Sunday, March 15, 2015

Big Data in Retail : A game changer?

Read more: BigData in Telecom, BigData in Financials/Banks

According to a Gartner study, Big Data is the most sought after for the Retail industry. This should not come as a surprise as this is the most disruptive industry with game changing influences through online retail/eRetail/eCommerce over the last decade. With individuals spending more time online this trend will only increase. Retail businesses are now looking to leverage insights from the large amounts of digital/online user profile data, bringing a complete shift in the customer shopping experience.  Let us discuss what are some of these industry wide changes and challenges and how leaders in the retail space are continuously innovating with a new found strategy - Big Data!

What is changing in the Retail space?

  • Online & Mobile shopping a growing trend:
 Individuals across age groups are increasingly online and mobile. For a large part of the users, having to physically visit a retail stores means spending precious time & money (for travel). The initial inhibitions of online shopping is fast fading away even emerging economies (such as India). Users now have the convenience to search and compare the prices on the web and place orders on the best possible deals.  The below chart shows the US retail eCommerse sales trends.

  • Hybrid shopping a reality:
Although online shopping trends are moving north wards, there are still a large population that prefers to research online on specific shopping items and yet would prefer to buy from a physical retail outlet. This is especially true for clothes, shoes, jewelry where pure online retailers still have a long way to make up for the touch-and-feel experience possibly only though brick-and-mortar outlets. Interestingly this has lead to a reverse trend of prominent successful online retailers moving from 'clicks to bricks' with physical shopping outlets in addition to their long known online offerings.
Infact, a lot of retailers now get to leverage a combination of data to give a whole new customer shopping experience across online and the physical retail realms.

How Big Data is opening up new possibilities? 

Better inventory & pricing through predictive analytics:
Retailers are now able to more accurately gauge/forecast demand for specific items based on social trends through 'social sentiment analysis' and there by more efficiently manage inventory and pricing.

For instance retailers could publish advertisement on a new product, and measure interest on the web and develop social media collateral. The data is aggregated by demographics, locations and subcultures and helps the retailers deliver pinpoint advertising and forecast product demand with a high confidence level.

User profiling based targetted marketing:
The traditional retailers have years of accumulated data of customers and buying patterns, in addition to this they now have new data from the web which provide insights powerful enough to predict the most likely customers who might be interested in a particular product/offering.

For instance retailers are known correlate data its baby-shower registry with its Guest ID program in order to determine when a shopper is likely pregnant. This is possible by tracking purchase history, credit card use, survey responses, customer support incidents, email click-throughs, web site visits and more. By applying these purchase behaviors to all shoppers retailers are able to identify women who were pregnant even though these women had not notified. With this information retailers are able to distribute baby product promotions to a very specific customer segment, timed to stages of pregnancy significantly boosting sales of relevant products and also delighting the customers in being offered the most relevant products at the exact time.

Weather, location based marketing & sales:
It is easy to keep track of customers by location and demography and push offers and coupons that is of very likely interest.
For instance certain hotels are now able to target passengers stranded at airports due to flight cancellation/delays and send offers coupons encouraging them to check-in creating new business/sales possibilities.
 Undoubtedly the possibilities are unlimited. Big data and analytics deserves to be a a key part of every retailer strategy. It is certainly poised to be the one key differentiators between the leaders and the laggards in the retail business.

Read more: BigData in Telecom, BigData in Financials/Banks

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