Big Data is everywhere today, and it has brought a host of positive changes and advances courtesy of the wealth of information it makes available. No matter where you turn, you can’t escape its effects. Therefore, it should come as little surprise that the world of retail, and by extension the average consumer, is starting to benefit from the game-changing capabilities of Big Data.
So how is this amazing concept making life easier for businesses and customers alike? Read on and be enlightened!
A Quick Definition
For those of you who have come late to the game, here’s a short definition. Big Data is vast amounts of information gathered from a large number of sources, everything from old-school customer research methods (like surveys) to modern day elements (such as Internet metrics), then delivered with great speed to businesses and organizations.
If you want to learn more about Big Data, check out the article “Big Data And The New World It Brings On”.
The New Retail Revolution
It’s no big secret that online stores have challenged the dominance of brick and mortar retail establishments. In order for the latter to survive and indeed thrive, they need to change with the times and fittingly enough, adopt a “if you can’t beat ’em, join ’em” approach by using the Internet and social media to increase visibility, brand recognition, and sales. Big Data has a prominent role to play in this modernizing strategy.
The problem that many retailers have is that they generate lots of their own data, but really have no way to bring it all together and use it. Big Data, used in conjunction with advanced analytical tools, helps businesses to make sense of all that information and put it in a form that retailers can actually use.
For instance, Big Data enables retailers to use location-based marketing. If sales data shows that consumers in a particular part of the country account for the majority of purchases of a certain product, retailers can target those customers with advertising and promotions, and stand a better chance of getting a high return on investment. By the same token, retailers can exclude products or locations that historically under-perform, decreasing the risk of losing money.
When used in conjunction with the concept of the Internet of Things, Big Data can be used to ascertain customer traffic patterns such as when they visit a store and where in the store do they go. Retailers can even gather feedback on product displays. With this sort of information on hand, a store can make sure it has sufficient staff to handle the high-volume traffic peak times, as well as having an idea how to best set up displays for maximum results.
Finally, retailers are often faced with the problem of not knowing what levels of inventory they need to maintain. Stores don’t want to miss out on profits by running out of a hot-selling product, but at the same time they want to avoid wasteful spending by stocking up on items that end up moldering in the back room due to lack of interest. Big Data addresses all of the needs and demands of a store’s supply chain, providing statistics on what products sell best at what stores as well as what the inventory levels look like, thereby helping stores decide what merchandise to order, and when to do it.
There are more ways for Big Data to benefit retail stores, but space is limited. For some additional insights, check out the article “From Store to Big Data Storage: Interview with George Shaw of RetailNext on Retail Big Data”.
Good Stuff For Customers
Consumers will be happy to know that Big Data also improves their shopping experience. Based solely on the first section, it should be obvious that customers stand to gain when retailers manage to cut waste. A smart business will pass a portion of those savings on to the customers, resulting in lower prices as well as fostering greater loyalty and favorable word of mouth.
But beyond that obvious benefit, consider another issue that customers have with many businesses: the feeling that they are being treated like some impersonal, faceless number rather than like an actual human being. While people certainly aren’t expecting, say, a convenience store clerk to greet them like family when swinging by just to pick up a gallon of milk, loyal customers of a retail store have a reasonable expectation that their continued patronage means that there a rapport now exists, even if it’s just a passive thing. With Big Data information, a retailer can gather enough information on their regular customers to build up a good profile on them, such as their likes and habits, and then tailor special deals just for them.
In fact, Big Data gives retailers enough information about a store’s customers that the business can also recommend other products and services that dovetail nicely with the customer’s demographic information, areas of interest, and preferences.
There’s also convenience to take into account. A retail store with well-stocked shelves means no disappointment over a lack of favorite products. Nothing is as irritating to a customer as fighting through traffic to get to a favorite store, finding a parking space, navigating through crowds of shoppers, only to find out that the place has run out of the items in question.
We’ve touched upon the idea that a more efficiently-run business means lower prices, but that’s not the only means of consumer savings. Customers can benefit from special sales, deals, promotions, and coupons, many of them conveniently sent directly to their mobile device.
This improved means of communication and feedback also means that complaints get addressed sooner and with better fixes. After all, Big Data does include customer survey data and written feedback!
It’s A Win-Win
If knowledge is indeed power, then Big Data is a particularly muscle-bound 600-pound gorilla on steroids. The information that Big Data provides helps retail businesses run more smoothly and efficiently, sell products smarter, and overall make them more competitive with the online stores.
On the other end, Big Data helps customers have a nicer shopping experience by keeping them informed of new products and services while making sure that their favorites are always available, and at the best price.
The benefits of Big Data are only starting to get realized by retail stores. Expect bigger and better things in the months and years to come.