For retailers big data is a key competitive advantage that can increase market share, boost thin margins, streamline operations and allow better targeting. A McKinsey study stated that, by using Big Data to the fullest, retailers stood to increase their operating margins by up to 60%. In a recent Wikibon.com article, big data expert Jeff Kelly explained that the retail industry is among the early adopters and innovative users of Big Data.
Here are a few use cases where Big Data can offer great value for retailers:
Dynamic pricing. Retailers are using real-time data to dynamically price goods and services, or to generate special offers in response to their competition. They are leveraging competitor pricing, supply chain and inventory data, market data and social media to adjust prices in real time to maximize sales and beat their competition.
Advanced social intelligence. Retailers are building deep understanding of consumers and influencers related to demand and the customer decision journey. They are leveraging social media, tweets, likes, blog posts and product reviews to signal hot products, determine sentiment, predict demand, control inventories so items are not overstocked, better target offers and prevent product recalls.
Integrating Big Data from various sources in a timely manner will allow retailers to better compete, improve customer experience and make data-driven decisions that will determine their business trajectory. The ultimate value will be derived from marrying external big data, such as weather reports or competitors prices, to the internal data that retailers already collect, such as transactions and order history. This combination will reveal unique insights and “unknown unknowns” that when placed into the hands of pricing analysts, campaign managers or brand specialists, can guide agile decision making related to pricing strategies, inventory decisions, customer loyalty and product development.
If you are interested in learning more, check out our on-demand dynamic pricing webinar.
Authored by: Hila Segal, Director, Product Marketing