Most of the articles you read about leveraging big data for sales and marketing are directly relative to online retailers. Analytics platforms are used to capture data as buyers interact with the websites, digital ads, and gated content, and the data collected is used to determine things like who the buyers are, where they tend to find ads, and how they progress through online content. But big data isn’t just for e-commerce and online retailers. There are many ways in which brick and mortar retailers can cash in on the big data freight train. Here are a few examples.
Data Helps Optimize Store Layouts
Sensors placed throughout the store are used to capture data as people mill about. This data is useful for determining how customers navigate the displays and merchandise, make their way to and from key points within the store, and how long they tend to linger. That type of data is immensely useful for optimizing store layouts to keep people in stores longer, attract their attention to more merchandise and more expensive merchandise, and maximize profits at the point of sale (cash registers).
Data Helps Predict Trends
This fall, will people flock to burnt orange, rusty red, or earthy brown? During the holidays, will shoppers opt for inexpensive tablet computers or heartier laptops? Data helps stores stock up on items predicted to be trendy in the coming months, assuring retailers are well supplied and shoppers leave satisfied. Fiascos like Tickle Me Elmo shortages don’t actually help stores, contrary to conspiracy theorists. After all, it’s individuals selling laughing toys for thousands of dollars in profits, not the retailers. Retailers cash in nicely when millions of customers are forking out $20 apiece at the cash registers.
Data Helps Retailers Optimize Their Prices
Speaking of insane prices people are willing to pay for the latest trends, big data helps retailers find the sweet pricing point between “so low no one thinks it’s worth anything” and “so expensive nobody is willing to pay for it”. This sweet spot is harder to ascertain than you might imagine. Big data is used to help retailers maximize profit margins, as well. Retailers use it to find better pricing models, pricing levels, and ways to cut waste to boost profit margins.
Data Helps with Inventory Management
Inventory management is a tricky endeavor. Stores need to keep enough inventory to meet demand, but not so much that overstock affects their bottom line. Big data helps them find that ideal balance, even when circumstances are out of the ordinary.
For instance, when a hurricane like Matthew or Sandy is marching toward a particular city, it’s readily obvious that stores need more than their usual stock of batteries, flashlights, bread, and water. What wasn’t so obvious before big data is that shoppers tend to empty shelves of other items, too, such as strawberry Pop-Tarts. Not blueberry or chocolate or S’mores, but strawberry. Why people want strawberry Pop-Tarts to face a hurricane is anyone’s guess. Big data can only help stores be prepared with plenty on the shelves and in the stock rooms.
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