Monday, September 28, 2015

Using Big Data to Gain a Competitive Advantage in Retail

Here's a cool infographic about how retailers can use big data to gain a competitive advantage, now that competition has become more fierce with the ease of online price comparison services.

4 comments:

  1. Not to take anything from the power of Big Data in retail however I believe a more powerful force in the Grocery sector in particular will be solving the physical trip to the store. A shopping service that 'knows' what I want coupled to a service that magically knows to always deliver it when I'm at home, all without any interaction from me will be the killer solution.

    No shopping lists, no trips to the store, no walking around grocery isles - this is the end game.

    Walmart has been the Daddy of grocery Big Data for many decades so it is now interesting to see them running lots of experiments on the delivery and collection side:
    http://techcrunch.com/2015/09/28/walmart-announces-a-significant-expansion-of-its-online-grocery-shopping-service/

    It is clear that consumers are reacting: "Each subsequent launch of online grocery shopping, customer adoption has accelerated faster than in the previous market"

    Big Data is playing its part as well: "Over time, the technology will become more personalized to each customer by allowing grocery shoppers to make specific requests – like asking for a particular ripeness to a fruit."

    Walmart’s strategy is about hybrid e-commerce - where the digital and physical converge. I wonder if this is because it is the best solution for the consumer or because Walmart already has the bricks and mortar in place. Will Walmart be willing to radically reinvent itself as quickly as the market demands or be dragged down by its legacy model ? An Innovator's Dilemma in a Trillion dollar market.

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  2. Retail is an industry where firms have used data for decades by analyzing data from POS (point of sales) terminal or data from membership cards. The finding that there is a correlation between sales of baby diapers and sales of beer is a famous classic example in the data mining area. Now, retail companies are trying to achieve another kind of data, consumer behavior inside stores, using beacons (mainly Apple's iBeacon).

    Here are some interesting articles about beacons.
    http://www.wired.com/insights/2014/05/retails-next-big-bet-ibeacon-promise-geolocation-technologies/
    http://www.businessinsider.com/beacons-impact-billions-in-reail-sales-2015-2

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  3. Manikandan VijayaraghavanOctober 5, 2015 at 7:45 AM

    Big data, predictive analytics - very interesting and exciting concepts.. They can help us see patterns that are not often visible through traditional information slicing.. that said, one ought to be careful with patterns that might turn out to be misleading. It's high time that the retailers and marketplaces focused on building ecosystems like Amazon Prime (or) getting customer feedback via continuous small scale experimentation to obtain 'real' data and build shopping profiles. After all, data is only useful if it can be processed to become information.

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  4. Retail is one of the industries that big data analysis would create value the most. Firms active in this industry, starting from grocery stores to the companies like Amazon, traditionally have been using 'data analytics' with the data they have to organize the places of goods in the store by analysing the receipts of customers or to recommend new products according to the previous online purchases of specific customers. So, data analytics is at the heart of the retail industry independent of the size of the firm. However, amount of data to be analyzed became huge after the use of online systems gained prevalence. This change made it a challenge for the firms to analyze and organize this data. However, firms finding ways to effectively analyze big data are going to be able to see correlations on spendings of customers, manage their inventory effectively and foresee trends of customer needs better which creates a significant competitive advantage.

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