Five Big Data Trends Revolutionizing Retail
By Kelly Kennedy, Senior VP of Enterprise Sales, Infogroup Targeting Solutions
Big Data means big changes for retail marketers. The amount of data generated across channels has significantly altered how retailers reach their target consumers. In addition to planning and execution, marketers must sift through enormous amounts of data. This in-depth process, along with the overwhelming amount of information, makes it difficult to decide not only what’s most valuable, but also to discover what information gets lost in the mix.
The amount of Big Data has not only grown in size, but also the variety of data has widened as well. Demographic information, such as name, ZIP code or gender, is now paired with an array of social, website and purchase information. These additions offer marketers insights into how and why consumers make purchase decisions, allowing them to look further into the purchase cycle than ever before.
Although the sheer amount of data alone may seem like it would be easy for marketers to decipher the best consumers to reach, without proper data hygiene to interpret information, Big Data does not offer much value. Interpreting data and identifying quality customers through data hygiene and analytics is far more important than storing tons of data.
The retail industry faces a number of challenges. From a lackluster economy to the entry of mobile commerce, retailers have been forced to step back and re-evaluate how they communicate with consumers. The insights Big Data provides can be used as stepping stones to a more streamlined marketing process for retailers, helping them to coordinate their data alongside the right technology and best practices to get the most from their marketing communications.
Growing Mountains of Data
The volume of information available to retailers is unprecedented, even for large brands that have been aggregating this information for years. But the misconception is that marketers must catalog and keep every last piece of information to get the most out of their efforts. You have to be collecting the right data and using it in a way that lends insight into behavior and drives intelligent customer interactions.
Technology Evolves and Investment in Technology Increases
In the past, marketers were concerned with storage, investing as much as they could in storing data for future use. Since storing data is no longer an issue, retail marketers must now invest in technology and analytics to best utilize data rather than just investing in data management. Many retail leaders have begun investing in centralized databases and focusing on data hygiene and analytics, allowing them to predict consumers’ purchase activity and identify the most valuable customers.
Tackling the Omnichannel Puzzle With Data
Never before have retailers had so many opportunities to interact with customers within so many different channels. The rate at which mobile, tablets and social media have been adopted into the market has left retailers with an enormous influx of data that they are using to create a better, more consistent customer experience across all channels. Retail marketers are using the combination of channels to find their individual “niche” in the customer communication experience. They can identify the best ways to keep their marketing efforts consistent throughout channels and most of all, the key points of purchase within each channel. They can pinpoint when a customer will shop in the store for certain products or only purchase certain types of products online.
Relationships with customers were simple when almost all shopping was done face-to-face in a small shopping environment. A salesperson could figure out a customer’s tastes, interests and budget easily. With large chain retailers and online shopping, personal relationships with shoppers are rare, if not nonexistent. According to research cited in the Harvard Business Review Blog, personalization can deliver five to eight times the ROI on marketing spend and lift sales 10% or more.
Personal relationships with customers are invaluable. Data-driven personalization is the key to how retailers can get back in touch with their customers on a deeper level. By knowing what a customer has purchased, down to what they enjoy looking at most often, retailers can use data to drive a personalized shopping experience.
A Renewed Focus on Profitability Segmentation
It’s no secret that finding and prioritizing the most profitable customers is essential for success in retail. Unfortunately, it costs more to gain new customers than it does to retain some of the best customers. By analyzing customer behaviors and needs through improved data-crunching initiatives, marketers can develop programs and deals for shoppers that drastically increase their value. For example, marketers can offer incentives and specialized programs tailored to low-value shoppers during a peak spending period.
Take Advantage of What’s in Front of You
Many retailers fear the size of Big Data. Rather than running away from the unknown, retail marketers must take advantage of this opportunity to harness data and apply it to where it’s most needed. It’s about enforcing the idea that it’s not about how much you have, rather how you use it. The industry is more competitive than ever, and retailers need to take this chance and differentiate themselves from the competition through a data-driven approach.