How big data is influencing the retail industry

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The job of collecting data and crunching the numbers is primarily a digital task. But it’s the best way to identify customers and their shopping habits.
Date
4th March, 2019

Utilising big data in retail is the best way to organise a store, increase stock, and appeal directly to a  current customer base while still targeting new customers.

It is also a strategic opportunity to deliver a solid multi-channel experience to customers who require their online and in-store journey to be as continuous as possible.

Thanks to smart technology, there are numerous ways to help retailers gain insight into their customers. Smartphones and wearables are now being used by businesses that want to crack the ideal customer service formula.

World’s biggest retailer turns to big data analytics

Walmart is the largest retailer in the world, operating out of 20,000 stores in 28 countries under 59 different brand names.

Currently undergoing a digital transformation, Walmart is in the process of building the world’s largest private cloud system, which will have the capacity to manage 2.5 petabytes of data every hour.

To enable this data to be analysed sufficiently, Walmart has created the Data Café, a state-of-the-art analytics hub located in the company headquarters in Bentonville, Arkansas.

The system housed in his Data Café allows large amounts of internal and external data to be processed and also allows for 40 petabytes of store transactional data to be modelled, analysed and visualised.

As well as company transactional data, the Data Café harnesses information from 200 other sources to help Walmart keep abreast of competitor movement. These datasets include meteorological data, economic data, social media data, gas price, and local event information.

Once analysed, these datasets could offer solutions to issues found both in-store and online. By using specifically designed algorithms, Walmart can solve the problem and generate a fix in a matter of microseconds.

Keeping customer data safe and and secure

Having direct access to customer data comes with great responsibility. Retailers have become savvy in the process of data capture, and the understanding of that data. But now there is a real possibility that this could push away customers as they find out just much a retailer knows about them.

Although the benefits of big data are huge for retailers if their efforts with the technology are to pay off, they need to tread carefully with customer data as tracking is no longer restricted to general purchases, it is fast becoming very personal.

This access to customer information and the tailoring of services is perfect if it provides customers with exactly what they need; less so if it seems pushy or invasive.

The advancement of analytics is becoming so sophisticated that it can take advantage of individual’s loyalty card history, payment histories, and browsing habits. It also means retail marketing initiatives can identify if someone has lost their job (because spending drops and regular premium brands are replaced by ‘value’ brands), or even if the customer is away on holiday.

However, it isn’t the storage of data that raises issues, it’s the storage. In order to keep data safe, retailers should enforce high-security and encryption protocols that are unable to be breached.

Can big data save high class brands?

Now we’re in the times in which consumers can shop around the clock, retailers are focused on improving their business by harnessing deeper insight into significant metrics such as stock levels and consumer behaviour patterns via data analytics processes.

Amazon has implemented data analytics insight across all its pricing precision and product recommendation expertise, offering an unparalleled service to the retail customer

High-end retailer, Macy’s has also found success collecting big data in recent years, and now thanks to the analytics, it is able to use the data for positive customer interaction.

To secure Macy’s future in the big data world, an eBay executive is set to join the department store to help balance the art and science of retail with big data. Unfortunately, this restructuring will result in 100 job cuts at the 800-unit chain, which has been battling ongoing sales declines.

Retail cybercrime doubles as hackers target shopper data

According to the Information Commissioner’s Office, the number of data breaches has doubled year on year, putting pressure mounts for the retail sector to seriously invest in cybersecurity.

In 2016/2017, there were 38 reported data breaches, which is up from 19 in 2015/2016. Law firm RPC, which conducted the research on the increasing rise  f online retail data breaches, found the sector has become targeted as it has a large amount of quality customer information, and inadequate security systems to protect it.

Find out more about well known retailers including Debenhams, Sports Direct, Morrison’s and Carphone Warehouse that have suffered high-profile security breaches over the last two years.

The use of big data analytics in retail

It is no secret that big data has huge benefits in the retail industry. Big data has assisted in generating new income streams, improving customer interaction with incentives and offers. But, the question is how will big data affect the future of retail?

https://www.churchillfrank.com/blog/big-data-retail-data-industry/

As the Internet of Things (IoT) becomes more significant, more retailers will start to equip their high-street store with sensors that are able to sense when a nearby consumer has the store’s app installed on their smart device. From this, retailers are able to deliver timely offers to influence a shopper’s decisions to go into a store and buy products, or be introduced to new products that they have not yet come across.

It’s no secret that big data will benefit the retail industry, by generating new income streams and improving customer interaction.

This use of the IOT is only the first we expect to see in a store environment, but it could pave the way for more advantageous methods in the future.

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