Big Data Is The Cornerstone For The Future Of Retail

By Christine Kern, contributing writer

Retailers need to harness the power of big data to increase their operating margins.

Big data is the cornerstone for the future of retail. Research found that a 10 percent increase in data accessibility can result in more than $65 million additional net income for a typical Fortune 1000 company. As retail becomes more personalized and technology driven, retailers will need to jump on board or risk falling behind.

Every second, humans are generating new data. On Google alone, users perform approximately 40,000 searches every second, each contributing to a more complete picture of the unique consumer.  With personal shoppers in the palm of consumers’ hands, photo recognition at the register, tailored physical ads, and virtual fitting rooms, the future of shopping will be driven by a series of data points that together create individual shopper profiles.

With the escalating amount of data now available to retailers, they need to lay the foundation for an integrated, highly-personalized shopping experience in this evolving landscape. But how?

One answer lies in big data analytics. Retailers who take advantage of big data analysis now, will be well equipped to compete with the innovators who are already integrating photo recognition and virtual reality in shopping experiences. In fact, it has been estimated that retailers who leverage the full power of big data could increase their operating margins by as much as 60%. However, less than 0.5% of all data is every analyzed and used. That won’t be sustainable as the industry becomes increasingly competitive.

Compiling data without analyzing it is worthless to retailers. The true value of the data lies in the ability to interpret it to create actionable insights. And according to an Edgell Knowledge Network report, State of the Industry Research Series: Big Data in Retail,:

• Forty-six percent of the 75+ senior retail leaders interviewed for the study say their greatest data management challenge is “handling data volume.”
• Thirty-four percent answered, “handling data variety.”
• Twenty percent said, “handling data velocity.”

The bottom line: Productivity is being smothered by a huge influx of information, preventing retailers from understanding your customers and delivering exactly what they demand.

As Innovative Retail Technologies reported, “Accessing real-time data becomes increasingly important in a world with a focus on dynamic websites, traffic evaluation and data analysis. The big data world is shifting from gathering data and slowly finding the value, to creating actionable insights out of data as it is collected. Leveraging data in real time is the most integral part of staying competitive in today’s business landscape.”

“One of the most impactful assets that businesses have today is the data they are able to collect about how their customers are interacting with their products and services,” says Bob Familiar, national practice director for BlueMetal. The Internet of Things provides the means by which you can collect this information in real time and provide meaningful data visualizations to derive transformative business insights.”