Hi-tech Retail Tolga Cengiz's post
Data driven retail experiences: Why retailers need an upgrade
SEP 24, 2015
Part 1 of 3
SMAC & Big Data Series
Almost 90% of US Sales in 2015 will be offline, yet 60% of US consumers combine their online and in-store shopping experiences.1
It’s no surprise that retail has changed with the emergence of:
-Availability of product information
-Use of mobile devices
Today consumers have more nuanced purchasing behaviors, compare prices online, consult reviews from strangers, and seek advice from friends and family through social media with 77% of individuals saying they are more likely to buy a new product when learning about it from friends and family.2
This complexity led to a convergence of two industries that previously had little in common – retail and information technology. Formerly, an IT firm would concentrate on back-office functions; today, they have made strides towards capturing and analyzing the needs of consumers and delivering those insights to retailers.
“While online behaviors are easier to capture, offline behaviors are unstructured, lacking the framework to be captured in standardized data models.”
Retailers are collecting large volumes of data across a variety of sources, structured or unstructured, but lack true analytics to garner predictions about future consumer behaviors. For example:
- Analyzing social media sentiment of a consumer to proactively provide customer service
-Analyzing mobile phone behavior (with consumer opt-in) to recommend products
-Capturing and analyzing in-store interactions of consumers to better train sales staff, enhance sales performance, and staff retention
Capturing consumer data has led to some pushback with 60% of consumers being more concerned about their privacy than they were a year ago and 89% of consumers avoiding companies they do not believe protect their privacy.3 While consumer privacy is of the utmost concern, retailers and IT firms must recognize that as long as consumer data is captured with their permission and anonymously analyzed, privacy concerns can be alleviated.
Lastly, retailers must be cognizant that consumers will seek incentives in order for the retailer to use this data. Meaning retailers must reward customers through personalized promotions or demonstrate value through product and service recommendations, as well as introduce time-saving features.
With all this data though, how are retailers supposed to connect the dots from the data they collect? In combination with a retail solution platform, which I will talk about in my next post, retailers will be more successful. The future of retail is here and while smarter and more price conscious consumers had initially worried retailers, the convergence of retail and IT to create smart retail will increase basket sizes and frequency of purchases for retailers who best understand consumers.
What data are you using?
Photo Credit: B2C
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