More than ever, retailers can plan inventory, stock, logistics, customer habits and expectations more accurately thanks to Big Data

It's no secret: increased data unlocks a wealth of customer information, and retailers have taken note.

In the case of physical stores, applying Big Data allows us to understand which products sell best to the habits and circuits that customers follow inside the stores thanks to IoT technologies. Real-time tracking of sales and inventory levels are used to predict future demand more effectively.

Since when talking about retail we are talking about omnichannel strategies, the management of online data - prior compliance with personal data regulations and rules - is crucial. All this taking into account that in Spain electronic commerce is consolidate as an alternative to traditional commerce with 55.2% of people who have purchased online in 2021, increasing 1.4 points compared to 2020.

Firstly, to support data strategies applied to retail, we must not lose sight of the abundance of devices; being able to collect information from all of them is central. Retailers must observe customer behavior and purchase history from their computers, mobile phones, tablets and other devices.

On the other hand, it must be taken into account that customers prefer personalized interactions and suggestions from relevant brands and companies instead of generic proposals. Knowing what the customer is looking for and their preferences allows companies to generate tailored messages in a context where customer acquisition costs are notoriously high and segmentation allows them to target those who are most likely to complete a purchase. 

Having access to customer data also allows organizations to view user journeys and identify where customers become confused about navigation and abandon the app or website. For example, autofilling personal information such as name, address, and phone number can significantly improve customer satisfaction and, consequently, sales revenue.

In the ever-changing world of retail, the ability to predict market changes and customer behavior is a game-changer. Based on the historical data collected, companies can make accurate predictions and determine how certain trends and events may affect customers. Knowing what your customer base wants and needs allows you to plan inventory and gain a competitive advantage. Proof of this is that the global giant Amazon has perfected the art of collecting and applying data and trends in its recommendations for users, making an empire of it.

Algorithms based on Big Data are increasingly making a difference here. For example, it is possible to know what customers buy in the event of a sudden change in weather conditions. An interesting case is the collaboration between Pantene, The Weather Channel and supermarket giant Walgreens, Pantene saw its sales skyrocket more than 10% in Walgreens stores through its data-driven 'haircast' project. With the help of forecast data from The Weather Channel, retailers could market select products based on seasonal changes and that week's weather forecast.

Using as much data information as possible helps retailers and supply chains address inventory issues and potential disruptions to improve customer satisfaction, brand loyalty, and revenue generation. The role of big data in retail is also to identify potential bottlenecks and find workarounds before they have a chance to become larger problems, saving costs from downtime and disruption.

Julio Cesar Blanco – November 22, 2022