With over half (56%) of consumers most likely to purchase leisure or non-essential items online in 2022, the migration to online has moved far beyond a trend. Today, operating online in some capacity has become table stakes for retailers wanting to reach their customers – especially as 42% of consumers now agree they receive a more personalized experience online than in brick-and-mortar stores. Receiving benefits online from personalized recommendations and engraving to sizing predictions and photo reviews, such online offerings continue to be key differentiators – as does “big data”.
However, as the online channel continues to grow in popularity as the shopping platform of choice, these expectations – particularly surrounding cost, choice and convenience – will only continue to sky-rocket making the retail landscape more competitive than ever.
Luckily advances in technology and the availability of real-time consumer data online is rapidly transforming the way brands operate and respond to customer needs. Having access to such insights found within “big data” can actually help businesses replicate the personalized and friendly experience or service, traditionally associated with physical and smaller local stores, whilst also performing like a retail giant.
But what is “big data”?
A gamechanger for inventory management
Big data is the umbrella term describing the digital information that can be collected about consumers, businesses, and other entities. Retailers and brands can use such insight to better understand consumer behavior on a large scale. With raw material and labour shortages continuing to disrupt the retail supply chain, never has there been a greater need for effective stock management and accurate demand forecasting. This is just one area in which big data can assist.
Real-time inventory management systems, when used in conjunction with big data, can provide retailers with the ability to not only track, but notify retailers of stock volumes – something that is crucial when maintaining customer loyalty.
By keeping a close eye on stock levels, retailers and brands can ensure that new product is ordered before supplies are depleted, not only avoiding the risk of disappointing customers and losing sales, but also creating the opportunity to spot purchasing trends and behaviors. This is particularly important during periods of peak trading and seasonal events to ensure adequate preparation, and inform decisions made around promotions.
Spotting trends and managing demand
By combining data gathered from purchases made as well as from searches conducted on websites, retailers and brands can also create a clear picture of what items are in high demand, and therefore which items and stock-keeping units (SKUs) they should prioritize or reorder. Insights into particular colours, sizes and other variations of the products can also be gathered and provide retailers with the opportunity to maximize sales by focusing on the items that are seeing the most traction. Operating this way can reduce costs regarding warehouse and logistics costs, reducing the amount of stock held and possibly reducing returns.
Digging deeper into the supply chain and big data can also provide brands with transparency around where product shipments may be delayed and bottlenecks occurring. Such information, when effectively passed on to the customer can be the difference between a happy experience or one that sees negative feedback posted on a social forum.
Pointing retailers and brands in the right direction for success
By leveraging big data insights, retailers and brands can not only improve their current services, but also guide any future business decisions and overall direction. This includes determining which delivery options, including selecting the right delivery partner, to provide and ensure a variety of choice for the customer. This is especially important as 54% of consumers prefer to have a variety of delivery options, with free delivery/shipping making up the ultimate shopping experience for 66% of consumers.
Whilst it can be difficult to know where to start, there is a wealth of information that can be gathered from returns forms and various customer feedback streams. All these insights can be brought together to support future product development, order management and customer experience initiatives.
With 20% of customers claiming they do not feel any emotional connection to any retailer or brand at all, never has building and protecting customer loyalty been more important to success. Big data therefore needs to be at the core of any retail or eCommerce strategy. We are now operating in a fast-paced and saturated online marketplace and retailers that can use data to stay one step ahead will have the biggest impact.