Industry 5 Ways the Retail is Benefiting From Big Data
If there is one area that fits perfectly with what big data is all about, it has to be the retail industry. Whether it’s a mega corporation like Walmart or a lone mom-and-pop shop on the corner, the same data stores have been collecting for ages can be used to open doors that weren’t so easily unlocked just a few years ago. We could talk about the potential in this sector for eons. Instead, let’s dive into some of the real benefits retailers are seeing from big data.
1. Streamlined Data Integration and Management
In the old days, retailers collected the bulk of their data in the store. Now it comes from a broad range of sources, including POS systems, website transactions, call center files, rewards programs, and social media campaigns. A big data platform will streamline the collection process and create maximum visibility across this diverse pool of data sources. With all their information in one place, retailers can manage customer profiles much easier and incorporate data accordingly to steer cross-channel initiatives.
2. Insights for Designing Optimal Store Layouts
There are many factors that influence how long a consumer stays inside a given store and browses the selections on the shelves. Layout is one that can benefit from the use of big data. It’s already possible to track the consumer’s every movement using video surveillance and technology that keeps tabs on them through the signals in their phones. When fed into a big data system, this activity can be combined with
product placement and other details that provide insights into their visit. The retailer can benefit by creating a layout that increases interest, the length of in-store visits, and sales at the cash register.
3. Improved Social Media Efforts
A study conducted by Indian IT service provider Tata Consultancy Services (TCS) found that just 10 percent of big companies across 11 different industries are benefiting from social media. What several companies fail to realize, no matter their size, is the importance big data plays in social media success. For example, by analyzing activities such as likes, shares, and even comments, retailers can identify what content is having the biggest impact, who their ambassadors are, and where they should invest their dollars in terms of specific social advertising formats.
4. Fuel for Pricing Strategies
Perceived value and brand recognition are often rolled into retail pricing strategies, which is why Apple can get away charging considerably more for an iPod that has the same feature set than a lesser name brand. Determining the right price is harder than it seems, but there is a solution in big data. By leveraging analytics, retailers can weigh reviews and customer behavior against things like sales and shopping cart abandonment. These are examples of both structured and unstructured data that can help determine whether your prices are too low, too high, or just right.
5. Enhance Marketing Effectiveness and Create Better Shopping Experiences
Being successful in the retail game is much more than having an attractive or even useful product. Marketing also plays a huge role in finding success, which is something well understood by retail veterans like Luxottica. A manufacturer and distributor of upscale fashion products, Luxottica called on IBM’s Customer Intelligence Appliance to optimize its marketing strategy. The advanced analytics solution helped the company identify its most valuable customer segments as well as the best channels for reaching them. In the end, Luxottica was able to target its audience in the right place, at the right time, with products they were most likely to buy.
Most retailers are already sitting on a mountain of valuable information. The big data methodology can and should be treated as a natural extension of that existing pool. Armed with tools that streamline collection, analyzation, and visibility, even small time retail players can optimize their store operations and maximize their profits.
by Big Data Companies