Retailers Hope Big Data Drives Big Holiday Sales

Here’s an interesting article from ZDNet  describing how big data analytics could affect the upcoming holiday sales:

http://www.zdnet.com/retailers-hope-big-data-drives-big-holiday-sales-7000007810/

Specifically, according to the article, the idea of retailers utilizing big data analytics to reveal crucial information about their consumer bases has recently become viable. There are many different ways that retailers are hoping to use big data analytics this holiday season. According to the article “Analytics that can handle enormous volumes of diverse data are being deployed to perform closed-loop analysis on a wide-range of activities, including effectiveness of marketing campaigns, customer on-line buying behavior, performance of sales promotions, social-commerce and inventory optimization.” I find the idea of analyzing online buying behavior to be particularly interesting. As time goes on, companies are gaining more and more ways to gain information about their potential customers. Companies are already able to purchase personal information from major search engines such as Google in order to better advertise to consumers and this new form of consumer analysis could simply be the next step in the same process. The detail involved in this analysis is also astounding. According to the article “These advanced analytics enable retailers to perform deep, precise customer segmentation by demographics, such as age and income, and psychographics such as interest and lifestyle profiles — segments which are then used to drive highly optimized and personalized offers and campaigns.” Being able to rapidly analyze consumer response to sales promotions and marketing campaigns could also be highly useful to retailers. By speeding up their reaction to consumer responses, they could be better able to maximize their profits by rapidly tailoring their sales and marketing initiatives to have the greatest appeal to the target demographic, helping them to maximize profits and minimize expenditures. The sheer speed of their potential response time is also impressive. According to the article “Big Data analytics make it possible for retailers to directly correlate consumer Web activity with promotions and marketing campaigns, and track resulting sales transactions.  And as a result, retailers can monitor and tweak promotions and campaigns in near real-time to maximize spend, increase profitability and generate revenue during this short, but critical period of time.” The implications of this diminished response time are particularly intriguing. The possibility of retailers being able to react, with such speed, to the consumers, is an interesting one that brings many questions to the forefront. How will this affect the experience of the consumer? Will this big data become widely utilized in retail or will only the largest and or the most innovative firms take notice at first? How will the increasing prominence of big data in retail affect the hiring patterns of retailers? One thing is fairly certain, however, big data analytics is about to have a large impact on the retail industry.

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

4 Responses to Retailers Hope Big Data Drives Big Holiday Sales

  1. cbaughma says:

    As I read your post, the first thing that came to mind was that big data analytics has found a way to eliminate the problem of item scarcity (as long as the item can be produced as quickly as it’s demanded). I remember about 12 years ago, the child toy, Furby was in high demand, so much so that stores everywhere were out of them, and they would not be getting anymore in before Christmas. People started getting desperate, and parents were willing to pay triple the cost for the now rare toy just to make their kid happy for the Holidays. Big data now has been able to provide a solution to problems like the Furby problem. The ability to track online searches can give companies insight into the products people are interested in purchasing for their loved ones. In result, they can develop their inventories ahead of time to ensure they have an ample amount of the product to provide before the Holidays. Big data can also give companies insight on helping them develop formulas to maximize profits and paint a picture of who exactly they should target their Holiday ads to (demographically speaking). Big data has done marvelous things to increase efficiencies across the world. I hope the trend continues.

  2. maddiegogo says:

    When it comes to big data and consumerism, I find it a bit creepy the amount of data retailers keep on their customers and also how crafty they are in targeting us with what they know about us. For my term paper for this class, I focused a lot on a recent situation a Target where the company started sending ads dealing with pregnancy (diapers, strollers, baby food, etc.) to a teenagers house. Her father called customer service very upset that they would send such ads to his daughter. However he later called to apologize saying that his daughter recently told him she was pregnant. Are we reaching the point where Target and other companies can know things about us before we even know them ourselves by studying our buying habits?

  3. kmcmeek says:

    I took SI 547 – Electronic Commerce last year and we learned about online systems such as Amazon. Much to my surprise it is truly shocking how much information companies can gather about you. Many then generate tailored ads to capture your interest. Believe it or not but consumers usually agree to this when accepting the terms and conditions on various sites and/or services. Personally I usually find myself skimming the agreement and simply accepting it. Although this is most likely not the best habit, I think it is safe to say that others do the same. For certain people, I can see them approving of these tailored ads and data collection methods because they would be presented with items relevant to them. I also think there are people who simply like to shop around and would become frustrated with the idea of tailored ads constantly being shown to them.

  4. caseylynn122 says:

    I read the same article that Maddie talked about when it came out over the summer. I thought it was really interesting about how Target reached the conclusion that one of their customers was pregnant based on buying things that aren’t usually immediately associated with pregnancy like unscented lotion. I wonder if there are many more cases where retail companies misjudge their consumers or if they are right the majority of the time.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s