Big Data: Retail Savior or Slayer
September 10, 2012
TIME Business recently reported on Big Data in the article “Future of Retail: How Companies Can Employ Big Data to Create a Better Shopping Experience.”
According to the article, while Big Data is evidenced in a multitude of industries, it is highly noticed in the retail sector. Online stores like Amazon use the data they have collected from customers to create an individualized profile to recommend products that users may wish to buy based on the information gathered about products they have already purchased. A recent study found that Amazon reported 30 percent of sales were due to its recommendation engine.
Online retailers are not the only businesses utilizing Big Data to boost business. Traditional retailers are also turning to it in hopes of staying relevant. The article states:
“One company that hopes to give traditional retailers the kind of analytic tools available to ecommerce firms is RetailNext. The firm has developed a computer program that uses a store’s security cameras to give managers all kinds of information about how consumers interact with the store. Using this program, Retail Next can show exactly how many customers are in a given store at a time, which parts of the store they explore, which specific items customers spend a lot of time perusing — and which they do not. RetailNext can combine this information with other variables like staffing levels, weather, product assortment and placement to determine what does and doesn’t boost sales.”
Big Data certainly has the ability to rescue retail. However, the companies with honking data analytics systems may triumph. Who are the losers in the equation? Local stores in our opinion. Downtown Fairbanks, Alaska is a retail dead zone. Why? Ask a shop owner on Second Street.
Jasmine Ashton, September 10, 2012