“Without big data analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.”- Geoffrey Moore
The quote by the noted American organizational theorist appeared a little exaggerated in 2013, but not anymore.
Big data analytics has become indispensable in 2017 and will rule in the coming years to reshape a multitude of industries like retail, healthcare, education, banking, telecom, and more.
While, ‘Big data’ is a voluminous amount of data (both structured and unstructured), gathered by businesses, ‘big data analytics’ refer to the process of examining the ‘Big Data’ to uncover a myriad of co-relations, trends, patterns, preferences and much more.
To understand the term better, you can think ‘Big Data’ as a haystack in which you can spot a needle with the help of analytics.
In fact, ‘Big data’ is reshaping the retail and e-commerce industry in more ways than one. Let us have a look.
In the pre-globalization era, retailers knew their customers by their face and their preferences, but the retail industry has undergone a vast change over the last two decades.
With an increased number of people shopping online or finding retail shops via their mobile devices, now it is impossible to keep a tab on the preferences of each customer.Big data, however, enable retailers to make personalized product recommendations to enjoy more conversions.
Amidst millions of retail stores and online stores, if a store offers you a personalized shopping experience, you will love to shop more without wasting your time to visit other stores. Isn’t it?
No wonder, today most of the online shops have product recommendation engines to achieve the same.
Top product recommendation engines:
Big data is the force that drives these engines to offer product recommendations to each visitor or potential customer via website recommendation, personalized emails, push notifications, SMS, and maybe more!
Following are the sources to fetch big data for retail:
•Items a visitor has liked
According to the findings of McKinsey, 35 percent of Amazon and 75 percent of Netflix customer purchases are due to product recommendations.
Big data is helping retailers know about the products that they should include in their inventory to drive sales.
Thanks to Big data, retailers are now reading minds of their target customers. Most retailers have faced the problem of cart abandonment on a regular basis. Many brick and mortar retail shop owners witness a customer turning away from their shop after going through a few items in which he or she has even shown immense interest.
The customer behavior has thus remained a puzzle to retail store owners. What they fail to comprehend is that a customer can behave in such a way because of the high price or a complicated check-out page. Big data empowers them with enough information to retain them by offering –
•Multiple payment options
Earlier, retailers use to drop the price of products at the end of the year or a season. They were aware that customer demands are going to change or the product shelf-life is about to end within the next few months.
It may sound strange, but it is the big data that drives the smashing sales at the Black Friday deals. The insights provided by it help retailers to know about the products that have the potential to attract the target customers most along with an optimal price to make it a reality.
They know about the customer behavior and drop the price of their products accordingly. Many online stores even offer a price drop in real time! Top shopping sites offering real-time price drop are Jet.com and Drop Til You Shop.
Analytics offered by big data also help retailers to have a seamless integration of various payment methods into a centralized payment platform.
Steve Jobs was right when he stated-“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”
Enhancing customer experience has always remained a challenge for retailers. Retailers hire customer representatives, but they also could not answer promptly or in the right manner.
As a result, customers stay unsatisfied, but ‘Big data’ provides the solution. It enables to offer personalized solutions to each customer.
Retailers have now a new tool ‘chatbot’ with the help of big data, machine learning, and AI to improve customer experience.
A chatbot is an automated program that can stimulate or mimic a human conversation by using natural language processing (NLP). The data collected in the log of a chatbot is voluminous. It undergoes the big data analytics to provide insights into the way people ask for a product by using various words. Retailers are thus well-equipped to provide a personalized shopping experience.
List of some retailers who have implemented chatbots for an enhanced customer experience:-
•Home Depot-a home improvement supply retailer
•eBay-a multinational e-commerce marketplace
•Nordstrom-a chain of luxury department stores
•Victoria’s Secret-a manufacturer, and marketer of women’s premium lingerie, womenswear, and beauty products.
Sometimes, they act as a shop floor assistant and sometimes as a guide who can direct shoppers to the product they are seeking. In short, the future is great for chatbots and the data provided by them for analytics can do wonders for the retail industry.
Many times, you have felt that advertising that you frequently encounter on various websites is a little intrusive and bombarding. Retailers have also understood that instead of appealing to their target customers, their advertisements are drifting them away. For the same reason, internet users are now increasingly using ad blockers while browsing the web. Even the internet giant Google has expressed its displeasure at websites with too many advertisements.
Big data provides valuable information gathered from the digital footprints of targeted customers to the advertiser to create personalized advertisements that are well-timed and on the right medium like print, radio, television, web, or more.
For example, Netflix uses big data analytics to target its customers with accurate personal show recommendations that help the company to save a substantial amount of revenue that was earlier spent to appeal and retain its subscribers.
Another brilliant example is the one that you have noticed umpteen times whenever you log in to your Facebook account after visiting a shopping website or e-store. You start getting advertisements for products from the same website in your Facebook newsfeed. Isn’t it?
Today, retailers along with all kind of advertisers from other industries are making the most of these personalized advertisements on Facebook as the social media platform has more than one billion active users.
Thus, Big Data is bringing a paradigm shift in retail & e-commerce industry. Along with other technological innovations like artificial intelligence, it may altogether revolutionize the way we all shop!