The term Big Data has generated considerable buzz in recent years. What is the meaning of this concept and how can retailers benefit from it?
The term Big Data refers to the gathering of large and complex sets of data and the analysis of these data sets for relationships. The development of Big Data is the result of significant advances in the collection, storage and interpretation of data. The technology uses various algorithms and techniques to infer general trends over an entire set. Big Data refers to data as a resource that can be used and reused, often in ways that were inconceivable at the time the data was collated.
Big Data – A Retailer’s Dream Come True
- Competitive agility – Retailers can achieve a competitive edge by enhancing their understanding of customers, multiple shopping channels, markets and the supply-chain. Armed with easily attainable data, it is possible to identify and satisfy general trends and changes in consumer behavior in real time.
- Tailored shopping experiences – Big Data enables the creation of a personalized omni-channel shopping experience for the buyer. Using this data, retailers can automatically provide customers with their shopping channel of preference, regardless of whether it is online from a laptop or mobile device, by phone or in an actual store. The fact that retailers can now focus promotion only on products of interest to the specific customer boosts sales and makes everyone happy.
- Product improvement – The in-depth information and input gleaned from Big Data enable retailers to understand how prospective buyers view their products as well as how to tweak them for different audiences and locations.
- Inventory forecasting – In the past, most retailers had limited predictive capabilities when it came to inventory needs. Orders were based mainly on seasonal considerations and upcoming holidays. Big Data supplies many new parameters such as promotional activities, new trends, shifts in demand, and more. By using predictive analytics, retailers can cut down on wasted inventory.
- Payment data analysis – The use of smart payment platforms enables retailers to collect payment data and perform assessments based on credit card networks used, locations, acquirer success and fail rates in different regions, and more. The parameters collected as payment data can be leveraged by merchants to decide which acquirers to use, with which credit card networks to connect, possible markets to explore, etc.
When Sir Francis Bacon coined the phrase “knowledge is power” back in 1597, he had no inkling how the nature and mass of knowledge or information would evolve. Taking it one step farther, more knowledge (or Big Data) means a lot more power for retailers.