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  • 2020
  • Working Paper
  • HBS Working Paper Series

The Value of Descriptive Analytics: Evidence from Online Retailers

By: Ron Berman and Ayelet Israeli
  • Format:Print
  • | Language:English
  • | Pages:53 
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Abstract

Does the adoption of descriptive analytics impact online retailer performance, and if so, how? We use the synthetic control method to analyze the staggered adoption of a retail analytics dashboard by more than 1,000 e-commerce websites, and find an increase of 13–20% in average weekly revenues post-adoption. We demonstrate that only retailers that adopt and use the dashboard reap these benefits. The increase in revenue is not explained by price changes or advertising optimization. Instead, it is consistent with the addition of prospecting and personalization technologies to retailer websites. The adoption and usage of descriptive analytics also increases the diversity of products sold, the number of transactions, the numbers of website visitors and unique customers, and the revenue from repeated customers. In contrast, there is no change in basket size. Put together, these findings are consistent with an indirect effect of descriptive analytics, and they suggest that the adoption of analytics serves as a monitoring device that allows retailers to assess the value of new technologies. Without using the descriptive dashboard, retailers are unable to reap the benefits associated with these technologies.

Keywords

Descriptive Analytics; Big Data; Synthetic Control; E-commerce; Online Retail; Web Sites; Data And Data Sets; Performance; Retail Industry

Citation

Berman, Ron, and Ayelet Israeli. "The Value of Descriptive Analytics: Evidence from Online Retailers." Harvard Business School Working Paper, No. 21-067, November 2020.
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About The Author

Ayelet Israeli

Marketing
→More Publications

More from the Authors

    • January 2021
    • Faculty Research

    Amazon Shopper Panel: Paying Customers for Their Data

    By: Eva Ascarza and Ayelet Israeli
    • 2020
    • Faculty Research

    REMOTE—A Framework for Teaching Online

    By: Ayelet Israeli
    • December 2020
    • Faculty Research

    Additional Supplement to Artea Teaching Note

    By: Eva Ascarza and Ayelet Israeli
More from the Authors
  • Amazon Shopper Panel: Paying Customers for Their Data By: Eva Ascarza and Ayelet Israeli
  • REMOTE—A Framework for Teaching Online By: Ayelet Israeli
  • Additional Supplement to Artea Teaching Note By: Eva Ascarza and Ayelet Israeli
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