Let’s assume that eCommerce organisations like Amazon and Flipkart would like to understand if shopping habit for a specific category has any relationship with the Gender and Income Group of the customers. As there are two factors (i.e. two independent categorical columns) which are being considered in this example, we are talking about Two-way ANOVA. So, there would be 3 hypothesis – one each for each of the independent categorical column and third to cater for the interaction effect of two independent variables.
Another example, suppose an eCommerce organisation would like to understand if page crash has anything to do with the education level of the customers. ANOVA would be the right choice to find if there is any statistical significance on the probability of page crash when measured against a single factor therefore education level.
For any business, specifically for an eCommerce organisation, conversion/purchase is the final goal. Hence to find out what impact each activity has on the sales, Regression equation with all activities like emails campaign, TV ads, Social Media broadcast, personalized communication to frequent customers, cold call , as independent variables to understand the impact on the sales with unit increase in the cost of each variable , keeping other independent variables constant.
Two Way ANOVA:
- In any business, Customer Satisfaction and Customer Loyalty play a vital role, for which usability of the e-commerce site, confidential protection of user information and better response time are some of the contributing factors to determine the areas of improvement in the business. Two Way ANOVA can be used to come up with the statistical significance level of these factors towards the major goal.
- To determine the significance level of shopping habit of a customer based on demographic factors such as Gender or Annual Income, by computing the association between and the interaction between these 2 independent factors.
- To come up with the significance levels of the channels used for marketing of a multi-channel marketing campaign.