Business
How online brands can use big data to deliver a small business experience
Global Banking & Finance Review®
Company
By Kamran Iqbal, Commerce Strategist at PFS
With eCommerce now the dominant channel for retail, consumer expectations surrounding cost, choice and convenience are at an all-time high. According to PFS’ research, in 2022, over half (56%) of consumers are most likely to purchase leisure or non-essential items online, and this is showing no sign of slowing down. Consumers of all generations from Baby Boomers to Gen Z have become very digitally-savvy, and marketplaces such as Amazon – with the availability of one-click and same-day delivery offerings – are setting the table stakes higher than ever before. In fact, PFS findings has also revealed that 54% of consumers today prefer to have a variety of delivery options, with free delivery/shipping making up the ultimate shopping experience for 66% of consumers. Never has the retail landscape been so competitive, with many shoppers turning their backs on retailers and brands if their ideal online experience isn’t fulfilled.
By operating online, retailers and brands are already on the right track for keeping customers satisfied. 42% of respondents agree they receive a more personalised experience online than in brick-and-mortar shops/stores, as they receive benefits such as personalised recommendations, sizing predictions and photo reviews – which continues to be a key differentiator.
Here we explore how retailers can harness the power big data has to offer and the key areas it can be leveraged to drive further growth online.
Big data and real-time inventory management
One of the most impactful cases for big data is its ability to completely transform the current state of inventory management – reducing costs and improving efficiency whilst increasing customer satisfaction. With raw material and labour shortages continuing to take their toll on the retail supply chain and effective stock management, being able to anticipate customer needs and forecast demand has never been more important to ensure loyalty is retained. After all, with customers growing increasingly fickle, an out-of-stock item can be enough to not only miss out on a sale to a competitor on that occasion, but potentially lose out on a future customer.
Real-time inventory management systems work in conjunction with big data to provide retailers with the ability to not only track but notify retailers of stock volumes – something that is crucial when maintaining customer loyalty. Monitoring stock levels in this way and ensuring that new product is ordered before supplies are depleted, not only avoids the risk of disappointing customers and losing sales, but also creates the opportunity to spot purchasing trends and behaviours. This is particularly important during periods of peak trading and seasonal holidays such as Christmas, Valentine’s Day, and the summer (especially when it comes to sportswear), to ensure adequate preparation and inform decisions made around promotions.
By combining data gathered from purchases made and searches conducted on the site, retailers can create a clearer picture of what items are in high demand, and therefore which items and stock-keeping units (SKUs) they should prioritise or reorder. Insights into particular colours, sizes and other variations of the products can be particularly helpful and provides retailers with the opportunity to maximise sales and profit margins by cutting their losses on any items that aren’t performing well and ensuring ample stock of those that are. Operating this way can reduce costs regarding warehouse and logistics costs, reducing the amount of stock held and possibly reducing returns.
Digging deeper into the supply chain, big data can also provide brands with transparency around where product shipments may be lagging, and potential bottlenecks occurring. Such information, when effectively passed on to the customer can be extremely effective. Customers appreciate being kept informed, and the more detail and personalisation brands can provide on why there may be a holdup, the better.
Leveraging data to inform and transform business processes
By using the insights acquired from big data, retailers and brands can improve their current operation, including which delivery options to provide, ensuring a variety of choice including click and collect (in-store and designated collection points), subscription, free delivery, as well as return processes.
There is a wealth of information that can be gathered from customer returns forms and other feedback streams, including contact centre engagements and even social media posts – the fulfilment operation can even inform the customer service function, and vice versa, if under one roof. Doing this will create a subliminal message with customers that their needs and requests are being acknowledged, and efforts consciously made to meet these.
Using big data, online brands can also add a layer of protection against payment fraud and strengthen other cybersecurity practices – protecting themselves and customers. By enabling real-time detection, analysis and collecting customer information based on previous purchases, retailers and brands can trace repeat patterns to discern between legitimate and suspicious transactions.
A data-driven future
There is no denying that consumers expect more from retailers and brands than ever before. With 20% of customers admitting to not feeling any emotional connection to any retailer or brand at all, those operating in the eCommerce space should be placing loyalty and the strategies needed to harness it at the forefront of everything they do – using real-time big data to establish better relationships with their customers. With multiple delivery options and offering sophisticated personalisation services named as top priorities for today’s convenience-craving customer, implementation of these is essential to ensure loyalty is maintained.
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