n retail, the business that proactively predicts and responds to customer needs takes home the biggest slice of the pie. The industry sees cut-throat competition with players striving to set the right price point and predict trends in a bid to improve operational efficiency. Lying at the heart of such efforts is an efficient use of customer data, made possible by analytics surrounding product creation, distribution, and purchase. From tracking inventory to monitoring marketing campaigns, retail analytics enables marketers and salespeople to constantly deliver value and retain a competitive edge. This is especially important given that retailers today have access to large amounts of customer data which when untapped, can result in lost customers.
Modern retailers are already harnessing big data to understand customers and uncover hidden trends. They’re using real-time insights and contextual data to gain critical business intelligence required to create better customer experiences and make informed decisions in complex business scenarios. Here is how analytics in retail will prove to be a game-changer for the industry in the near future.
Improved Omni-Channel Experiences
Because customer data is no longer limited to a particular channel, retailers can obtain essential information through multiple resources including web, social and traditional media. Thanks to the popularity of mobile and social media, customers are interacting with brands in ways vastly different from traditional ones. While this could present an obstacle in delivering a uniform experience across numerous channels, it presents an undeniable opportunity for retailers to tap into a large amount of vital data. With big data analytics, retailers will be able to leverage the true potential of such data to empower all channels to act on the same customer information. Sample this: Amazon Go’s store in Seattle merges the brick-and-mortar shopping experience with technology so seamlessly that shoppers can leave the store without making a transaction at the checkout counter. This is how fluid the retail environment of the future will be - combining online, mobile, and physical to create an omni-channel experience for customers.
Personalized Customer Experience
Imagine a retailer sending out a discount notification right when a prospective buyer is heading to a competitor; locking in a definite purchase. Using customer behavior data, retailers will be able to offer such personalized customer experiences. With analytics, retailers can analyze customer behavior in the store and measure the impact of merchandising and marketing efforts. Using a data engineering platform like Cloudera, retailers can personalize the in-store experience with loyalty apps, discounts and other offers to drive sales across all channels. They will also be able to test the impact of different marketing strategies and use a customer’s purchase and browsing history to identify needs, ultimately personalizing their journey. Data engineering can turn in-store customer data sources into a major competitive advantage for retailers, providing insights to drive cross-selling and increase marketing effectiveness. Retailers can gather such insights from a wealth of sources – POS systems, websites, mobile apps, sensors, cameras etc.
The IoT Intervention
The Internet of Things (IoT) is emerging as a game-changer for retailers, helping them creating an unparalleled repository of customer behavior and interaction information. The IoT movement will empower retailers to boost the customer experience by leveraging data collected through connected devices and wearable technologies. Modern retailers would arm their stores with sensors that detect app installation on customers’ mobile devices. Communicating with location sensors, apps would deliver offers and incentives, introducing new products that a customer is likely to be interested in. From a business point of view, IoT would help retailers drive operational efficiencies through a web of connected devices that tracks inventory, adjusts prices, offers personalized recommendations etc. Indeed, it isn’t hard to visualize a scenario where customers walk into a store and get personalized notifications regarding discounts on their phone or the exact location of a product they are interested in buying. In this way, IoT will also boost the omni-channel customer experience.
Retailers of the future will make use of sensors, beacons, and mobile apps to locate customers and analyze their behavior. This will allow them to customize their offerings based on context, instead of advertising random products to the masses. Using the power of data, retailers will be able to offer targeted product recommendations based on purchase history, viewing history, current seasonal trends, and product combinations that can be unearthed with data mining and machine learning. This real-time correlation and analytics will result in intelligent recommendations that are more likely to convert to a purchase compared to generic recommendations that lack context. Analytics will also help retailers identify the most attractive products and send relevant offers when customers are in close proximity to the shop, using data such as age, interest, purchase history to push them. Simultaneously, this will allow for more collection of data and advanced statistics to refine business strategies.
The Future of Analytics in Retail
Data-driven customer insights will gain even more importance for improving conversion rates, personalizing campaigns, predicting customer churn, and lowering acquisition costs. In the future, customer interaction through multiple touch points will only increase, affecting how retailers analyze data from multiple sources.
By analyzing this data, retailers will uncover truly cutting-edge insights - customer motivations, tendencies, behaviors – to ultimately refine marketing strategies and drive customer loyalty. In the future of retail, analytics will assume an even greater importance to improving the customer experience, enhancing business processes, and eventually increasing revenue.