While leveraging big data by using software, apps and point-of-sale (POS) technology can help retailers handle everything from holiday hiring to inventory management in the days leading up to and following Black Friday and Cyber Monday, one of the most useful applications for big data technology this holiday season is in countering showrooming, a phenomenon that's been on every brick-and-mortar retailer's mind as they make preparations for their busiest season of the year.
As the popularity of omnichannel shopping has increased in recent years, retailers are able to capture data about billions of customer interactions and transactions from multiple touchpoints. Using this information and external data available from third parties like Datalogix, Compete, Nielsen, Acxiom, etc., retailers can zero in on what their customers want and quickly respond to their needs to increase sales and customer satisfaction. Real-time pricing, personalization and using loyalty data are all effective strategies that harness the power of big data to encourage consumers to complete their purchase in-store rather than buying from a competitor via a smartphone or going home to buy online.
Comparing prices is one of the top ways that cost-sensitive consumers are using their smartphones in-store. Computer algorithms are now available that can monitor competitors’ pricing and react by making adjustments to campaigns, promotions and pricing in near real time. Flexible pricing strategies can mean the difference between making a sale and losing one.
While competitive pricing is an effective means of combatting showrooming, not every brick-and-mortar store owner can afford to match e-commerce price models. According to research published in the Harvard Business Review blog, personalization can deliver five times to eight times the return on investment and create a sales lift of 10 percent or higher, and it's a great alternative to price matching. Retailers can create a personalized experience by using geo-location data and mobile technology to push special offers to shoppers near a particular store or by offering an exclusive discount (e.g., a military discount). Tailored messaging that offers discounts based on purchase history, shopping preferences and other existing customer data can also be very effective.