Did you know that big data has revolutionized the whole thing about retail marketing? Imagine being able to predict what your consumer will prefer in the next three years, isn’t that amazing? No? Let’s start by defining what big data is. The term ‘big data’ has different definitions, but the most widely used has the words volume, variety, and velocity in it. This is to mean that big data are large fragments/ volumes of information both structured and unstructured, these come in various forms and at extremely high speeds. The tech giant IBM specifically uses of the words “multiple sources- that every digital equipment and social media platforms produce it”.
There’s so much you can do with a well-structured big data infrastructure. Take an example of a pizza company which has conducted thorough market research and found out that during bad weather, consumers stick indoors and order for an average number of pizzas on a daily basis. They then make use of some mobile app to deliver geo-based marketing campaigns which target a specific consumers’ location. The results are unbelievable! The trick behind big data is not only gathering but also applying the large data sets to your advantage. Discussed below is a list of some ways online retailers can reap from big data.
Value-based Competition Vs. Price-based.
Information is a big weapon against your competitors. Whether it’s data about your consumers or your competitors, how you use it determines your position as compared to others. Currently, most retailers focus on what the customer will buy next, where they will travel next or going through consumer spending habits. This competition will only last a while because the next retailer can equally do the same. In the long-run the return on investment will be so minimal there won’t be a difference between any two given competitors. Amazon, one of the hugest retailers has been using big data from rival retailers to change prices every now and then. In as much as it appears clever, it doesn’t last long. There’s a better approach to competition.
Value-based competition is the way to go. Look to establish long-lasting relationships with your clients by creating value for them. Instead of asking what big data can do for you, ask what it can do for your consumers. Asking such questions prompts us to develop infrastructure such as that used by Netflix which recommends products to consumers thus spending less on search expenditures.
I wouldn’t really call it spying, but whatever ‘real-time monitoring’ of consumer spending habit is, it really works miracles. Amazon and Netflix are known for recommending products to their customers. Besides the good feeling that comes with being understood or uniquely treated, there’s reduced time wastage. Big data can provide retailers with what a consumer likes and they can recommend it to them once they land on their e-commerce platforms. Amazon adopted the “customers who bought this also bought… pick-up line’’ which contributed to its 29% sales rise gathered from the retailer’s recommendation systems. Additionally, use big data to inform specific shoppers of promotions or special offers that are relevant or only applicable to them.
Forecast Future Trends
Perhaps the most notable use of big data, future trends prediction informs the retailer what will be in demand in the coming couple of years. Gathering consumer data not only helps customize products, but also helps monitor the progress of certain aspects which can be of help in the decision-making process. You may decide to optimize on certain product’s production or lower their production. Similarly, you may opt to totally shift from one product and go for another. A good example is a restaurant which has frequently been receiving negative reviews on third-party sites due to poor preparation of certain Italian recipes. You can as well do Chinese or hire a new competent Italian chef. Various social media platforms have rich content when it comes to what’s trending.
Lower Cart Abandonment Rates
According to latest Listrak shopping cart abandonment index, the abandonment rate currently stands at 79%. The average abandonment rate in the past 6months stands at 77%. What this means is that in every four online shoppers, 3 of them exit the retailer sites before sealing the purchases. This is a big loss to e-commerce firms. Similarly, completion rates are higher in desktop (13.5) and tablets (13.4%) than in mobile devices (8.5%). With big data, retailers can allow transition from one device to another. They can as well collect information on reasons behind cart abandonment and act on these to reduce it.
Improve on Customer Experience
Although quite debatable, the subject of whether to harness personal data and use it for customer improvement is an ethical one. Since you’re collecting data to better understand your customer’s spending habits/ preferences, you can use it to improve the customer experience. Real-time monitoring can be used to reduce or even prevent credit card fraud just by collecting social feeds and geo-locating your customers.
Over to you! You may decide to just gather big data without using it, or you could step up and embrace this powerful tool. It’s time you did some analyses and consulted some tech geniuses to help you make sense of the big data available at your fingertips.