Why retail needs big data to boost customer experience

One sector that stands to see a lot of potential gains from taking advantage of the data available to it will be the retail industry, which can convert this information into usable insight to improve its performance with the right tools.

It was noted by chief executive officer of Fifth Quadrant Dr Catriona Wallace in an article for Business Spectator that using big data analytics to derive useful information from metrics such as customer feedback and internal operations is essential to the future success.

There are a wide range of tasks to which these details can be put. For instance, eBay uses data analytics to study the customer buying behavior of its 180 million active users and optimize searches to deliver more relevant results.

Meanwhile, department store Target also harnesses big data to focus on certain customer groups, with special offers and promotions based on what they have purchased in the past.

However, if businesses want to get on board with big data and reap all the benefits, there are a few basic requirements they need to understand. For starters, Dr Wallace observed organizations need to familiarize themselves with the technologies that will be needed to make a success of this, many of which may be new to companies making the leap to big data for the first time.

“You will hear a lot about Hadoop, Cassandra, Apache, Teradata, SAS and many others you will never have heard before. Navigating your way through the layers of big data applications may require external advice,” she stated.

As well as this, it will be important to have data scientists with the right knowledge to interpret big data results and ensure the right questions are being asked of the technology. Individuals with experience in both computer science and mathematical modelling will be invaluable, but these skilled personnel can often be hard to find, so businesses need to work hard to attract the top IT talent.

However, the most important step organizations need to take is to make sure their big data strategy is aligned with their business goals, while retailers will also have to formulate plans to solve some of the key challenges that come with the adoption of big data.

It was noted by Monetate that the sheer volume of data they have to deal with is the biggest challenge, cited by 46 percent of firms. More than three-quarters of companies also do not know how much of their data is structured and how much is unstructured – which can include information such as product reviews, images and social media comments.

Improved customer experience was revealed to be the main priority for many big data operations, with 29.6 percent of users seeking to boost their marketing and 20.4 percent planning to upgrade their ecommerce and multichannel selling capabilities.

Dr Wallace observed the current era is one where consumers hold a great deal of power. She said: “Rather than simply accepting whatever products, prices and conditions their local retailer can offer, they are using the weight of their numbers and technology to redefine the rules of engagement.”

As a result, it will be vital for organizations to be smarter in how they communicate and target their customer engagements more closely in order to cultivate positive relationships.