This post is part of the “Future of Business” series, which examines how cutting-edge technologies are rapidly reshaping our world, from how businesses run to how we live. “The Future of Business” is sponsored by SAP. See more posts in the series »
Major retail brands are harnessing big data as a means of generating more revenue.
With every consumer purchase, stores from Target to Walgreens collect a bunch of information – products commonly bought together, shipping addresses, sometimes even customers’ social media details.
But the sheer volume of data presents a real problem.
This is where big data technology steps in to save the day. It processes, sorts, scans, and otherwise makes sense of those unmanageable seas of data that would cost humans many, many man-hours to turn into something usable.
Retailers have been collecting such data for years. Historically, they used expensive “data warehouse” systems to analyse it.
But today’s big data technology uses ordinary, low-cost computers and storage systems and special software. Big data today is more affordable and can do a lot more for them.
One of the big uses for it is to watch the results of marketing promotions. Retailers can slice and dice data to learn who used various marketing promotions like coupons or in-store discounts (older people? people with young children?). They can find out what other products they bought, what day/time they were most likely to buy and so on.
Better still, retailers can try out a whole bunch of alternative marketing schemes at once to see which works best, says Anthony Bruce, the CEO of retail big data company Applied Predictive Technologies, the company behind a product called “Test & Learn.”
With that data retailers can figure out things like:
- How to better staff their stores.
- How to optimise floor plans.
- What is causing each store’s weaknesses and strengths.
- How to better stock each store, right down to knowing how the weather will impact shipments.
Perhaps the ultimate use for retailers and big data is to create a more personalised shopping experience, in real time, while the customer is in the store. By analysing each customers’ records the retailer can offer coupons or other offers right at the cash register.
It can also better adjust ongoing marketing campaigns like daily deals, email promotions, deals sent to mobile devices and so on.
“Some big data companies call this level of personalisation ‘clientelling,'” Peter McCoy, founder and president of software company Alluring Logic told Business Insider.
“We take in point-of-sale data, CRM info, and any other in-store data sets that brands gather. Our software builds individualized product suggestions based on all of this data and emails them to each customer,” he says.
At the end of the day, big data is about harnessing the past for the sake of the future. This means different things in different industries, but if you’re a retailer, it represents an opportunity to profit nicely.
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