Are these the five biggest reasons retailers can't ignore Big Data captured in-store?by
Despite the fact that it could hold the key to the future of retail, many retailers are still everything from cautious to terrified when it comes to the concept of Big Data. According to PWC research, 62% of companies think Big Data could provide a competitive advantage for their business, but 58% feel that the ability to draw insights from it is a challenge.
From information captured through ecommerce, to conversations taking place across social media, technology companies are falling over themselves to offer solutions that can harness a more concrete profile of every single customer interaction. All of this data is captured outside of the store, but the ability to gain actionable insight does not stop just because you have managed to get a shopper to step over your threshold.
There are a multitude of reasons why retailers must build a strategy for managing their in-store data, but here are our top five:
1. Quite simply, the information holds the key to your customers
Extracting the right information from the data at your fingertips is an invaluable way for retailers to gain insight into both consumer behaviour and store performance. Identifying who is coming through the door, how long they browse for, which areas they linger in and whether they make a purchase is vital in today’s competitive retail environment. Operationally it enables retailers to plan staffing and measure customer service while for marketers it evaluates which campaigns work and where marketing spend needs to be focused.
2. The information is there, but can you see it?
Imagine Customer A approaches your store, hesitates and then walks in. Is there a sales assistant there to greet them? Do they navigate around the store easily? Do they linger around specific promotions? Do they enter the changing room? Do they ever make it to the cash register? Did they use a promotional voucher? Did they tweet about you or post information about their purchase on Facebook after they leave the store? Did they make their next purchase online? These touchpoints happen with your customers every single day. Imagine if you knew all of this about Customer A the next time they walked through your door. How would you behave differently?
3. Technology analyses the data so you don’t have to
In fact, much of this technology exists and it will not be long before the vision above is a reality. According to analyst firm IDC, the amount of digital data in the world will double every two years between now and 2020. This already means that software tools analysing social media are in abundance.
Retailers have also invested money and resources into the latest data capture tools, from foot traffic counting to RFID tags, EPOS systems to Bluetooth tracking that enables them to understand the customer journey throughout the store. Only by bringing all of these data sources together however can they deliver actionable insight back to staff.
4. It’s only as complicated as you allow it to be
The key to getting the most out of your data is knowing exactly what it is that you want to achieve – otherwise you will waste time capturing and analysing data that doesn’t answer the core question for any retailer: what does the customer want? For example, if a shopper is prone to walking into your store and walking out again without making a purchase, retailers need to ask why. Is the merchandising the best it could be? Are there enough staff on duty? Is there enough stock on the shop floor? Marketing and operations teams don’t need to understand how to interrogate trillions of bytes of data, they just need to know what makes a useful and a useless piece of information so they can adapt their strategies accordingly.
5. You can predict how a customer might behave based on external factors
Crucially, Big Data is not simply about your own data but about external data sources that you can incorporate into your own analysis. Tesco is a pioneer in this. Its stock ordering system relies on weather data and customer behaviour modelling to predict demand across over 2,000 stores each week. The system uses five years’ worth of weather data, and data on every product, in every store, every day, meaning that the modelling is based on live sales data and the supply chain can be informed by what is happening on the shop floor. At city centre shopping mall, Liverpool One the team uses football match fixtures, traffic updates and bus timetables to anticipate foot traffic and thus staffing requirements throughout the centre.
Retailers need not fear Big Data. If anything, it is the biggest opportunity that has come along for some time to help the industry deliver what the customer wants, when they want it and via what channel. There are now technology companies that can provide a number of pieces to the jigsaw, such as offerings in store that track the whole customer journey, from the shop window to the final purchase. The key is to find the right technology partner to deliver the information retailers need in an accurate, consistent and reliable way to enable them to act on it to their advantage.
Bill McCarthy is CEO of EMEA at ShopperTrak.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.