5 Big Data Trends That Are Revolutionizing Retail
In today's marketplace, data and retail go hand in hand. But although leading retailers routinely leverage data to improve decision making, lower costs, increase revenue and generate better customer experiences, most retailers readily admit that they still have a long way to go.
With growth-focused brands recognizing that data analytics is the key to survival in the crowded retail space, the focus is shifting toward better use of big data through innovative technologies and knowledge of current trends.
Big Data Trends in Retail
Big data has become big business in the retail sector. Right now, there are at least five big data trends that are revolutionizing retail and changing the way brands approach the retail task:
1. Managing mountains of data: The amount of data multichannel retailers have at their disposal is staggering. Transactions, call centers, loyalty programs, mobile apps, social media programs, supply chains and other data sources are dramatically increasing challenges and opportunities for retailers.
With estimates that the amount of data available is doubling every two years, leading retailers are struggling to collect the right data (i.e., the information they really need to guide decision making) and create centralized locations from which data can be interpreted and acted upon.
2. Investing in new technology: The growth of big data is rapidly outpacing retailers’ data-crunching capabilities, leading many brands to increase their investments in centralized databases and data hygiene.
As technology advances, savvy multichannel retailers are aligning their investment strategies with the pace of evolution, investing in innovations that enable them to store more data, centralize data (internal and external) and improve the speed of data analysis.
3. Tackling omnichannel with data: The retail marketplace is rife with omnichannel shopping behaviors. Consumers initiate the purchasing process in one channel and use additional channels at various points along the conversion journey, incentivizing retailers to leverage big data to deliver consistent customer experiences at every stage of the process.
To better understand how customers interact with brands, retail leaders are leveraging cross-channel data to identify how customers research and buy products. In some cases, retailers are using big data analysis to create enhanced brick-and-mortar experiences as a strategy to counter showrooming.
4. Improving personalization: Before the era of big-box and chain retail, consumers often enjoyed personal relationships with store clerks and other frontline retail personnel, enabling brands to shape experiences to individual preferences. Technology advancements again allow retailers to tailor experiences to customers’ individual needs using data insights.
Data-driven personalization (e.g., recommendations and personalized offers) has become a high priority for omnichannel retailers. By harnessing big data and predictive modeling, retailers gain the ability to deliver personalized marketing messages to customers based on their previous shopping behaviors and personal preferences.
5. Prioritizing profitability segmentation: Like always, it's critical for retailers to target their most valuable customers. The difference is that today's technology allows retailers to crunch data in a manner that generates important insights about demographics, psychographics and previous behaviors. Equipped with these data insights, retailers can better understand the needs that drive their customers and design programs that increase an individual customer's value to the brand.
For most omnichannel retailers, the key takeway from the current retail marketplace is that it isn't really about big data — it's about the ability to transform big data into actionable insights that shape customer experiences. By focusing on more sophisticated analysis of the right data, retailers can harness big data to improve engagement, increase revenue and create deeper relationships with customers.
Although a grand big data plan across data, technology and analytics is nice, it's more critical that chief marketing officers make incremental moves now to harness the benefits of big data and drive incremental return on investment immediately.
Don Patrick is the president of Infogroup Targeting Solutions, a provider of data-driven services and solutions for sales and marketing across B-to-B and B-to-C.