Last week, I stepped into my favorite retail store and saw a young boy at the juice shelf, looking at the array of soft drinks, the multiple flavors and the numerous brands, unable to make up his mind. The proverbial problem of plenty, I thought. As I awaited my turn at the billing counter, it struck me that retailers face a similar problem when it comes to their big data: too much data and uncertainty of which data to use.
Talking about big data, Wipro had commissioned the Economic Intelligence Unit (EIU) earlier in the year to study retailer response to big data. The results were a revelation: Only 46% of the respondents were confident that their analytical capabilities were on par with data volumes. Worse, only 36% believed they had a well-defined policy for analyzing the most valuable chunks of data. An even smaller percentage (30%) believed they were not consistently obtaining value from the data. Isn’t it ironic that retailers are inundated with data from every business operation from supply chain to sales and marketing, but are unable to fully leverage the huge opportunities this throws up despite the advancements in technology?
Another interesting aspect I noted in the report was the shift in priorities. Over the past two years, marketing and sales promotions were the key focus area of big data. For the next two years however, corporate strategy figures right on top of the priority list of retail CXOs. And rightfully so I think, considering that a whopping 78% of the respondents claimed positive economic return from investment in data analysis for strategy. I believe that big data analytics can provide answers to several strategic question retailers have such as:
- Where are we today? Where should we be in another five years? How do we get there?
- How do we move from reactive to proactive responses to market fluctuations?
- How do we build better customer relationships?
- How can our supply chains be made more responsive?
- What technologies do we need to adopt?
As retail big data gets bigger, I think separating the wheat from the chaff and finding the answers to the above questions will become that much more difficult. As retailers scramble to get their data management act together, I would like to put in a word of caution. Innovate and invest by all means, but engage the services of a domain and data analytics expert who will guide you through the maze of structured and unstructured data.
What is your advice to clients? How are you helping them deal with the data overload? Please leave a comment.