Saturday, 11 May 2013

Big data Analytics in Retail


All the industry leaders like  Wal-Mart, Axa, Citibank, Humana, GE and several others are exploring how Big Data analytics can be used to better understand customer needs, pinpoint risk, improve marketing, enhance the customer experience, combat fraud, and drive profitability.  

Companies are seeking ways to rebuild their customer relationships in this time of extremely high customer expectations.

Retail industry is among the early adopters and innovative users of big data. But they have the challenge of tackling the huge data since 1970s when barcodes were first introduced to scan the products at POS.  All sorts of supply chain data came into effect later in 1980-90s while RFID and other sources such as surveillance video cameras started sending humongous data to data centers recently.  These have challenged Retailers to capture, store, cleanse & analyze all the data they collect.

Further to flood the data centers are consumer’s interaction with social media & internet which is generating billions of data points that can be measured via clicks, page views, time spent on per page and path traversed from landing to conversion.
Big data analytics is helping retailers to collect and analyze this fine grained shopper visit data and optimize page designs, placements and tailor promotional messages.

McKinsey report say that using big data analytics can raise the operating margins by as much as 60%

Some of the questions Retailers have are:
·   How to drive critical decision around market segmentation, personalization & merchandizing?
·  How to avoid lost revenues due to stock outs, lower online sales per visit, lower visit to buy ratios?

Here is a glimpse of what retailers can do in big data analytics:
Customer:

·        Enhancing customer experience across all the channels such as calls, emails, campaigns, catalogs, mobile offers, brick & mortar stores
·        Customer sentiment analysis to know the market pulse and market dynamics
·        Call center data analysis for customer feedback
·        Build loyalty programs based on purchase data & customer segmentation
·   Staffing optimization based on weather forecasts & promotional campaigns for better customer experience

Merchandizing:
·        Optimizing the product placements and layouts based on video data
·        Price optimization based on competitor pricing
·        Market basket analysis for revenue growth
·        Optimizing seasonal markdowns
·        Store analysis for best location & better effectiveness
·  Improve in-store sales by leveraging past data with current economic, weather & season/holiday data

·        Consumer segmentation, cross selling
·        Campaign analytics to channelize advertising dollars in optimal medium for highest ROI
·        Sentiment analysis from social media, call centers, surveys, blogs, product reviews
·   Identify new products, service & market opportunities by real time monitoring of these customer sentiments
·        Location based personalized offers on smart phones, tablets
·        Web log analytics for customer behavior analysis & next best offer

Supply Chain:
·        Inventory optimization to avoid stock outs
·        Demand driven forecasting fueled by structured and unstructured data
·        Route optimization for cost reductions
·        Warehouse space optimization
·        Vendor performance analysis for better competitive prices

Ultimately, the goal of big data analytics is to develop an effective Omni-channel experience that integrates many different factors of supply chain including supplier effectiveness, warehouse optimization, and inventory / logistics optimization for real-time customer engagement.
Big data analytics provides the required ammunition & tools to accelerate growth, boost profits, control risks and meet regulatory & competitive demands.

10 comments:

  1. These challenges have always been there. The key question before a retailer, or anybody, should address is if the current data is being analyzed and leveraged optimally. If not, then existing data itself is BIG DATA for the company. The social media or unstructured can wait for the next phase.

    ReplyDelete
  2. Data is captured thru search terms, voice samples, or product reviews, the users are in a feedback loop in which they contribute to the products they use. Analyzing of the required data & its usage is called data science.
    Data can also be capture thru Web Scrapper or Screen Scrapper too.
    http://vijoy4.wordpress.com/2013/05/05/data-science/

    ReplyDelete
  3. Thanks for this post. I found it very informative. The article is professionally written and I feel like the author knows the subject very well. Great work !

    ReplyDelete
  4. Bobbie Lloyd, MSM6 April 2014 at 06:41

    The customer data available to the retailer now does not allow for instant analysis so that the retailer can make up to the minute changes. Big
    Data will change the way retailers do business as the retailers will become more interactive with the customer
    opposed to the forecast model currently in use today.

    ReplyDelete
  5. Great post on using big data analytics in the retail sector. One of the most innovative solutions I've found for predictive analytics is called Model Factory, by Modern Analytics. This big data solution is capable of helping a wide-range of organizations leverage their big data to make intelligent and informed decisions. Worth having a look if anyone else is interested!

    - J.
    AlphaPoint Date Center Software

    ReplyDelete
  6. These challenges have always been there. The key question before a retailer, or anybody, should address is if the current data is being analyzed and leveraged optimally. If not, then existing data itself is BIG DATA for the company. The social media or unstructured can wait for the next phase.

    ReplyDelete
  7. I like the article on the topic due to this reason it is seen that other readers are showing their interest by commenting on it.


    Web Based Omnichannel

    ReplyDelete
  8. I appreciate your blog and very useful information about the Retail Analytics nice work.
    Retail Analytics

    ReplyDelete
  9. Thanks for sharing such kind of useful information.
    Also,Axper is the only organization that has developed tools, strategies and methods for retailers to help them maximize on all their efforts made to invite customers into their stores.people counting solution

    ReplyDelete
  10. Performance management can track almost every metric in the course of a supply chain. But, it can only prove effective if the information gained from big data is transferred into actionable results.
    Top logistics service provider|Best Integrated supply chain player

    ReplyDelete

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