Big Data: Driving retail strategy for the future

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Picture this: You go to a store looking for the electronics section and instead find clothes or search for today’s weather and find only yesterday’s forecast. Clearly these are not good experiences.

Today’s consumers are armed with mobile devices, informed like never before and are very social and vocal. At the core, there is a paradigm shift in their expectations. Today’s shoppers expect a consistent retail shopping experience regardless of the channel, which is what omni-channel retailing is all about.

Big data is a by-product of this paradigm shift. It is a result of all of the online social interactions and digital footprints that consumers leave behind. It is also fuel that enables retailers to understand what products their consumers want, what are they willing to pay and what information they seek in a manner that is consistent with their shopping journey – be it at the store, on a mobile device or on a desktop.

So how does big data impact a retailer’s omni-channel strategy? Big data is driving the need for retailers to design their strategies across three key pillars: know better, align better and respond better.

Know Better (Mind)

Consumers expect retailers to be more relevant with the products they offer, not only by offering competitive prices with appropriate service levels, but by offering the right product information during and after the shopping journey. To do this, retailers need to sense what consumers want not only from past transactional data, but by mining freely available online consumer signals like reviews, ratings, searches, social signals, and at the same time being aware of competitive offerings. Retail investment in this area needs to be able to uncover intelligence and insights at scale and in some cases for real-time applications.

Align Better (Soul)

In order to provide a true omni-channel experience, retailers need to also invest in renewing employee mindsets. They need to review and redesign how their businesses have been measured by taking a consumer-centric view instead of a channel-centric one. This may also entail changing organizational structures and incentives to create ones more aligned to support an omni-channel experience. Furthermore, big data insights will need to be shared across these new structures to drive relevance and consistent experiences to shoppers.

Respond Better (Heart)

When sensing and attempting to shape consumer demand, it is vital for a retailer to have the right investments in order to respond in a timely manner with the right offer within the consumer context. This entails investments in supply chain, merchandizing, marketing and product development.

Big data has a large impact on the omni-channel strategy of retailers—metaphorically across the mind, soul and heart of retail. There have been successes with certain use cases supporting an omni-channel reality and it will become mainstream in a couple of years—not if, but when.

That being said, retailers need to inform their strategic imperatives by being clear about what matters now to their consumer and what their organizational capability is to respond from a competitive standpoint. They will need to prioritize and get there a step at a time, with the above three tips being a good place to start.

Mihir Kittur
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January 23, 2015
Mihir Kittur

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