Big data analytics has become a vital tool to all aspects of the business world, so it comes as no surprise that the retail world would jump on the bandwagon. There are so many insights retailers can gain from big data to make their industry more profitable. While it might seem difficult to implement, the insights you can gain from it are worth the work. Analytics are being used at every stage of the buying process — from predicting popular products to pricing and figuring out what to sell to customers next. Retailers aren’t holding back on what big data can do for them.
Understanding the customer
With the introduction of big data into retail, retailers are able to understand their customers’ behavior better and make future decisions on what will work best for their store. They know what the customer usually buys and are able to figure out what the customer will buy next time. Each customer is given a guest ID number linked to their credit card number so retailers are able to view that customer’s buying habits. From buying habits, you can tell a lot about a customer like their interests and lifestyle. This goes beyond just the brick and mortar stores though.
Online shopping makes analytics a little easier for the retailer. They are able to see everything you click on and add to your cart. They can see what products people are more interested in and decide on how to market these “trending” items. They also navigate the internet and find what products people are talking about. This is how the trends are formed.
When you shop in store, there are still a few tools retailers can use to find trending products. Retailers use video object tracking through surveillance videos, and sometimes even the camera on your phone, to determine what areas of the store most customers visit and what kinds of displays get you to buy the most. This helps them to predict buying patterns a little more than just looking at what you’ve actually purchased.
What’s in Demand?
Using all these insights they’ve gained from the customer’s habits, retailers are able to see what is more in demand and what they should get rid of. This aspect of big data allows them to stop wasting money on dead end products and fill the shelves with things people really want. This comes in handy at peak seasons. If there is a product everyone wants around Christmas time, you’ll know that you should order more of it at that time of year. Or if one product does really well in the summer but not as well in the fall, you won’t want to waste your efforts selling it when school starts instead of when summer break is starting.
The Price is Right
Before big data, retailers would raise or drop prices at the end of a season, when they knew demand would be changing. Now they can see the demand for a product and what competitors are doing in real time and adjust prices accordingly. Demand changes throughout the shelf life of a product and analytics allow companies to see when that is happening. Based on this information they can either raise or lower the price to reflect the demand as it changes, which could possibly bring revenues on the product pack up.
Retailers have also found big data to help in sale pricing. Big data was a major resource in Black Friday deals this last year. They were able to predict what would fly off the shelves and what the optimal price for that to happen was. They knew the behaviors of their customers and knew what would appeal to them. The number of customers increased by nearly 2 million people from the previous Black Friday and these insights paid off greatly. Now we know the power of data and retail.
Big data has proven to be valuable in so many different areas that it comes as little surprise that the retail industry would find use of it. Through different tactics, many retailers are able to make the most of the information and bring in some huge profits. The insights which come from big data are giving the retailers who use it a huge leg up on the competition. If retailers are smart, they’ll be jumping all over the big data bandwagon.