Data collection is a goldmine for retailers because it can help offset the downward pressure created onmargins as a resultant of having more informed and price-conscious consumers.
According to a 2011 study performed by McKinsey Global Institute, utilizing big data has the potential to increase the operating margins of retailers by up to 60 percent. The adoption of big data is expected to increase productivity throughout the retail sector by at least one-half percent per year through 2020. Embracing big data is an effective strategy for retailers attempting to overcome the tight margins associated with their particular sector.
Tapping into Social Media
The power of social media is undeniable: at least 80 percent of us trust referrals from friends and family, while over 65 percent of us trust the reviews and comments left online by total strangers. For retailers who understand how to properly collect and utilize data, social media can serve as a large-scale focus group that provides insight for making big marketing decisions. This data can be a valuable resource for finding out how consumers feel about a particular brand or promotion. Social media can also provide real-time qualitative and quantitative data on a retailer’s target audience.
Personalization is Consuming Retail
Without investing in collecting data for personalization, retailers are typically under-utilizing any loyalty programs already implemented. Personal data on customers can also be used to help improve forecasts, predictions and pricing decisions. The more personalized retailers make their approach to connecting with customers, the more touchpoints and channels they’ll have to utilize as resources for valuable data on the target audience. By data collection and integrating data from different feeds like smartphones, tablets and other personal devices, retailers’ position themselves to offer the seamless, omni-channel experience consumers prefer. Successful retailers understand how to leverage the purchasing data collected in-store into improving online sales and engagement.
By collecting and integrating data from different feeds like smartphones, tablets and other personal devices, retailers' position themselves to offer the seamless, omni-channel experience consumers prefer.
Mining for Big Data in Retail
For successful retailers, there is a monumental difference between recognizing that data is valuable, and understanding now to actually extract value insights, monetize it for marketing and sales and secure protection from cyber attacks. Retailers can begin by identifying which segments of the operation contain the most valuable sets of data. For example, digital marketing campaigns not only affect e-commerce, but they can influence up to 40 percent of in-store sales as well. Implementing automation tools to process the data can help improve the efficacy of marketing campaigns and sales revenue by up to 50 percent in some cases.
Data Streamlines Retail Operation
The ability to apply real-time analytics to data under the consumer fickleness and wavering sales associated with the retail sector is what separates strong sales from struggling brands. Retailers can benefit by analyzing complex data from a central location and becoming a brand associated with valuable offers that are both genuine and timely. Using an automated process to extract data helps retailers improve their engagement while increasing personalization and reducing the quantity of marketing material sent out to inundated customers. When the retailer uses data to remain relevant across channels, personalize communication and time calls to action with precision, profitability increases substantially.
Monetizing data to create additional revenue streams is how many retailers differentiate themselves in this super-competitive sector. Investing in ways to extract, process and evaluate data effectively is a necessary strategy for operating in today’s retail sector. Data can provide real-time insights into social media behavior, brand perception, automation, personalization and other critical factors in improving customer engagement. For retailers serious about sustaining profitability in this competitive industry, investing in strategies to capture more valuable data on consumers is absolutely necessary.