How Big Data Is Changing The Retail Industry
Published on 15 April 15
John
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Big Data's influence is felt in all aspects of 21st century life in everything from government to education to business. Although the concept of Big Data has been around for decades, the rise of wireless networks and cloud computing have taken the concept to the next level, and with it the means of creating a greater impact.
The retail industry stands to gain from the raft of changes that Big Data brings. As a result, the potential is there for improved customer engagement which could lead to increased sales. Here are some ways that Big Data is bringing change to the retail industry.
The retail industry stands to gain from the raft of changes that Big Data brings. As a result, the potential is there for improved customer engagement which could lead to increased sales. Here are some ways that Big Data is bringing change to the retail industry.
What's Big Data?
First, let's have a quick definition. The "Big" in Big Data describes three things: the amount of information; the scope of sources, both old-school and state-of-the-art; and the speed in which it's delivered. It's usually referred to as the three V's: Volume, Variety, and Velocity.
Information-Based Promotions
When online stores began to truly come into their own, the pundits declared the end of brick and mortar retail. While there's no imminent extinction on the horizon, it's safe to say that retail stores have taken a few hits thanks to online shopping.
Fortunately, Big Data provides the very means for traditional retail stores to meet the challenge of online shopping and stay competitive. Retail stores generate large amounts of data which can encompass everything from sales figures to inventory levels. When used along with advanced analytical tools, Big Data makes it possible for marketing people to collect this information in one place, put it into a useful form, and create informed campaigns and strategies based on the results.
Here's one example: Big Data makes it easy for retailers to use location-based marketing. If the data shows that customers in one region of the country made the most purchases of a given product, retailers can target customers living in that region with the appropriate advertising and promotions, thereby increasing the likelihood of more sales. Conversely, stores armed with this data can also avoid products or locations that trend downward, thereby saving money by cutting waste.
Fortunately, Big Data provides the very means for traditional retail stores to meet the challenge of online shopping and stay competitive. Retail stores generate large amounts of data which can encompass everything from sales figures to inventory levels. When used along with advanced analytical tools, Big Data makes it possible for marketing people to collect this information in one place, put it into a useful form, and create informed campaigns and strategies based on the results.
Here's one example: Big Data makes it easy for retailers to use location-based marketing. If the data shows that customers in one region of the country made the most purchases of a given product, retailers can target customers living in that region with the appropriate advertising and promotions, thereby increasing the likelihood of more sales. Conversely, stores armed with this data can also avoid products or locations that trend downward, thereby saving money by cutting waste.
Using The Internet Of Things
The Internet of Things (or IoT) is a concept where every object or asset has its own sensors, IP address and Internet access. Each "thing" can relay information about usage, inventory levels, and customer interaction. Thanks to the IoT, a store can keep tabs on when customers visit the premises, which departments they visit, and what things they buy. This information in turn helps the store figure out when to have extra staff on hand, what things to push, and even where the best place in the store is to display certain products.
The information provided by the Internet of Things is classic Big Data fodder. As the IoT becomes more widespread, Big Data will be there to handle the exponential increases in data.
The information provided by the Internet of Things is classic Big Data fodder. As the IoT becomes more widespread, Big Data will be there to handle the exponential increases in data.
Maintaining Inventory Levels
There's nothing that puts a damper on sales like running out of inventory. Not only does the store lose out on a sale, but more often than not the disappointed customer will go elsewhere to find the item in question. On the other hand, stores don't want to overstock and end up taking a loss. Big Data benefits any store's supply chain by providing information on what products sell the most, when they are most likely to be purchased, and which store branches appear to move the most of them. Thanks to Big Data, a retail store can know what it has on hand, how much more will most likely be needed in the near future, and when it should be ordered.
Big Data offers more benefits to retail, and you can increase awareness by reading "From Store to Big Data Storage: Interview with George Shaw of RetailNext on Retail Big Data". Due to the sheer volume of information, Big Data can seem intimidating; but it does provide the retail industry with all of the information needed to increase efficiency, eliminate waste, and build better relationships with customers.
Big Data offers more benefits to retail, and you can increase awareness by reading "From Store to Big Data Storage: Interview with George Shaw of RetailNext on Retail Big Data". Due to the sheer volume of information, Big Data can seem intimidating; but it does provide the retail industry with all of the information needed to increase efficiency, eliminate waste, and build better relationships with customers.
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