How to enhance the shopper experience by leveraging big data analytics
There are two ways to enhance the retail shopper experience: make it convenient, or make it fun. Ideally, there should be a balance of both, but retailers can tip the scales one way or the other.
Big data can help retailers equalize both ends, but the industry is just beginning to realize how to do it. In particular, data can identify optimal product positioning to maximize store space, provide customers with better purchase suggestions and merge online and offline activity to create true omnichannel shopping opportunities. These improvements seduce shoppers into coming back and emptying their wallets.
Positioning products in store
Retailers have relied on point-of-sale data for years, which has helped them forecast which products to stock. Bill Hardgrave, a professor at Auburn University, said in a Supply Chain Digest article that most retailers have poor visibility into what's actually on their shelves. Inventory accuracy rates fall between 50 and 60 percent.
Hardgrave is a big proponent of using RFID tags to boost that figure. By employing such tags, retailers can see what's in store and what areas are hot spots of activity. Clothing stores with RFID can also see which items people are trying on but not buying. This indicates that the items look good on the shelves but are overall unsatisfactory. Combining RFID with other forms of data can generate substantial insights, though the technology has been slow to catch on, which makes analysis challenging.
An alternative method of cataloging shoppers' in-store behavior is to monitor their mobile activity. For instance, Walmart recently released the Savings Catcher program, which is integrated into the company's mobile application. According to Marketing Land, it lets shoppers compose a smart list of items and then helps them navigate through the store to the corresponding aisles. Walmart can use this to connect individual shopper data to personal accounts, leading to an omnichannel experience in store and online.
When it comes to tracking consumer data, retailers have many tools in their arsenal. As ATKearney reports, Macy's uses data it has been collecting for years, such as sell-through rates, out-of-stocks and price promotions. Now, the retailer is crunching big data to "analyze these data points at the product or SKU level at a particular time and location and then generate thousands of scenarios to gauge the probability of selling a particular product at a certain time and place — ultimately optimizing assortments by location, time and profitability."
That in-store data can also be conflated with online data including social media sentiment, web browsing patterns and advertising spending to predict which item is going to be a hit. Think, for instance, of a retailer trying to stock up on the hot toy of the holiday season before its competitors do.
If this, then that
When a customer walks in to a retail store, the retailer typically knows nothing about the person until a purchase is made. By convincing consumers to opt in for a retail application, though, the store can read the shopper's identity and preferences based on previous purchases and track their movements in-store. If a customer returns to a particular aisle or spends a long period examining a product, retailers can push deals to the users' phone to encourage a sale.
This presents an opportunity to sell additional items, a common practice online. If you browse Stephen King books on Amazon, then the next time you visit, the home page will be loaded with offers to download Salem's Lot on Kindle. This happens in the world of brick-and-mortar stores, too. An example is when supermarkets package graham crackers, marshmallows and chocolate bars together for s'mores around summer camping season. Retailers are just starting to analyze selling patterns and online data to suggest other items that shoppers are likely to buy, though customers might not be consciously aware of the connection.
All of these practices can help enhance the shopper experience, which might just give consumers a reason to visit their local retail store. That is, unless they're on the hunt for that special item that they can only get online.
Learn more about how to seize upon your retail data to create a seamless shopper marketing experience on the IBM Retail Solutions page.