Big Data: Why Retail Shall No More Play Guessing Games

In the past, many marketers' and retailers' conclusions were based only on secondary data, and this led to a shaky strategy: what kind of advertising will be successful? Will the new promo increase real sales? What does the target audience want, and how to keep their attention? Now, retailers can measure everything with sociological accuracy thanks to Big Data - systems that accumulate and process significant amounts of data.

Below, you'll find answers to eight questions about Big Data in retail.

1. What is Big Data?

These are systems that accumulate large amounts of data. Companies that work with Big Data strive to process data in such a way as to bring the maximum value to the beneficiary customer. Anyone can act as a beneficiary - government agencies, companies and their departments, or users of services.

The value of Big Data for marketing and retail is difficult to overestimate. For many years, these areas have been using tools and services that operate with big data. Here are the main ones:

• Social networks;
• Advertising networks and various products associated with them;
• ERP-systems - management of corporate resources;
• Systems with machine learning, the so-called neural networks;
• IT services and software modules that automate business;
• B2C solutions: recommendation systems, taxi services, search services and many others.

Large businesses have already realized the value of Big Data and have begun to independently collect data: enrich it, explore processing methods and obtain additional information.

2. Who can collect such data and in what volumes?

Anyone can collect data in any amount, as long as it does not violate local and international laws.

3. How legal is collecting the data?

There are always players who break the laws. This usually happens when the consequences of breaking the law are cheaper than the profits made. It's a normal system of checks and balances.

What about ethics and intrusion into consumer privacy?

Data collection and analysis technologies are significantly ahead of data protection technologies and legislative regulation in their development.

In today's world, you can't effectively protect your privacy - you can only practice digital hygiene to reduce the consequences of data collection about you.

4. How actively are Big Data mechanisms used in retail?

Potentially, Big Data technologies can be used almost everywhere:

• research the market, consumers and their behaviour;
• manage a portfolio of brands;
• increase sales;
• develop cross-category sales;
• target media campaigns;
• build long-term and successful loyalty programs.

These are not all areas of application. Do you want to train neural networks to create art, design, and memes? You're welcome!

5. What data can be used for promo?

Promotions and loyalty clubs are ideal tools for accumulating reliable, maximum valuable data about consumers. During the promotion, you can collect:

• data on the behaviour of users on the site, including unregistered ones;
• profiles of registered users: names, addresses, emails, social network profiles;
• data on purchases and consumer baskets.

The data accumulated in the promo is of great value. For example, they will be useful to build an offline-to-online strategy and bring a buyer to your online store. In this case, the steps are approximately the following: conduct a promotion - collect data about consumers - enrich with data from other systems - target your consumers in advertising networks.

6. What are the prospects for working with Big Data in online retail?

All market-leading online retailers are IT companies that specialize in collecting and processing big data. Business process automation helps online retailers scale better. And working with Big Data speeds up this process because it allows you to generate and test hypotheses faster, and iteratively improve business performance. Transaction costs are reduced, user experience is improved, and advertising effectiveness is increased.

7. Will it give something for offline development?

Of course, offline needs automation. Take a look at the Amazon Go experience – Big Data is indispensable there: the collection and processing of large amounts of data about user behaviour on the trading floor made it possible to fully automate the user experience. This is an amazing achievement that defines the development of the industry for ten years ahead.

In addition, Amazon Go stores accumulate huge amounts of data that were previously inaccessible and not analyzed: how the customers behave inside the store, how they choose goods, how they make a purchase decision, how they interact with other buyers and offline interfaces in the store - price tags, shelves, cash registers. How is the desire to buy related products born? All this data can be collected now. So Amazon gets a wide field for research and searches for a more effective business model. For example, even now offline they can apply the methodologies that are used in the development of IT solutions: active monitoring, small iterations, split tests, process continuity, and deep personalization.

After all, it’s great to know exactly who will visit the store, how these people behave, what habits and preferences they have, how best to design a trading floor and what assortment to present even before deciding to open a store.

8. What might a promo of the future, developed by Big Data specialists, look like?

The promotion will become invisible to the buyer. Both the consumer and the company will get the desired value seamlessly - without having to do anything, go anywhere, or even watch ads. At the same time, an enormous amount of data will be processed in automation systems to deliver the desired value to a specific person at the right time.

Visible ads will disappear in the future. This is clear now. But marketing tools will remain - and we are now closely monitoring the changes and adjusting our products to new technologies in real-time.

Learn more about Big Data solutions for ecommerce here.