Sometimes data sets are so large they’re basically useless. That is, unless you can use big data to make sense of them. You might have read about how big data is changing the face of manufacturing and health care businesses. But did you know it’s also making huge strides in helping small and medium retailers with planning, efficiency, collaboration and productivity?
Big data could provide the retail edge your business needs to compete with the big boys. That’s what happened when Stage Stores started using big data to drive its analytics. The company knew it didn’t have the same level of resources as Macy’s. But big data helped Stage Stores close the gap, in part through more accurately predicting when to markdown goods, raising the bottom line to the tune of 6.5 percent.
Large retailers are already using big data to more efficiently plan how to cater to their customers. For example, Kohl’s is using big data at point of sale, offering special deals only available to customers when they’re in the store. Big data allows Kohl’s to offer a coupon for shoes a customer looked at online, but didn’t buy, when they’re standing right in front of them.
Perhaps the biggest opportunities are for online retailers. If you offer digital sales, you know how common it can be for potential customers to fill up their cart, then never check out. Big data is making it easier than ever to sell online, by allowing retailers to skip asking for money up front, and send goods to customers anyway along with an invoice for payment. All a prospective buyer has to do is enter in their name, email and shipping address, then wait for the goods. Swedish company Klarna is leading the way. It might sound silly and it would have been just a few short years ago, but big data is making it uneconomic for cheaters to game this system.
In one of the more curious applications of big data, Target is using its customer data to determine when they might be pregnant. This allows a form of targeted marketing (no pun intended) that has increased revenues at the popular big box retailer by $44 billion.
The opportunity of big data comes with one potential minefield however: how do you track your customers to increase your revenues while not coming across like you’re stalking them? Privacy is an issue that’s becoming more and more salient in today’s ever more connected world. And the insights big data offers make it easier than ever to come across like you know a little too much. So keep privacy in mind when your business begins using big data. While you have the opportunity to increase productivity and overall revenue, always be careful to maintain your customers’ trust. All of the big data technology mentioned above is finally becoming economic for forward-thinking small and medium sized retailers, offering the sort of competitive advantage that could only be dreamed of just a few years ago.