Top 3 Applications of E-Commerce Sentiment Analysis in 2024

The e-commerce market continues to grow and is estimated to surpass $5 trillion by 2026. However, as the needs of consumers and businesses are constantly evolving, companies face difficulty in maintaining high customer satisfaction levels to stand out in the market. The e-commerce industry is no exception.

E-commerce businesses increasingly use sentiment analysis to overcome this issue and better understand their customers.

Figure 1. The most common e-commerce models

In this article, we aim to:

• Highlight the reasons for revenue loss in e-commerce businesses
• Explain how to benefit from sentiment analysis to recover from these losses
• Some best practices of sentiment analysis applications in the e-commerce industry to help business leaders better align their offerings with their customers’ needs.

Reasons for revenue loss in e-commerce businesses

Customer churn

The customer churn rate in online shopping is estimated to be more than 70%, indicating that companies should spend more time developing strategies to maintain engagement and increase brand loyalty. 

Poor service quality

Researchers argue that one of the reasons for revenue loss is the gap between perceived service quality and expectations. So, how your customers perceive the quality of the service is crucial for the business. 

Security breaches or fraud 

In 2021, almost 6 billion accounts were affected by data breaches, and the number accelerates exponentially. According to a recent report, the retail industry is the most vulnerable to e-commerce attacks. 

Unregulated product prices

Customers state that the main reasons for shopping online are the low prices and free shipping possibilities, as shown in the figure below. However, when the competitors offer lower prices or faster and free shipping opportunities, customers change their purchasing habits.

Figure 2. Factors influencing the decision to buy online in the US

Website crashes

In recent years, Meta (also known as Facebook) had an unexpected crash that lasted 6 hours and cost the company almost $80 million, and more importantly, gaining users’ trust back took a long time. 

How sentiment analysis can help?

NLP techniques such as sentiment analysis can be implemented in the e-commerce industry to better understand customers’ online purchasing decisions. In general, sentiment analysis helps to:

• Understand the drive to buy or not
• Detect emotions of the customers regarding products, services, or the brand
• Recognize public opinion on targeted products or services
• Examine any patterns and intentions 
• Make predictions about the customer behavior 

If you want to learn more about the benefits of sentiment analysis, check out our article.

Top 3 applications of sentiment analysis in the e-commerce industry

1. Product Reviews

Figure 3. An example of sentiment analysis applied to product reviews

Customers can now share their opinions, what they like and didn’t like, or their suggestions in online product reviews. That’s why analyzing the sentiment in customer reviews is of great importance for companies. It can provide crucial information regarding which products are most and least liked and what customers’ compliments and complaints are.

2. Social Listening

Social media is also great for understanding public sentiment regarding your products or services. You can use various channels like Twitter, Instagram, or the Web to get insights into how you are mentioned and what the public feels or thinks about your brand.

3. Competitor Analysis

As there is great competition in the e-commerce industry, analyzing your competitors can help you to figure out how to stand out in the market. Using social media, you can learn about their strengths and weaknesses by analyzing the public sentiment toward their brands.

Further Reading

• Top 5 Sentiment Analysis Challenges and Solutions
• How to Benefit From Sentiment Analysis in the Retail Industry?

You can also check our data-driven list of sentiment analysis.

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