“Big Data” is on the minds of retail execs who believe it’s key to helping them stay competitive, according to a recent study by1010data for which 201 retailers were interviewed across grocery, speciality, drug, discount and department store segments.
According to North Carolina-based SAS, a software and analysis company, big data is often used to “describe the exponential growth and availability of data, both structured and unstructured.” SAS says the value of large amounts of structured data is that it leads to more accurate analyses.
Some 96% of those surveyed said incorporating big data into their business operations is a must, but half of them admit doing so is a complex undertaking. The executives agreed that big data insights are most beneficial for merchandising (53%), followed closely by marketing (48%). They also said big data could be used to improve store operations, while also gaining efficiencies in supply chain and loss prevention.
"This study shows that while the retail sector is being impacted by Big Data today, there are still many more opportunities for retailers to use Big Data analytics to optimize demand forecasting, merchandising, promotions, and loyalty program management," said Sandy Steier, co-founder and CEO of 1010data. "When retailers truly embrace data discovery, they quickly move beyond intuition and guesswork and instead rely on data-driven decision."
Executives were asked their biggest obstacles to getting the reporting and analytics they need to make better data-driven business decisions. About 40% expressed the need for a “single version of the truth” because different users and various departments have different ways of measuring the business.
Another 38% said they lacked the ability to analyze data to a low enough level of detail to adequately assess daily transactions by customers. One in three surveyed said they had difficulty accessing and integrating the data.
The cost and/or complexity of implementing big data needs to come down, according to 42% of the execs surveyed. Another 30% said they need simplified Big Data solutions that are intuitive to business users.
ON-SHELF AVAILABILITY BENEFIT
One common big data application sought by the majority surveyed is using the analytics to improve on-shelf-availability — an $800 billion problem for retailers worldwide. Following is how the responses were to the on-shelf question:
• 66% said it can help reduce out-of-stocks that lead to lost sales;
• 50% said it can predict future demand and inform supply chain decisions;
• 47% said it reduces overstocks that negatively impact turns;
• 41% said it ensures product assortments are finely tuned to demand; and
• 29% said it enables alternative fulfillment means such as ship-to-store and ship-from-store.
BENEFITS OF SHARING
Next, the executives were asked about some of the specific retail analytical applications enabled by big data technology, and how those could benefit retailers. The first area of focus was the sharing of data and analytics between retailer and supplier.
A majority of the respondents (67%) indicated that the top benefit of data sharing was enabling suppliers to better forecast and meet consumer demand. One in two said sharing allows retailers to leverage suppliers’ category and product knowledge to improve their merchandising strategies and it also helps to strengthen partnerships with suppliers. About 40% said sharing helps retailers increase overall sales. Just 2% said they saw no benefit in sharing Big Data insights with their suppliers.