Big data can be used in the strangest of ways and the retail industry has usually been the heaviest user of all. Retail companies can gather information and make actionable decisions based on their findings. Yet, even with this advantage, some are still going under because of the strain, the cost, and the time required. How can the retail industry use big data wisely and how are some doing it already?
Here are the four wise practices that convert raw data into satisfied customers, improved products, and notable profits.
1. Narrowed Target Audience
Big data has given retailers access to more information than ever before - certainly more than they know what to do with. This has led to the first generation of big data enthusiasts becoming too excited about the quantity of data over the quality. The new partakers, as well as the older retail chains that have a clue, are driving in the opposite direction. Rather than catering to a massive group of people with a few differences in tastes, successful retailers are deciding on their Perfect Customer – their ideal target audience – and then using this as a criteria to sift through the mass of data available. By doing so, they have more accurate data, allowing them to tailor their services and approaches to one exact group and giving that group what they want every time.
2. Blending First-Party with Third-Party
Big data can be time consuming and expensive, there is no arguing that. With so much to sift through, it’s easy for data to become muddled and outdated before it’s useful, lowering the retail industry’s return on investment (ROI). Wise competitors, however, are working smarter rather than harder by using the assets of both first-party data and third-party data. First-party data is gathered by the businesses themselves, collected off their website, through social media, and through newsletter sign-ups. Third-party data is purchased from other businesses or corporations where they’ve gathered data from places only available to them. By narrowing down their target audience and taking advantage of converged infrastructure, businesses can now use the vast information from both parties to create a more accurate and clear picture of their Perfect Customer, allowing more to catch their attention.
3. Specialised Offers
Big data is about more than just knowing your customer – it’s about making the information actionable. Tailoring marketing campaigns or making the switch from one social media platform to the next to better reach your audience is a part of it, but also altering your services or products to be more appealing is important. To take it one step further, with big data, you can see what sort of special deals or offers your customer is most prone to cashing in on. In their past purchases, have they always chosen a 2-for-1 over 50% off? Is there a specialised product your competition offers that they prefer? This knowledge in hand, you can offer similar or even better details to earn a sale.
4. Real-Time Updates
Like it or not, we all have a bit of an impulse-buyer in us. Even consumers with more self-control are prone to making a purchase if they’re in the buying mood, rather than later when they’re not so interested in giving up their hard-earned cash. Wise retailers are taking advantage of this and the Internet of Things, using the data they’ve gathered through third parties and first parties, and using the sifting technique to narrow down their Perfect Customer, to digitally identify when their ideal client has walked through the door and what they’re interested in. At this point, they can offer deals and breaks on their smart device, even taking it to the next level by using GPS to see where they are in the store and offering them deals based on the section they’re standing in. In the kitchen department? How about 20% off that dish set you were looking at online?
The idea behind any business’s success is to work smarter, not harder, and wise retail companies are doing the same with big data. By personalising their customer’s experience and customising the way they find this information, the retail industry can continue to rule in the public eye.
- Building Blocks: Big Data and Machine Learning - Microsoft Virtual Academy
- Data Science and Machine Learning essentials - Microsoft Virtual Academy
Rick Delgado feels blessed to have had a successful career in the tech industry and has recently taken a step back to pursue his passion of writing. He’s started doing freelance writing where he occasionally works with tech companies like Dell Computers. He enjoys writing about new technologies and how it can help us and our planet.