Today, enterprises that manufacture products aimed directly at the consumer are experiencing change in the route that is taken for these products to reach their target market largely - because of technology.That technology is Big Data backed by analytics.
Developed markets are as usual, ahead in adopting this technology due to the better infrastructure available to them, but Indian industry is not completely unexposed to this seeping change. A recent study found that:
i. 44 per cent of Indian enterprises have already implemented a Big Data project;
ii. 36 per cent will implement atleast one Big Data project during the year, while at least 12 per cent have already implemented four Big Data projects.
Such statistics point the way to the future with renowned retailers such as Trent and Shopper’s Stop investing in Big Data. The same survey disclosed that the reasons for doing so were that respondents (19 per cent) expect higher revenue, better competitive positioning (14 per cent), provide new products and services (13 per cent) and, improved target marketing (22 per cent). All things considered, Big Data and analytics are starting to impact Indian enterprises and as result, retail in India is unlikely to be the same again.
Data driven retailing:
Retailing is set to be data-driven as never before. Big Data and analytics bring to the table critical customer and business insights through actionable insights, drive performance and fuel growth across all forms of retail platforms – stores, mobile shopping sites and e-commerce channels. This is important because in today’s connected world, customers look to having a seamless experience at their disposal, from physical stores to the online, digital shopping experience or even a mix and match of the two.
Reaching out to customers effectively means a presence across both these worlds, and this is optimally done by using insights gleaned through analytics that combs through Big Data. Collection, storage, organizing and analyzing customer data is critical and makes for personalized customer interaction and there is no better justification for this than the knowledge that 8 out of the 10 top global retailers and 18 out of the 20 top U.S. retailers use such technology!
What are the ways in which Indian retail can benefit - in the manner that the retail industry in the developed world is already doing – by using Big Data analytics?
Know your customer better
The first is about Customer knowledge, wherein Big Data helps
i. know your customer,
ii. their preferences with regard to brands and brand variants,
iii. mode of shopping,
iv. pricing choices,
v. when they shop –
all details that tell you about your customer’s shopping behaviour so as to enable you target them better.
Gain Customer Loyalty in this Ultra-Competitive Market
This brings us to the second way in which it helps, in gaining customer loyalty. Enabling customers to shop based on the knowledge acquired about their preferences helps you to serve them better and thus, garner customer loyalty. After all, this is precisely what the heart of retailing is all about!
Operations is the next front on which enterprises are helped through Big Data analytics. A knowledge of customer shopping behaviour and helping them find their choices better and more conveniently is all a very visible part of the exercise, but getting this is done means a huge back-end operations job that involves logistics, inventory, merchandising, time and space – none of which are visible but count for much. Having a product they like and where they want to buy it from means setting the supply chain in place from before a product gets to be made to making it available at a time and place where the knowledge of shopping behaviour allows retailing to make this happen best.
Going beyond these three benefits are a host of other issues, such as driving loyalty programmes, enabling digital wallets for purchase, tying shopping preferences with auxiliary products that could be of interest when buying trends and preferences are already known. There isn’t a single factor that cannot be touched by knowledge and data-driven insights when shopping occurs in the real-world.
In the world of retail, it is probably easier to find out what Big Data analytics does not impact, rather than what it does! With the omni-channel mode of retail here to stay, and the buyer becoming a connected consumer like never before, the explosion of social media and its role in impacting shopping preferences at the speed of light, it is not just enough to consider these changes and prepare for them, but also to match the pace at which it is doing so. Speed is of the essence and here technology can help to remove human intervention in the roll-out of the shopping experience, except where personalization demands it. Simply put, without Big Data analytics this is not possible; moreover, these together constitute a powerful competitive tool that the retail industry can ignore, but, only at its peril!
Authored By:Sunil Jose, Managing Director, Teradata India.