Can Big Data Live Up To Its Promise For Retailers?
Can Big Data Live Up To Its Promise For Retailers? [/caption]Was Sam Walton, founder of Walmart talking about Big Data and Analytic in the 90’s when he said, “People think we got big by putting big stores in small towns. Really, we got big by replacing inventory with information.” Walmart clearly understood the value of the large volumes of data they had access to and turned it into competitive advantage.
As retailers move from looking in the rear view mirror (what happened) to the road ahead (what will happen) they have turned to Big Data and Analytics for answers. While, Big Data holds great promise for retailers, many are skeptical. Retailers are already drinking from the data fire hose, whether its transaction data, recording every product sold to every customer across all channels or research data, covering detailed consumer profiles or web log and social data. The questions retailers are asking; will the investment drive more revenues, increase customer loyalty and create a more rewarding customer experience? Will I gain a deeper insight into customer transactions and interactions across the organization? Can we use existing resources and infrastructure?
The answer is Yes, Big Data presents the opportunity to better analyse everything from customer shopping behaviors at each stage of purchase journey, to inventory planning to delivering relevant and personalized offers. By analyzing how shoppers found your products, how long they spend browsing product pages and which products they added to their basket provides greater insight into what decision process they went through before purchase and helps retailers quickly identify cross sell and up-sell opportunities in real-time. In addition, combining transaction data and what your customers are saying on social channels (ratings, likes, dislikes, what’s trending etc.) can feed into the decisions you make on placing the right product, in the right store at the right price and ultimately deliver very personalize and contextual offers to the customers.
Data Driven Decisions Getting value from Big Data
Turning Big Data into actionable insight is not just about dumping data in to a “Data Lake” and pointing an analytics tool at it and saying job done! Retailers need to take a number of steps to profit from Big Data and Analytics.
- Firstly, you need to gather data from all available sources in batch or real-time, from internal and external, and from an ever increasing number of devices (beacons, mobile devices). Once you have gathered the data, it needs to be connected, validated, cleansed and a governance process put in place before integrating with analytic tools and systems.
- Secondly, put clean and trusted data in the hands of data scientists who can distill the relevant from irrelevant and formulate commercial insights that the business can action and profit from it.
- Lastly, plan and organize for success. IT and business need to align behind the same agenda, regularly reviewing business priorities and adjusting as needed. Maximize existing scare IT resources by leveraging existing technologies, Cloud platforms and forming alliances with 3rd party vendors to fill skills gap. Secure quick wins for your Big Data initiatives; maybe start with integrating historical transaction data with real-time purchase data to make personalized offers at point of sale. Look outside your organization and to other industries like retail banking or telecommunications and learn from their successes and failures.
With the right approach, Big Data will deliver the return on investment for retailers.