These days, one would be hard-pressed to find an industry that hasn't begun to utilize big data to its advantage. Organizations across the globe are mining informational sources both within and outside of their firm in order to glean insights about as many business areas as they can.
While big data analytics can benefit enterprises in every vertical, the retail sector was one of the first to latch onto the power that information analysis can bring. In fact, the National Retail Federation reported that 82 percent of retailers agreed that big data "provides a significant source of value for their companies." What's more, 58 percent of retailers noted that big data was "extremely important" to their business. Perhaps even more telling is the fact that 70 percent agreed that big data can help businesses stay competitive in the marketplace, and another 82 percent stated that big data has been a catalyst for change when it comes to customer interactions.
However, in order to glean these impactful insights, retailers must have a deep understanding of what benefits big data can bring, and how to go about reaping these advantages. So how, exactly, are today's retailers leveraging their big data initiatives, and what can your business learn from these practices? Let's take a look:
Today's forecast: Capitalizing on the latest trends
By now, we've all heard of retailers that were simply at the right place, at the right time. These companies identified a growing consumer trend and were able to corner the market and capture the bulk of revenues – all before competitors ever caught wind.
While this may have seemed like a phenomenon in the past, big data can help today's retailers better forecast these trends. In this way, the business can look to address increasing demands for a certain service or product just in time to provide for their clients.
However, smart companies take this trend forecasting a step further by integrating other data sources to glean even deeper insights.
"Once there's an understanding of what products people will be buying, then retailers work on understanding where the demand will be," noted Forbes contributor Bernard Marr. "This involves gathering demographic data and economic indicators to build a picture of spending habits across the targeted market."
In this way, retailers have a better idea of what the new trend will be, as well as where this product or service will be most in demand. This is incredibly powerful information, as it can help inform marketing efforts as well as the way the brand stocks merchandise across its store locations.
How much is too much
For years, retailers have struggled with pinpointing the best possible price for their goods and services. These calculations can be tricky, as brands have to ensure that the price will be enticing to customers, but will still provide value for the business. In the past, this was an incredibly difficult balance to strike, and could result in merchandise being priced too high, or the company losing out on potential revenue. Today, however, big data helps answer this question with ease.
Datanami's Alex Woodie noted that big data tools can help companies aggregate details about what competitors are charging to identify the best price point. In addition, data pertaining to customer demand can also inform the price scale. By leaning on big data analytics, retailers can arrive at the best possible price for merchandise, and do so in a much more elegant way than they had previously. "In the past, retailers would employ 'secret shoppers' to gather this intel," Woodie wrote. "That data can be collected electronically using daemons that crawl competitors' website to get detailed info about product pricing."
This website crawling and data collection can take place on a regular basis, ensuring that the brand isn't undercut by its competitors and is consistently offering the most optimal price for its customers.
Identifying and targeting customers
A critical part of retail is ensuring that current customers' needs and preferences are addressed. The value of a loyal client base cannot be understated; however, it's also important to ensure that this group of consumers grows as much as possible.
Big data insights can also be leveraged to identify new customers and decipher the best ways to get in touch with these individuals. Marr pointed out that this strategy is key for both brick-and-mortar retailers, as well as those that operate solely through e-commerce channels. Transactional information, details from loyalty programs combined with geographic and demographic data can help businesses pinpoint pockets of high demand. From here, brands can leverage data pertaining to customer interaction to help create marketing campaigns that really speak to these newly identified potential clients.
"Deciding which customers are likely to want a particular product, and the best way to go about putting it in front of them, is key here," Marr noted. "Data on how individual customers interact and make contact with retailers is used to decide which is the best way to get their attention with a particular product or promotion – be it email, SMS, or a mobile alert from an NFC transmitter when they walk or drive by a store."
Supplying for demand: Inventory optimization
Big data insights aren't only applicable to the front of the store. In fact, the brand's warehouse, merchandise storage facility and its entire supply chain can benefit from analytics as well. As a customer, there's nothing worse than heading to a store or navigating to a brand's website, only to find that the particular item you were looking for is out of stock. This usually causes clients to head for the door – or straight to a competitor.
In order to avoid this, retailers can gather and analyze information about current demand, alongside purchasing history and forward-looking trend data in order to determine the best ways to stock their stores and warehouses. This helps prevent the dreaded "out-of-stock" notices, and ensures that the brand is always on top of its supply chain.
Partnering with an expert: Positioning the brand for success
Big data analytics has much to teach today's retailers, and can not only help them maintain a competitive edge in the marketplace, but can ensure they connect with both current and potential clients. As shoppers continue to demand more from their favorite brands, big data initiatives are becoming more and more critical.
In order to ensure that your company is best positioned for success here, it can be beneficial to partner with a big data analytics expert like Data Realty. Data Realty has been an industry leader for years and understands the needs of your organization and what it will take to help you achieve your goals.
To find out more about the value of a partnership with a big data expert like Data Realty, contact us today.