What is the impact of big data analytics in retail?
Retail marketing is now easier than ever, thanks to big data analytics. Big data helps retailers discover customer insights, opportunities for improvement, and risks to avoid. Here’s an overview of the impact of data analytics in retail.
Big data in retail can help you quickly discover your current position in the market and know what to do to keep customers happy.
To survive in the modern, hyper-competitive environment, data-driven retail is table stakes. You need to familiarize yourself with big data analytics and its benefits to make informed business decisions and stay ahead of the competition.
What is big data analytics in retail?
Customers generate lots of data for your business. Every day, customers visit your website or social platforms, open emails, make online purchases or even visit your online stores. Each of these interactions with your brand creates data.
Big data is a combination of all the customer data from multiple sources in your business. When you can collect this data and combine it into an easy-to-understand single customer view, you’re well positioned to perform big data analytics—or the process of using data to discover patterns, trends, and any other information which could be helpful to your business.
Customer Data Platforms (CDPs) work by collecting this data from every source and retail data system you have access to, organizing it, cleaning it, and analyzing it to produce the most accurate and timely results. The benefits of collecting customer data cannot be overstated; brands and retailers who’ve done so successfully are running laps around their competitors.
The impact of data analytics in retail: 4 benefits
Big data analytics can have a positive impact on your business when used well. Here are the main benefits of collecting and analyzing customer data for your retail business:
1. Enhances the relevancy and personalization of your marketing.
We live in a customer-centric world where customers expect retailers to provide seamless, personalized customer experiences no matter where, how, or with whom they shop.
Customer data analytics allows you to know your customers better. Customer insights tools help you understand the needs of each customer. Here are a few things that big data analytics can help you know about your customers:
- Their product interests
- Their favorite shopping channels
- Their web and mobile browsing activities
- Their demographics and lifestyles
- Their most likely next purchases
- Their likelihood of churning
With this information, you can perform advanced customer segmentation to target specific audiences and personalize your communications. Relevant, personalized shopping experiences provide boost customer engagement to improve customer retention metrics across the board.
2. Increases profits and customer loyalty.
Customers can get what they want online with just one click—and their motivation to choose you over a competitor is dependent on the customer experience you offer.
Therefore, retaining, upselling, and cross-selling your current customer base is the quickest path toward revenue growth. Data analytics gives you the ability to better understand your customers, make predictions about their future behaviors, and satisfy their needs with relevant communications and offers. This helps you turn one-time buyers into two-time buyers and repeat buyers into long-term brand evangelists.
Plus, happy customers tell their friends, fuelling further revenue growth in the future.
3. Improves collaboration between your teams.
Collaboration is the key to success for every team. Unfortunately, in many businesses, teams are still working in silos: different data systems, different processes, different cultures, and different customer knowledge. These silos lead to misalignment and poor customer experiences.
Retail data solutions like CDPs collect data from every channel and customer touchpoint and then organize that data into an all-in-one view. This streamlined, organized data acts as the “single source of truth” for every team, easily shared and understood by all.
Data analytics, therefore, allows all teams to come together over a shared understanding of the customer and stay aligned on company goals. Using the same dataset, they can develop insight-driven strategies that provide consistent and personalized experiences across every channel. This collaboration facilitates decision-making and promotes the business’s success.
4. Improves the efficiency and accuracy of your decision-making.
The decision-making process plays a vital role in the success of a retail business. From marketing to pricing to handling customer requests, every business activity should be well-planned to save costs, streamline operations, and improve the customer experience in retail.
Big data analytics helps retail businesses to make more informed decisions within a short time. With an easy-to-use data analytics tool like a CDP, you can quickly gain insight into your marketing performance and make smarter decisions based on real data (instead of your gut instinct). This helps you understand customer patterns and behaviors, segment customers based on shared characteristics, and make informed decisions to create seamless experiences at every touchpoint.
Choose the best retail-focused CDP vendor for data analytics
Most CDPs have data analytics capabilities, but not every CDP provides the same value and use cases. You need to carefully review your options to find the one that will make the most impact on your business. Click here to learn the 4 types of CDPs and the strengths and weaknesses of each.
Lexer is the Customer Data Platform of choice for leading brands like Quiksilver, Igloo, Nine West, Rip Curl, Supergoop!, and more. As the only CDP built for retail, we help the world’s most iconic brands drive incremental sales from improved customer engagement. Contact us for help on how to get started.