In a competitive business landscape like retail, access and usage of big data is a source of competitive advantage. In the past, entrepreneurs relied on intuition to make marketing decisions. Now, data rules how commerce is being done.
According to David Pittman, one use of big data is to predict trends and prepare for future demand. Big Data can also be used to optimize pricing models.
In a competitive business landscape like retail, access and usage of big data is a source of competitive advantage. In the past, entrepreneurs relied on intuition to make marketing decisions. Now, data rules how commerce is being done.
According to David Pittman, one use of big data is to predict trends and prepare for future demand. Big Data can also be used to optimize pricing models.
(Image Credit: Flickr, Creative Commons: jpmatth)
Retail companies need to be always up to date with the needs and wants of their customers whichever channels they may be, so that they can innovate and be ahead of their competitors. Big Data addresses the need for this specific type of information and if acted upon can lead to tremendous sales and profit for retailers.
Retail companies can use tools such as CollaborateCloud to do collaboration, store management and collect business information within their stores or franchises.
Based on a survey research conducted by Teradata, Big Data can be used by retailers to improve customer experience. Amazon, an internet shopping giant, uses the massive Big Data it collects and generates on a daily basis to personalize the shopping experience. For example, recommendations for you are based on your browsing habits. It can even recommend books or items to give to your friends or relatives based on their browsing and spending history.
This allows them to boost their sales dramatically as it is scaled upon a massive customer base and years of collection of Big Data.
One retail company that is boosting sales by using Big Data is Klarna, a Swedish startup. It implements a buy now, pay later honor system to encourage more online purchases.
Target, a brick and mortar retailer, uses Big Data to create customer profiles which contains information such as person’s buying history, age, marital status, web history and estimated salary. By doing this, Target is able to do personalized advertising as well as understand their clientele better to meet their distinct needs and wants in their shopping experience.
Ozun.ru, known as the Amazon of Russia analyzed 16 years of shopping data to take advantage of an apparent increase in demand in books as winter approached in Russia. When winter is near, Ozun, would feature book recommendations personalized to their users.
Stage Stores, another retail company used Big Data for size optimization. It was able to use analytics to shop the right sizes to each store using the inventory and sales figures of each store. This has boosted their inventory turnover, improved both gross margins and average unit retail price and as a result has boosted sales dramatically.
The power of Big Data will continue to influence the decisions of retailers and companies in general. Some companies still rely on intuition or gut feeling or simple observations to make production and other retail decisions but eventually they will understand that analytics will win almost all of the time. As they say, the numbers don’t lie.