The Value of Descriptive Analytics: Evidence from Online Retailers

56 Pages Posted: 10 Dec 2020 Last revised: 8 Dec 2021

See all articles by Ron Berman

Ron Berman

University of Pennsylvania - The Wharton School

Ayelet Israeli

Harvard Business School - Marketing Unit

Date Written: December 1, 2021

Abstract

Does the adoption of descriptive analytics impact online retailer performance, and if so, how? We use the synthetic difference-in-differences method to analyze the staggered adoption of a retail analytics dashboard by more than 1,500 e-commerce websites, and we find an increase of 4%–10% 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 CRM, personalization, and prospecting 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 repeat customers. In contrast, there is no change in basket size. These findings are consistent with a complementary effect of descriptive analytics that serve as a monitoring device that helps retailers control additional martech tools and amplify their value. Without using the descriptive dashboard, retailers are unable to reap the benefits associated with these technologies.

Keywords: descriptive analytics, big data, difference-in-differences, synthetic control, e-commerce, online retail, martech.

JEL Classification: C55, L25, M31

Suggested Citation

Berman, Ron and Israeli, Ayelet, The Value of Descriptive Analytics: Evidence from Online Retailers (December 1, 2021). Harvard Business School Marketing Unit Working Paper No. 21-067, The Wharton School Research Paper, Available at SSRN: https://ssrn.com/abstract=3745748 or http://dx.doi.org/10.2139/ssrn.3745748

Ron Berman

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Ayelet Israeli (Contact Author)

Harvard Business School - Marketing Unit ( email )

Soldiers Field
Boston, MA 02163
United States

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