Big Data in retail business
For years, store owners always asked: “Among thousands of people who enter my store, who are good customers. And how much are they willing to pay?” Today especially during this Christmas, they have the answers by using technology as customers activities online or in store are being tracked and analyzed by Big Data technology.
It happens whether customers are on their computers, mobile devices, or standing in front of a store display. Every click on computer are being collected, every move in the store are being captured by video cameras then integrated with their mobile phone emitting signals and GPS tracking system to know where they are in the store. The information are analyzed with other personal information like income, address, bank account, and others to determine whether these people are good customer or not. (i.e.., Could they pay for what they like to buy.)
After several months of applying this technology, most store owners believe that Big data technology help them to develop special customize shopping experiences which lead to special deals for their customers and increase sales significantly. However some customers think aggressive tracking and advertising are often annoying.
A large retail store owner in New York told newspapers: “You cannot have big sale events any more without big data. Believe me, we know what customers want and what they can afford to buy since we have a lot of information about everybody who visit our stores or go on line. We do not need to advertise anymore, this is the next step in marketing and selling and it is very effective. Since we use Big data, our sale has increased 35% and our profit is reaching the highest mark ever. ”
Consumer tracking is not new. When stores asked customers to fill out warranty cards, they collected address to send advertised lists. Online stores used browser “cookies,” to track a customer’s movements across the Internet, to analyze what they want and present them with pop-up advertisings. However since last year, retailers began to use Big data technology to develop sophisticated ways to combine data that related to what customers want and their income for better approach to selling. They also used location-tracking technology as a means of attracting new customers and influencing customers as they walk into their stores. By knowing what customers want and offer them special prices, most stores close the sales quickly. A store owner explained: “We do not want any good customers to leave our store without buying anything. We do not want them to walk to another store and compare prices. By sending them messages to their mobile phone we entice customers with special deals that they cannot refuse.”
To further lure more customers into their stores, most retailers develop special mobile apps for their customers. If they walk pass their stores while their smartphones are turned on, they can receive special text messages that give them 20% to 50% price reduction on certain merchandises. By using Big data analysis, store owners can also collect data on which products attract the most attention. By combining video cameras and motion detection technology, they can track customer’s movement among the aisles and determine whether a customer spend more time looking at something special, by analyzing customer behavior, the software alert a sale person nearby or send a special message offering special price to promote certain products.
A Wall Street analyst predicts: “There are lots of potential uses of Big data to increase sales and in the next few years every store will apply this technology to promote sales. There will be no need for sales people, there will be no need for marketing people, there will be no need for advertising people but there will be a lot of needs for information technology people with Big data skills. Technologies do change everything.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
