By Bill Peterson, Senior Director, Industry Solutions, MapR Technologies
It’s well known retailers who know their customers keep their customers. However, it’s much harder to grow and acquire loyal customers. With the shopper front and center and clearly in control, retailers need to apply what they know about their customers’ needs, wants, and behaviors to stay relevant. Understanding and winning customers in today’s competitive retail environment requires analyzing multiple layers of customer data. It is not enough to only know who your customers are and what they buy — you have to understand why she is shopping at your store.
Retailers are constantly finding innovative ways to gain insights from an increasing amount of structured and unstructured data about their customer’s habits. While customers are armed with better information such as online reviews from friends or peers, retailers have better access to data and technologies to keep up with customer demands.
Changing With Data And Technology
By applying the tools of Big Data and real-time analytics, retailers can deliver customized experiences that anticipate and reward customer behavior in a way that creates not only long-term bonds, but powerful word-of-mouth advocacy. We will see more personalized offers focused on individual purchase behavior tracked by loyalty programs. Loyalty-leading brands such as Amazon, Netflix, Starbucks, and Zappos are setting a baseline for customer loyalty built around unique experiences. Any retailer can now do the same with data and analytics.
Data analytics is being applied at nearly every stage in the retail process, from trending forecasting to inventory management to price optimization to recommendation. According to McKinsey, a retailer using data analytics to the full has the potential to increase its operating margin by up to 24 percent. For example, when a retailer uses technology that optimizes the store layout and inventory flow, and ensures proper floor coverage to better service shoppers already in-store, they can increase foot traffic and the conversion rate.
The Role Of AI
Successful retailers have been using predictive models to forecast demand and set prices for years. Retailers need to use AI and machine learning not just to predict how to stock stores or where to open new stores, but also to dynamically recommend products and set prices that appeal to individual shoppers. It’s like providing your customer a personal assistant who can anticipate all her needs and eliminate any friction in her shopping journey.
This level of prediction requires analyzing patterns at scale from massive data sets that are constantly changing. These data sets include consumers’ purchase histories, product preferences, competitor’s pricing, and current and anticipated product trends. This is where leading retailers are investing.
IoT Devices And Data Provide Value In Stores
More and more retailers are using IoT devices and in-store technologies to optimize the customer experience in their stores, making brick and mortar cool again. Sensors, such as RFID readers, beacons, Wi-Fi access points, and cameras are combined to understand a shopper’s movement throughout the store, distinguish associates from shoppers, and pinpoint the location of every item in the store. Combining these technologies into a holistic solution allows retailers to optimize their store layout, to understand where to place products for a better sight line, and to move through inventory more efficiently.
These solutions will be enhanced as retailers begin to connect their loyalty programs, CRM systems, and technologies like interactive signage and displays to the mix, allowing retailers to provide personalized offers based on shopper behavior.
Keeping The Customer In Focus
Retailers have always had plenty of data about their customers, but the point solutions of the past did not allow them to work data to their advantage. Different islands of data did not offer a holistic picture of the customer and could not deliver real-time insights.
As customer demands increase, retailers need to adopt evolving technologies to help customers find what they are looking for and complete the transaction in store or online. The experience should be seamless and authentic. This is the way you’ll close the sale and keep the customer.
About The Author
William “Bill” Peterson is Senior Director, Industry Solutions for MapR. Prior to MapR, Bill was the Director of Product and Solutions Marketing for CenturyLink. Prior to CenturyLink, Bill ran Product and Solutions Marketing for NetApp’s Analytics and Hadoop solutions. In addition to his marketing role at NetApp, Bill was the Marketing Co-Chair for the Analytics and Big Data committee, SNIA. Bill has also served as a research analyst at IDC and The Hurwitz Group, covering the operating environments, content management and business intelligence markets. Bill did his undergraduate work at Bentley University, and has completed MBA coursework at Suffolk University.