Late last year, a study conducted by the Edgell Knowledge Network found that 46 percent of retailers listed the sheer volume of their data as their biggest information-related challenge. Ultimately, it’s not about obtaining the right information. Today, we can get just about any piece of information we need in the blink of an eye, and often do while using our smartphones or tablets on the go. The hard part about information management, particularly in business settings such as retail, is combing through line after line of data to find the exact insights we need. That’s why the volume of information was the number one answer in the study.
Big data isn’t about the quantity of information – it’s about constructing strategies designed to ease the process of separating pertinent from non-pertinent data. To do this, organizations must have an idea as to how they want to use their information. What insights is it going to provide? How is it going to improve business processes? What are the ultimate goals driving the big data initiative? In the retail space, there are a number of key advantages to be gained thanks to big data. Here are a few:
Personalize the customer experience: According to an Infosys study, 86 percent of customers are more influenced to buy when content is customized to target their personal needs. Big data can help identify shopping patterns, preferences and other crucial data that can give insights into how customers think, what they care about and what drives them to buy. Smart retailers will use this information to construct customized communications, such as emails with coupons for products those customers might be interested in.
Identify opportunities for expansion: You should aspire to see your organization grow, but your growth strategy has to be carefully planned with data to back up your decision making. For example, if your store relies on foot traffic but you open a location in a non-pedestrian friendly area, it’s not likely that you’ll succeed. However, if your data shows that an increasing number of people have shown interest in a particular neighborhood, it might be a great time to open a location in that area.
Keep up with trends: Identifying and understanding trends is crucial in the retail industry, particularly in areas like fashion apparel. You already know that most apparel chains have to stay one season ahead. Summer clothing hits the racks before the snow melts outside. As the warm summer weather begins, most stores are already preparing their back-to-school and fall fashion sales. But what if a particular trend falters? Fashion can change instantly, so if the industry makes a dramatic change, you must be prepared to keep up. As a retailer, evaluating predictive data can help you stay ahead of trends, so if you have to make dramatic changes to your inventory, you’ll be ready.
Manage inventory: Along the same lines of keeping up with industry trends, you must keep up with your own. Is a particular item not selling as well as you would have liked? Did you discover that a particular item was doing better than you anticipated? As such, you may have to make quick adjustments to your inventory to keep up. Business intelligence analytics can give you the insight you need to make any necessary changes in a timely and cost effective manner.