Parker Avery has just published the Executive Summary of our latest research study “The Big Deal About Big Data,” and it’s full of interesting information that will ideally help retailers better understand how their own Big Data plans and challenges compare with their peers, as well as give them an understanding of where their initial Big Data efforts should be focused. We invite you to read the Executive Summary.
We will be publishing the full study within the next couple of weeks, so stay tuned.
On what may seem like an unrelated note, we’ve been discussing the phenomenon of “showrooming” both in this blog and on the Parker Avery Retail Leadership Forum on LinkedIn, as well as in other LinkedIn retail group discussions. Retailers are trying to figure out innovative ways of making showrooming work to their advantage (as they should), while at the same time enhancing the in-store shopping experience and providing value to their shoppers. These efforts absolutely should be aligned, and Big Data certainly plays a role.
Shoppers are increasingly using their smartphones and a myriad of apps to compare prices, read customer reviews, find additional product information and more, while physically in (or en route to) retail stores. It would be interesting and beneficial to understand exactly how customers are investigating different products and product types. For example, how are customers researching big-ticket items like flat screen TVs? Is this primarily done at home on a laptop or tablet (or dare we say, desktop?) so that the smaller mobile interface is not an issue? Is this usually done far in advance of the customer entering the store? I would venture to guess that most shoppers these days are doing a fair amount of investigating on their desired big-ticket items long before even entering the physical store. They are using the store to see, touch and feel the product only, and then will likely end up buying online. Unless, of course, the retailer can recognize this pattern and make an offer so compelling that the customer is persuaded to purchase the product in the store.
But what about less pricey, fast-moving items like shampoo, makeup, nutritional supplements, and specialty foods like gluten-free items? These may be less planned, more impulsive purchases, but many of today’s value-conscious customers still want to ensure they are getting a good product at the best price. So does research on these items begin and end while in the store? And if so, how can retailers capitalize on this to ensure the shopper buys the product from them?
As an example, let’s say my friend Christina is shopping at her favorite grocery store (let’s call it Hunter’s Market) and notices they have an entirely new line of gluten-free items, which is a high priority for her family’s nutritional needs. Gluten-free items are traditionally higher priced than regular products, so Christina wants to make sure they actually taste good and her kids are likely to eat them before she invests her hard earned money into this new line. Furthermore, she buys most of her gluten-free products at a high-end grocery store, which not only costs her extra money, but also means an extra shopping trip in her time-strapped schedule. So, Christina pulls out her smartphone and finds some reviews on these new items. If the reviews are good and the retailer’s price point is competitive to what she pays at the high-end grocery store, then she will likely buy these products from Hunter’s Market. Win-win. Christina gets new products her family is likely to eat and enjoy, it saves her an extra shopping trip, and her favorite grocer gets the sale (and increased loyalty from Christina, who incidentally is also very vocal on her social media networks and will likely tell all her gluten-free friends about her new find).
So let’s look at another twist on this scenario: What if the reviews were good on this new line, but the price point at Hunter’s Market was much higher? Does her favorite grocer just lose any chance of the sale? Shouldn’t this retailer know that their customers are seeking information of all sorts on the products they carry? Not only that their customers are doing this, but also – and more importantly – what information are they seeking on what products and how does this impact their purchase decisions? This represents tremendous insight into pricing, product assortment and product placement. This represents the use of Big Data.
Big Data will no doubt play a larger role as retailers come to grips with how to best use it and incorporate it into their retail models, while overcoming obstacles like inadequate technology and lack of organizational readiness. There is also the customer privacy issue that must be addressed with harnessing Big Data from customer mobile devices. However, if retailers are able to use these types of data to provide obvious value to their customers – in this case, saving my friend time and money – then everybody wins.
Shop on, Tricia.