Prescriptive data analytics rising to prominence in the retail sector - reportby
With statistics regularly citing consumers as less attentive and loyal, the retail sector is turning to next-generation data analytics tools in an attempt to glean a better understanding of what keeps people onside.
However, with the complexity of getting omnichannel customer interactions right, and the need to better analyse more structured and unstructured data in real-time, Frost & Sullivan states many retailers are already searching for more sophistication from their data analytics platforms.
In its latest research into big data and analytics, the research house highlights the recent proliferation of more descriptive, predictive and prescriptive analytics tools as proof that retailers are becoming increasingly intricate with the use of their consumer data.
“Dealing with channels as individual siloes will lead to inaccurate understanding of customers and ineffective decisions,” explains Frost & Sullivan ICT research analyst, Shuba Ramkumar. “Combining insights from assorted channels will provide a clearer picture of the overall business.”
The use of prescriptive data analytics is of particular interest, as many experts believe that prescriptive tools give retailers more choice in terms of actioning insight from consumer data, by recommending one or more courses of action – and showing the likely outcome of each decision.
"Prescriptive analytics is a type of predictive analytics," Lithium’s chief scientist, Michael Wu recently told Information Week, in explaining the technology. "It's basically when we need to prescribe an action, so the business decision-maker can take this information and act."
Partners HealthCare CIO, James Noga recently described prescriptive analytics as being like the third phase of “driving from one point to another”.
“Drivers once got maps to travel from one point to another — they basically figured it out themselves — then they went to predictive analytics to find the best route to get from point A to point B.
"Then as you get into prescriptive analytics, it actually tells you on the way real time, an accident has happened and reroutes you."
Frost & Sullivan’s research suggests prescriptive analytics will, in the near future, enable retailers to keep track of their business at a macro level and further their prospects at micro levels. However, the issue of data privacy and digital creepiness remains a potential barrier to success.
“Data analytics in retail involves the study of consumer behaviour by collecting data points when they shop online on their computers or mobiles or when they walk into a store,” Frost & Sullivan ICT lead consultant, Martin Hoff ter Heid states in the report.
“Sending customised offers or marketing messages related to their behaviour, though useful, can be discomfiting.”
Chris is Editor of MyCustomer. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News. He joined MyCustomer in 2014.