While big data has been making its presence felt across many sectors in the last couple of years, one area where it has great potential is in the retail space. With these businesses able to gather a large amount of information on their customers, such as their buying preferences, they can use this to ensure they are offering the products their customers want, at the most competitive prices.
However, there are several pitfalls that retailers need to avoid if they are to make big data analytics a success. In a recent piece for Internet Retailing, vice-president of EMEA sales at point-of-sale software supplier Vend John Coulston said it is easy to make simple errors that can lead to important information being ignored, or customer trust being lost.
Among the most common problems is ignoring the data that retailers already have. Many companies promote loyalty schemes that can be a great source of data on their customers' activities, yet do not make the most of it.
"Data should be collected with the chief intention of benefiting the customer – which in turn will benefit your business," Mr Coulston said. "For example, high street bakery Greggs does this well through its loyalty scheme, which collects customer data and then provides instant, targeted offers and rewards to shoppers through their mobile phones."
Retailers also need to ensure their employees are able to tap into these resources. This means not only training them on how to use big data analytics software, but educating them on what they can do to turn this insight into action.
For instance, Mr Coulston stated that training staff members in all areas to spot trends, such as what items are popular and often sold together, and empowering employees to look deeper at customer data can help create a more personal experience for shoppers. So if a regular customer walks into a shore, associates should be trained to check that customer’s purchase history or loyalty status so they can interact with them in the most relevant way.
Keeping this human touch will be vital if analytics programmes are to be a success. While technology can provide a wealth of information on individual customers, it shouldn't be used to replace the specialised knowledge and skills of retailers' best staff.
"Your analytics software may be able to tell you what’s selling and what’s not, but gathering insights first-hand about how your customers feel about your merchandise can only be done through qualitative data-gathering and communicating with shoppers," Mr Coulston said.
He also emphasised the importance of ensuring businesses are ethical in how they use data. "Getting customers to trust you with their information – from email addresses and birthdays, to purchase histories – is a significant responsibility, so be careful with it," the columnist said. "The last thing your business wants is to come off as untrustworthy, or have to deal with stolen data."