So, is Amazon killing retail? With over a thousand US retail stores having recently shuttered, many analysts are predicting the apocalypse for brick-and-mortar shopping. Yet despite the dire predictions, new technological innovations are quietly reimagining physical stores to serve customers in ways that even e-commerce can’t.
Big Data Revolution: Not Just an Online Phenomenon
For retailers, information has become a game-changer, and perhaps even a life-saver. Retail data analytics has the ability to help companies stay abreast of shopping trends by applying customer analytics to uncover, interpret and act on meaningful data insights, including in-store patterns.
The way we buy and sell is evolving. Both online and offline, retailers that embrace a data-first strategy towards understanding their customers are reaping dividends.
Indeed, things have progressed rapidly from early Big Data retail experiments, such as Target’s infamous attempts to figure out who was pregnant. Yet following a few false starts, using Big Data in the retail industry has turned into a major boon for many retailers. Via intelligent analytics, retailers are now able to effectively target potential customers. They can also strategize product creation and supply chain planning with the help of Big Data.
How it Works: Savvy retailers can use Big Data to predict trends, prepare for demand, pinpoint customers, optimize pricing and promotions and monitor real-time analytics and results (Source: http://data-flair.training/blogs/big-data-in-retail-industry-real-world-uses-examples/).
Some examples include Macy’s, which asserts that its Big Data program is a key competitive advantage and cites it as a strong contributing factor in boosting the department store’s sales by 10 percent. In addition, Sterling Jewelers attributes a 49 percent increase in sales during the last holiday season to Big Data. Kroger CEO David Dillon refers to his Big Data program as his “secret weapon.”
More broadly, several major US chains are already utilizing Big Data to modify planograms to increase average revenue per cart. Retailers can put on VR headsets to see which items are the bestsellers per shelf and per aisle. Virtual products can be repositioned and sales projections calculated in real time. A process that used to take six months to determine in-store placement can now be completed in a matter of hours.
Numbers Game: The Reemergence of Retail?
Brick and mortar enterprises are thus using Big Data technology in a variety of ways to help change the face of retail. McKinsey analysis of more than 250 engagements over a five year period revealed that companies that put data at the center of the sales and marketing decisions improved their marketing ROI by 15 to 20 percent.
As a result, the massive retail market, which drives $2.6 trillion in business in the United States and employs 42 million Americans, is very much in play.
Data or Die: Nowadays, data is becoming less of an option and more of a must-have in retail (Source: http://www.inreality.com/article/5-surprising-stats-around-retail-big-data-20160407a/).
From predicting trends and forecasting demand to smart merchandizing and optimized pricing, almost every aspect of retailing has been impacted by the emergence of Big Data, which has helped boost the effectiveness of all aspects of retail operations.
A recent survey of merchandising professionals and category managers revealed that Big Data has gone past the buzzworthy stage to being regarded as a legitimate, even crucial, investment.
About 40 percent of respondents surveyed by the JDA Software Group said that Big Data and predictive analytics are their top investment priorities over the next five years.
Retailers and Big Data: Room to Grow…and Grow They Must
The above survey also revealed why such Big Data Analytics disruptors as SQream Technologies are becoming increasingly integral to the wellbeing of today’s retailers. When the JDA Software Group asked respondents where they felt they were most behind, almost 70% said they struggle to leverage improved pricing and merchandising and 60% claimed they are behind in leveraging geographic and socio-economic data for targeted promotions and offers.
The good news for retailers is that they can retain their market share against online upstarts. However, this will require that they stay on the cutting edge of Big Data technological development. Only by combining the benefits of their existing networks and infrastructures with the possibilities brought about by new technologies, including Big Data and real time analytics, will retailers’ success be, if not guaranteed, then certainly a more realistic outcome.