With the summer behind us and the days getting shorter, it's now time for retailers to be thinking about their strategy for the upcoming holiday season. It may seem as though Christmas is still a long way away, but for businesses that depend on the period for a significant part of their year's profit, now is the time to be putting plans in place.
But gearing up for the busiest time of year isn't just about setting out marketing campaigns and ensuring businesses are offering the right promotions. In today's environment, where there is so much competition for consumers' eyeballs, being able to stand out from the crowd and offer a unique service could make or break the success of the festive period.
And increasingly, retailers are turning to big data analytics to help them develop their strategies. With the insight gained from these technologies, firms will no longer have to rely on gut feelings or extrapolating from past performance in order to offer customers the products and services they expect.
What data is available?
Retailers looking to incorporate big data analytics into their operations will quickly find there is a vast array of information that can be collected and reviewed to improve insight. For instance, some of the most obvious data will be purchasing history gleaned from loyalty cards, which big retailers like Tesco already use to create personalised offers and coupons.
But this is just the start. Other actionable data can be gained from point of sale machines, online browsing history – even when purchases are not completed and more. Meanwhile, retailers can also use information such as customer demographics and even social media activity to spot emerging trends and understand what their target audience wants.
One of the most common uses for big data in retail environments will be to offer more personalised marketing to customers, through multiple channels. According to research from Monetate, this will be the number one aim for initial big data developments, with 29.6 per cent of companies looking to this for their first project.
But as well as providing specific offers, big data can be used to help guide customers who have a less clear idea of what they want, or if a retailer cannot provide an exact product. Smart Data Collective recently noted that the use of big data tools such as Hadoop can be used to create 'fuzzy matching', which uses algorithms to figure out if there is any relationship or similarity between different data elements.
"Fuzzy matching can be used to provide consumers with 'close enough' results," the publication explained," adding: "If a retailer doesn’t have exactly what the customer had in mind, both parties benefit from having the available options that are close to a shopper’s specifications."
For example, it could provide a recommendation for a jacket that is three-quarter sleeved instead of wrist length, but is in the right size, colour and style. Such options could be particularly useful in the holiday season, where gift-buyers may not have a perfect idea of what they want and could be searching for different products than what they would usually purchase.
The right inventory
Having the right products on hand will also be essential during the holiday period. With time a factor, customers won't wait for out-of-stock goods to be replenished, but will quickly go elsewhere. Therefore, using big data tools to forecast demand and ensure the most popular items are on hand with be crucial.
"Today, big data crunches variables like weather, trending topics, promotional outcomes, and so much more," Smart Data Collective said. "With predictive analytics, retailers can spend less money holding stale inventory and more time selling product."