There is no doubt that Christmas is the most important time on the retail calendar. Whether we’re buying gifts, filling the fridge with food in preparation for the big day, or making the most of the January sales, our festive shopping frenzies make up for what might have been an otherwise slow year. To put into perspective just how important the Christmas season is, the average retailer can expect 32 per cent of their annual online revenue to come from the current three month festive period (November to January).
However, it’s not just a matter of opening your doors – virtual or real – and watch the money come rolling in. The retail sector has seen a lot of change over the last few years and as well as facing increasing competition, retailers must now contend with major developments in technology and an increasingly savvy shopper. Indeed, retailers need to evolve their offering in-line with these developments, engage with their customers, give them what they want and improve efficiency. One of the ways retailers can do this is to effectively use the vast volume of data their customers produce.
The ability to manage big data effectively provides a variety of business benefits and as a result the infrastructure to mine available information is employed by many different sectors and industries. Arguably, retail is perhaps the most ideally placed to gain from the insight and analysis big data has to offer. Below, I would like to explore why.
Where did it all come from?
Over the last few years, the retail environment has undergone some major changes, all of which have had major implications on the way we shop. As a result of advancements in mobile technology, social media, multi-channel connectivity, location based services and home delivery, we now no longer have to wait in a long queue at our favourite high street store to purchase an item or to check whether a product is in stock. Nor do we have to navigate our way around over crowded aisles during the January sales, or rush from one shop to another to make sure we are getting the best price. We don’t even have to sit glued to our home computers. We can now shop and browse items while we wait for the bus.
However, it’s not just the way we buy items, it’s also the way we engage with retailers – we want to talk to them, share our thoughts on an item or a service and we want to feel that they are listening. Taking our feedback on board and giving us something back which is personal.
All of this activity across the multiple touch-points along the shopping journey - online, mobile, social media and in store - produces huge amounts of data. In fact, Adobe alone processes and analyses 1.7 trillion transactions on behalf of its customers every quarter. And it’s clear that data is only going to get bigger, and with it poses a significant opportunity for retailers. From all of this content, there are advantages to be gained by accessing, integrating and analysing the data to extract business insights that help drive revenues and growth.
Perhaps the key benefit of big data is the ability to understand your customer and create a single view of them, allowing a retailer to respond and engage in a way that is appropriate to them.
With the right tools and infrastructure in place, businesses can tell whether a customer is new or returning, what they’ve done on the site on previous visits, what products or services they’ve previously shown a high or low level interest in, what campaigns they’ve been exposed to and so on. When captured and mined correctly data provides a valuable opportunity for retailers to target their audience, both online and in store, with relevant products, services and opportunities, and thus significantly increase the chances of conversion.
Managing your big data can also provide real-time clarity to a campaign or a strategy – has it worked, why it worked or what needs improving. Retailers can’t wait for number crunchers to come back days or even weeks later with an insight on whether a campaign worked or didn’t work. The key to unlocking the latent power of such a huge amount of intelligence and granular data is the ability to act on it in real-time, taking into account changing customer needs and preferences as they happen.
Like many other IT concepts, particularly cloud computing, big data has suffered from the hype that has surrounded it. As a result there has been uncertainty as to its business value, particularly from the board which has struggled to understand the practical benefits given the potential complexity. Coupled with this, the ability to mine vast amounts of data has traditionally been seen the work of costly professionals/experts. However, the reality is quite the reverse.
Thanks to attainable and cost efficient technology, real-time big data management can easily be brought in-house, providing retailers with the tools to collate and assess all of the various data streams and extract the insight necessary to make top-level decisions and better inform sales and marketing strategies.
For the last few years we have seen relatively flat reports coming from the high street and the wider retail sector as shoppers tighten belts in response to the economic climate. However, shoppers haven’t stopped spending; they have simply become savvier. Such is the competition and the increasing pressure on retailers, not embracing and exploiting the wealth of insight now available to them as a result of a changing retail landscape, is not just a mistake, it can be a disaster. Those retailers unable to adapt and evolve in-line with the needs of their customer don’t just risk falling behind; they risk being left behind altogether.