Over the past decade, Big Data has been posing more questions than answers, but researchers and analysts believe that this could be reversed over the next decade.
The complexity doesn’t lie in capturing data but in unlocking the hidden value from regular transactional data. It could have widespread implications in a range of industries such as retail, manufacturing, banking ad pharmaceuticals, amongst others.
As tools and analytical frameworks evolve, global enterprises will eventually be capable of mining more and more relevant value, from the zillions of data points in their corporate systems in a timely fashion, without any potential legal liabilities.
Dynamics of retail industry
The retail industry is one of the few sectors globally, which is witnessing aggressive Big Data adoption, given the enormous value it can create for them. And that’s because the basis for driving growth in the retail industry is to deliver the right product at the right place, price and time. And of equal importance, consumer behavior across the globe including India is rapidly evolving and often fickle, and retailers need to respond appropriately and quickly.
Walmart, the world’s largest retailer, is already investing heavily in WalmartLabs and also acquired several start-ups with a clear emphasis on e-commerce, mobile applications, analytics and other applications, in a bid to take advantage of the Big Data wave.
Of all sectors, the global retail industry has faced the maximum impact of rapidly changing consumer behavior. And while shoppers look at various channels to buy goods at the lowest prices, retailers have scrambling to build suitable insights on this trend.
In India, many retailers have joined the multi-channel distribution option, but few have leveraged the customer data to their advantage, in terms of product offering or service differentiation, to stay ahead of the competition.
Cost-effectiveness is another important dynamic in Big Data adoption and many retailers here are not fully able to understand the cost implications, related to processing and analysing millions of records. The Pareto principle, which highlights that 80 per cent of sales come from 20 per cent of consumers, and it is far cheaper to retain an existing consumer, exposes the flaws in traditional cost optimisation processes.
Big data could be easily used to design customised loyalty programs, enhance the business generated through him and also provide superior value to the retailer. This would help improve the operating margins and profitability of the broader retail sector, which are the paramount concern amongst small and big players today.
Online retailers are adopting dynamic pricing algorithms, which alter prices by the second and to be the leader. Such algorithms make adjustments based on competitive strategies, customer interactions, inventory levels and margin considerations.
For instance, online shoppers visit various site before making a purchase decision in a split second, and insights from Big Data analysis could be an effective tool for portals to drive growth, going forward.
In contrast, brick and mortar retailers are trying every trick in the book to outsmart competition, including partly leveraging Big Data analytics, as well as their existing relationship with consumers.
Nevertheless, Indian retailers have only utilised a miniscule portion of Big Data and the relevant analytics, to improve operational efficiency on a day-to-day basis and understanding consumer behavior better. And with e-retail and multi-channel brick and mortar retail set to grow over the next few years, top management of organisations would need to plan suitable strategies to use Big Data effectively.
Summing up, Douglas Merrill, former CIO at Google, said, “With too little data, you won’t be able to make any conclusions, that you trust. With loads of data, you will find relationships that aren’t real, but Big data isn’t about bits, it’s about talent.”
(Ajay Modani is Cofounder & Country Head – India at Capillary Technologies, a cloud-based software solutions company).