailers offer the same assistance as a supermarket – none. However, there are millions of visitors out there that rather like the shopping experience of a fashion outlet or shoe retailer (they know from the offline world). There is staff around that guides you through the offering. How can we deliver both at the same time?

The solution is: create algorithms that have a lot more freedom. We started working on algorithms that are able to predict the intention and next steps of visitors and pick the right way of interacting with these visitors from an array of different incentives and pieces of information. With the ultimate goal: converting visitors into happy customers.

Now we’ve expanded the audience of our JavaScript targeting to a wide array of scenarios besides cart abandonment prevention: up-selling, inspiration, return reduction, loyalty. (And we started using Spark, Hadoop, Docker, Redis and Akka to handle the data…)

What’s next? The data we analyze and track on a daily basis is growing steadily. Just for the up-selling models, we look at the data of 11M users every night. Other kinds of transaction-based websites come into play and modeling of more complex decision making processes.

Who makes this possible? The data science team behind Akanoo.
Yours, Fabian