For years to come, data and technology will continue to impact the retail sector—and demand for qualified analytics professionals already exceeds supply.
FREMONT, CA: To remain competitive, retailers must make more informed purchasing decisions, offer relevant discounts, persuade customers to embrace new trends, and remember their customers' birthdays—all while running the business behind the scenes. How are they able to keep up? In retail, big data is critical for marketing and retention, streamlining operations, optimizing the supply chain, enhancing business decisions, and ultimately saving money. Before the cloud becoming widely available, businesses were limited to tracking what a customer purchased and when. With the more sophisticated technology, companies can collect a wealth of information about their customers, including their age, geographic location, gender, favorite restaurants, other stores they frequent, and the books or news they read. Retailers have now shifted their focus to cloud-based big data solutions to aggregate and manage that data.
The following section outlines how these massive data sets assist retailers in making critical business decisions.
Big data analysis enables the prediction of emerging trends, targeting the right customer at the right time, reducing marketing costs, and improving the customer service quality. The following are some of the most frequently cited benefits of big data in retail:
360-degree view of the customer
The term "360-degree view" is frequently used, but what does it mean? It all comes down to creating the most accurate picture of a customer possible. Retailers must understand a customer's preferences and dislikes, their propensity to use coupons, their gender, their location, and their social media presence, among other things. By combining a few of these data points, sophisticated marketing strategies are created. For instance, fashion retailers frequently employ high-priced celebrity brand ambassadors. However, by focusing on their customers' gender, interests, and social media presence, fashion brands can identify more affordable and effective micro-influencers to represent their brands on Instagram.
Businesses benefit from big data when it comes to product pricing. Consistently monitoring relevant search terms enables businesses to forecast trends in advance of their occurrence. Retailers can anticipate the launch of new products and develop an effective dynamic pricing strategy. Pricing can also benefit from a 360-degree view of the customer. This is because pricing is heavily influenced by the geographic location and purchasing habits of a customer. Businesses can conduct beta tests on segments of their customer population to determine the optimal pricing strategy. Understanding what a customer expects can help the retailer identify ways to differentiate itself from the competition.
Streamlined internal management
Big data help companies control the supply chain and distribution of their products. Retailers monitor their upstream operations by reviewing product and server logs. Products introduce bugs, too. Wearables that are registered will show performance over time.
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