How Big Data Is Changing the Retail Industry
They say, ‘Bigger is better’.
But that’s not always true, is it?
Croma Retail – an Indian electronics retailer learnt this the hard way.
They were facing a unique situation. Instead of boosting sales, their large and diverse portfolio was ironically causing a decline in the conversion rates.
Ajit Joshi, CEO & MD, Croma Retail Ltd says, ‘Because of our varied product offering, customers weren’t able to find what they needed and conversions suffered as a result’.
Another challenge was the large amount of new products that the store brought online. Things were so bad that they had to manually promote the new products for getting attention.
The sheer scale of their portfolio became detrimental to their growth.
That’s when they turned to big data analytics to study the historical data of their customers and understand their purchasing intent in real time.
Big data analytics provided solutions for personalized product recommendations and seamless website navigation – thereby eliminating the need to promote the products manually.
So after six months, Croma witnessed an increase of 24.9% in revenue share and 217% increase in conversion rates.
This is one of the many examples of how big data is changing retail customer experiences, and driving sales.
Big Data Analytics: A Game Changer
Big data analytics has become an integral part of modern retail, so much so that it’s longer viewed as optional for businesses that wish to re-invent and provide great customer experiences.
Understanding your customer has become less about face-to-face interactions and more about using advanced algorithms that scour demographics, sales and social data – looking for patterns that provide an insight into buying behavior.
Today, big data is helping retailers in making smart merchandising decisions, increased operational efficiency, and improved demand forecasting capabilities.
A survey by INSEAD has found that companies with above-average performance using customer data and analytics are outpacing their competitors by 2-3 times in sales, profits and shareholder return.
As big data continues to evolve, we are looking at a future where retail will be more intelligent, connected – and personalization will become the new norm in customer satisfaction.
Retailers Fine-Tune Social Media Data Usage
There is no dearth of consumer information in social media.
But analyzing customer data from these social media platforms is like finding a needle in a haystack – that’s a lot of chatter to sift through to uncover every nugget of valuable information.
However, with big data analytics, it is possible to gather and interpret vast quantities of unstructured data, as well as merge it with other data sources to gain a holistic view of the customer across different channels.
As the technology improves, retailers will get better at filtering the trash and focusing on the data that provides insights into the customer’s needs and preferences, and what they feel about certain brands and products.
Provides Better Omnichannel Experiences
Mobile technologies and social media are evolving each day – and they’re changing the way customers interact with brands.
The key challenge, however, is the ability to deliver the same experience across a multitude of channels.
As retailers are increasingly diversifying their channels, there is a large amount of pertinent customer data that is flowing in from multiple sources.
Big data analytics will facilitate the retailers to harness this data so that all channels have the same customer information to draw from – at all times.
This way, retailers will be able to deliver better omnichannel customer experiences, improve supply chain management and customer retention.
Advent of Internet of Things (IoT) into Retail
A recent study by Accenture states that the IoT movement will provide significant opportunities to retailers to improve their customer experience and supply chain management.
As the Internet of Things is getting popular with connected devices and wearable technologies, large amount of data is available for retailers to improve the user interactions, and deliver personalized suggestions to the individual customers.
Purely from a business perspective, IoT technologies helps retailers augment operational efficiency by employing a myriad of connected devices to track inventory and adjust pricing in real-time.
Bottom line – Go Big or Go Home
From using weather patterns to predict in-store sales to forecasting demand using website browsing patterns, big data is changing the way retailers do business.
Armed with analytics, we are now able to correlate product sales with seemingly unrelated factors such as pop culture, weather, consumer sentiment and even environmental events to improve our financial performance.
As Darwin said, ‘It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change’.
Businesses will have to embrace big data analytics to adapt to the changing circumstances to stay ahead of the competition.: