The Future of Retail: Big Data and Social Media Pave the Way
The retail landscape is changing at a fast pace. More and more consumers are shopping online rather than going to brick and mortar stores, and often that online shopping is happening on a mobile device rather than a typical desktop or laptop computer. With so much power in the hands of the consumer to find the best value from hundreds of retailers with the click of a button, retailers are having to turn away from the mass production, mass advertising, and mass selling that have characterized the last two hundred years.
In order to stand out, retailers must offer a personalized experience to customers. While some aspects of this still lie in the future, such as using 3D printing to produce pants en-masse uniquely tailored to each individual customer, social media and big data have already started the revolution.
What is big data, and what can it do for retailers? Big data is a buzzword that encommpases not only the massive amount of data being created today, but also multiple types of data, such as unstructured tweets or metadata. This data is being created at a rapid pace, and within it retailers can find insights regarding consumer interests, what influences a sale, customer satisfaction and even manufacturing and product innovation.
Social media has not only been a major contributor to big data but is one of the key tools retailers can use to provide that personalized experience we, as the consumer, are asking for. By combining social media data with other information, such as transactions, consumer data and market research, businesses can gain a deeper understanding of their target market, better target marketing campaigns and produce individualized landing pages and offers.
How would this work? Let’s say you visit a retailer’s web page on your laptop and check out a couple of pairs of shoes. You then hop onto Pinterest and start pinning clothes. Maybe you find a particular pair of shoes you like and make a comment about them on Twitter. If that retailer were using big data, it could identify you based on the Internet network you were using and then provide a customized landing page featuring those shoes you were crazy about.
Some Real Life Examples:
- HSE24, a home shopping network in Europe, used big data analytics to identify consumer complaints on social media and then used the data to address the problem.
- Macy’s used analytics to gain insights on how it could improve both its online and in-store shopping experience. Some of the changes Macy’s made included inventory-locating registers and a True Fit tool that helped shoppers to identify which style and size would be best for their individual body type.
- Brooks Brothers started using big data services, and through that noticed that a particular suit was selling faster than it could be stocked in the warehouse. The company realized they were overexposing that particular suit and started putting it further down in marketing materials, so it would stay stocked keeping customers happy.
With so many consumers moving online to complete transactions, it begs the question if brick and mortar stores will still have a purpose in the future. The answer is they will, but for a different purpose than they served before. While most transactions will take place online, physical stores will offer a social and a learning experience to the consumer. AT&T, for example, is working on redoing its stores to encourage communication between employees and customers and provide a more personalized experience. The new stores will feature learning tables where employees can explain the features of a new phone or teach customers how to use them. How will big data come into play? Big data can provide insights into the types of interactions consumers would like to have and whether they are having the best experience possible in-store.
We are still in the beginning of this big data revolution, but as these kinds of insights are made available to even the smallest of retailers via the cloud and big data, which offers big data analytics on demand, a highly personalized and data-centric shopping experience should become the norm in the not too distant future.
Author Bio: Gil Allouche is the Vice President of Marketing at Qubole. Gil began his marketing career as a product strategist at SAP while earning his MBA at Babson College and is a former software engineer.
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