Every two years, retailers have twice the aggregate amount of consumer data available to them. Finding, targeting and retaining the correct market requires gainful insight about them. This was problematic in the past but not anymore. Nowadays, marketers are inundated with information that needs to be interpreted and acted upon. The enormity of vast data resources makes it difficult to determine what intelligence is the most valuable. In addition to this, it is likely that critical information may get lost in the sheer wealth of data on offer.
This may be overwhelming, but it bears good news for the retail industry. Businesses have relied on using information gleaned from Excel spreadsheets to decipher customer data in the past, but those that have implemented analytics and Big Data into their strategy are enjoying revenue increases of double-digit percentages. While the industry has suffered a slower economy because of consumer empowerment, mobile growth and an increasing number of cross-commerce channels, retailers are now seeing the opportunities this provides them with. Marketing campaigns have been revolutionized by Big Data, but it is essential to use it wisely. Maximizing the potential benefits of Big Data analysis can only happen in conjunction with internal knowledge, essential technology and honest business practices. So what Big Data trends are causing the biggest impact on the retail industry?
If your industry is evolving, best you adapt with it or risk losing huge revenues.
An Increase in Data Volumes from Multiple Channels
Consumers have gone mobile. The use of smart phones and tablets has risen exponentially and available customer data has been accelerated by social media. Companies have a vast store of knowledge about their clients such as basic demographics, retail history, supply chain information and even interactions on mobile devices, social networks, call centers and more. The enormous volume of consumer data available is exciting yet daunting, even for those who specialize in customer analysis.
An Increased Need for Technological Investment
Storing data has become extremely affordable. Businesses do not even bother with external hard drives with a storage capacity of less than a terabyte anymore. Retailers of all sizes have the capacity to store gigantic volumes of data and have access to Big Data resources, making it more difficult for retailers to gain deeper customer insights than their competitors. Industry leaders are implementing expensive centralized databases to give them the competitive edge, allowing them to concentrate on analytics and data health for their insight gathering. A ten percent increase in sales can be directly attributed to improved analytics. Optimizing data processes is costing retailers billions on infrastructure and business intelligence.
Analysis of Customer Behavior from Data
Consumers are using different channels to research and buy products. This is causing retail marketers to sift through immense volumes of data in order to decipher information on their customer’s behavior. Everything is being analyzed – from foot traffic, data on transactions, length of wait times at check out points, in-store entertainment and even web usage. The results have drastically changed marketing strategies and onsite tactics over the last few years. The evidence can be seen in the increase of in-store coffee shops, free Wi-Fi access, online shopping platforms and more. Consumers have shifted to the internet and even employees are being given access to mobile technology in order to provide clients with the best possible service. Making use of every available opportunity will stand retailers in good stead. It is not advisable to focus on a single channel as you will neglect many of your consumers. Statistics prove that multi-channel clients spend three times more than those who prefer using one channel.
Personalization is Increasing Sales
Big Data allows retailers the opportunity to evolve their communication and sales strategies to include the personal preferences and life experiences of their customers. The return on marketing investment is as much as five to eight times higher when personalization is used, and sales have been proven to increase by as much as ten percent. A good marketing strategist will be able to use this information in conjunction with good business practices. Consumers will willingly share personal information in exchange for something valuable to them, so be sure to offer it. The idea is to enhance the consumer’s experience. Technology relating to the Next Best Offer will merge analysis of real-time data with mobile product specials, turning your personalization efforts into staggering profits.
With so much information available, there has never been a better time to know your consumers.
Prioritizing Valuable Consumers
Among the biggest advantages of harvesting information from Big Data is the ability to find your most loyal customers. Success relies heavily on prioritizing and rewarding these profitable individuals. This is particularly true when you consider the cost and effort involved in acquiring unique customers, which is much higher than retaining already existing ones. The tools for analyzing data have improved enormously over the years and enabled retailers to identify the needs of individual consumers. This will allow you to offer them relevant, targeted deals.
Studies have shown that more than half of retailers consider the lack of customer insights as their primary reason for economic stress. This may sound strange considering the fact that they have more data available to them than ever before. The issue lies in harvesting the most valuable information from it and analyzing trends intelligently. This is essential for improving communication, building a trusting relationship with your customers and acquiring a distinct advantage over your competitors.
The potential of utilizing Big Data consists of the ability to reach the correct target audience through the channels that they are using. In addition to this, the message you send will be relevant and applicable to a specific market group, eliminating wasteful campaigns and strengthening your reputation. These benefits are well known in the industry, yet many retailers are still dependent on siphoned information because of a lack of involvement at the executive level, minimal internal education, no advancement of technological infrastructure and failure to understand data analysis. It is safe to say that their lost profits are increasing the revenues of their competitors.