Originally published in FINMAPS
When talking about where retail will go in the future there tends to be speculation about drones flying above our heads and simply delivering packages at our front doors only minutes after we place an order through an app. In such a perspective the old-school retail stores are considered completely outdated and belonging maybe in a museum. However, where the retail environment of today is going is a far fetch from that future in the distant horizon. Those retailers taking on innovative initiatives today are actually busy gathering information technology, and taking advantage of big data and analytics technology in methods never seen before. And their objective is to enhance customers’ shopping experience, along with collecting and evaluating valuable data that will assist retailers better establish their position to face the needs demanded by their customers.
A good question is what type of insights are being collected through big data? For instance, forecasting what products may start trending as popular hits in the coming weeks, and ensuring your stock will be able to respond to the probable rise in demand. Analysis varies in different fields, including which retail chain branches are attracting more customers, the products they should store in their stocks, and who their customers actually are, what stores they go to, what they ordinarily purchase and what other products–or even services–can be offered to enhance their shopping experience. The wise use of Big Data as a Service (BDaaS) is helping in the collection of these detailed and important data.
Data is collected from multiple sources in the retail environment, including customer transactions, programs of loyalty, customer behavior, layouts of stores, and we shouldn’t forget the sentiment of social media, data on a macroeconomic scale and furthermore. All of this must be factored into the analysis of retail data. Speaking more generally, retail analysis can be differentiated into five different streams: customer analysis, performance analysis, sales analysis, spend analysis, store analysis. Each stream set its target on a different focus, yet when used together as a combined force they render a full retail analysis to provide a further comprehension of customer behavior to upgrade loyalty, enhance conversion rates and the typical basket value thanks to marketing campaigns enjoying efficiency and a targeted nature, and reducing the overall costs down the road. A win-win finale must be the delivery of a great retail analysis, all for the customer and store owners alike.
Big Data Analytics firms are gaining an ocean of experience considered invaluable in the retail environment. Various companies are working in close relations and focusing on the exact performance of their large chain of small and large retail stores. Tech giants usually face a challenge of monitoring and measuring the performance in each and every store, and then all combined. This is of course in addition to analyzing the agreements’ performance parallel with respective landlords.
Enthusiastic companies face major challenges in the initial setup. They find most of the data scattered and very difficult to analyze, no central coordinating system across various stores. There was also no system to analyze or visualize the information. Thus, predicting trends and the revenues from any of those stores came out to be nearly an impossible task. Various big data companies enjoy the necessary experience and sophisticated data monitoring solutions, and they are thus able to bring to life a centralized document repository, make collaboration much easier, develop advanced user interface systems equipped with dashboards, along with installing an easy system programmed to track budgets, issues, challenges and risks through a very simple and ideal system of email notification.
While the nature of these solutions may seem a bit technical, they actually translate into opportunities to provide better solutions for owners of branches and head offices, in addition to providing enhanced customer experience, encouraging them to return more often in the future. This is vital to achieve. Retailers must be able to identify all their customers one by one, their natures, behaviors, preferences, what makes them going, how they trend; and take the time to implement these insights across a preferred list of commerce and interaction channels. This is exactly why there is a huge emphasis on being able to gather, review and take advantage of the customer data.
Today’s market does pose a challenge in this regard, but it is not about gathering more data. In fact, how to adequately handle the data you already possess is the actual dilemma. If retailers seek success in the market of today and tomorrow, they are in need of the know how to relate relevant data to their business needs, and thus influence consumer behavior.
There are numerous benefits of working with a firm dedicated to data analysis. Retailers will be able to outsource the tricky art of analysis and pinpoint their attention to what they actually do best. Only then will they be able put their insight to the test regarding real data against business. That is when informed decisions can be made based on putting all the information gathered to work.