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Big data ‘will save’ physical retailers
Good use of big data analytics will be one of the key trends that helps bricks-and-mortar retailers compete more effectively with online competitors and ensure their future survival.
This is according to Cisco, which noted the emergence of new technology is creating opportunities to make the in-store experience more compelling. It stated this will be vital, as a recent survey by the group found that despite the threat posed by online shopping, 93 percent of products sold in the US are still bought in bricks-and-mortar stores.
One of the most important developments for businesses to ensure they can maintain this performance in the coming years will be customer analytics. Being able to evaluate consumers' activities to identify where improvements can be made is a central part of this, as is using the data to ensure backroom processes work efficiently.
Paul Schottmiller, senior partner for global retail and consumer products at Cisco Consulting Services, Internet Business Solutions Group (IBSG), said in a post in the firm's official blog: “Big data represents a convergence of emerging technologies that are creating vast new streams of information – along with the means to analyze them with near or real-time efficiency.”
He added research by IBSG estimates that retailers implementing these solutions in their retail locations could see a 54 percent gain in after tax profits.
For interacting with customers, Cisco noted 71 percent of individuals want more digital information in-store and data analytics can help make this more relevant and personalized.
“Price transparency, digital access to remote experts, and targeted offers, which they routinely get online, can be enhanced with big data and delivered in-store via mobile devices and interactive screens,” Mr Schottmiller continued.
Some retailers, such as Target, have already looked to help customers in this area with the use of in-store Wi-Fi so consumers can use their smartphones to get access to personalized information generated with the help of real-time analytics. Shoppers can even opt-in to in-store tracking in order to receive valuable and even more relevant interactions from a retailer.
However, it is not just improved direct consumer interactions where big data can help in a retail environment. Mr Schottmiller noted a range of sensors throughout the store can compile much richer data than in the past that can be used to inform all aspects of a firm's operations.
“These will anticipate where shoppers are going, what products need to be restocked and which customers need assistance to convert a sale,” he stated. A wide range of factors can be taken into account when analyzing this data, such as age, gender and their buying history. Advanced analytics can even study a person's behaviour and channel this into real-time, predictive actions while an individual is still in store.
In the backroom, big data can also be used to eliminate problems with inaccurate inventories, which can cause some items to go out of stock. Big data can monitor this much more closely and ensure that stock is replenished exactly when it is needed.
By analyzing when periods of high demand occur, it can even notify staff of predicted rushes, so they can open more checkouts to prevent shoppers having to wait longer than necessary.