Do you keep hearing phrases like ‘big data’, but have no idea what it means? It’s easy to get carried away with the hype without understanding how it can really impact your business. Yes, big data generally implies that there are large amounts of data, but it is only useful when the data is collected and analysed to provide insights.
Big data impacts all businesses regardless of which industry you are in, but in this post we will focus on the retail sector and how big data can help with a strategic decision.
Understanding Your Customers
All businesses regardless of their size generate some sort of data. If you have a website or a social media presence you can collect data on customers. This means that companies can choose to collect this data over time such as demographic data, economic indicators and purchasing habits to better understand customer behaviour. It can also help you create more effective marketing campaigns which are derived from an accurate understanding of the customer profile.
With the real time insights that big data can provide on what your customers are purchasing and who is buying what type of products and at what quantities, you can make more strategic decisions on existing products and future inventory or new product launches.
Big Data can also play a part in helping a business determine when to increase or decrease pricing. Prior to the emergence of big data most retailers would reduce prices towards the end of a buying season for a particular product.
However, with the ability to analyse and study data trends, it is possible to identify the time periods when a gradual decline in demand occurs which generally leads to increased revenues.
Improving The Bottom Line
With more access to business insights, including a better understanding of buyer behaviour, customer demands and efficiencies and inefficiencies, your business will be better able to plan budgets, reduce unnecessary costs and eventually increase profitability.
Big Data collects and centralises information from various business areas, whether it be from your sales department, your inventory, supply chain management or HR. By collating and analysing this information, you can then assess where you need to make changes to create more efficient processes and systems.