In the retail world, the latest trend in big data analytics is collecting information from consumers at the point of sale. There's no need to use ethically dubious methods of mining data, such as snooping through social media accounts or buying data clusters from third parties - simply by collecting data from customers who make purchases willingly, companies can learn a lot. They can gather knowledge about where people live, how much they spend and what products they buy.
According to Business Insider, this trend has become more notable with the growth of analytics technology. As it gets easier to use cloud solutions and analytical tools for storing information and breaking it down, more retail companies are getting involved.
Peter McCoy, founder and president of software company Alluring Logic, says that stores can use all the data they're collecting in future marketing initiatives.
"Some big data companies call this level of personalization 'clientelling,'" McCoy told Business Insider. "We take in point-of-sale data, CRM info, and any other in-store data sets that brands gather. Our software builds individualized product suggestions based on all of this data and emails them to each customer."
One benefit of collecting information directly from consumers is the data quality. When people give their information directly to merchants, it's unlikely to be riddled with errors, and companies can know they're getting data they can trust in their future analytics endeavors.
What can they do with all this high-quality information?
Design floor plans
Vendors want to design their storefronts intelligently by putting related products close together. If customers enjoyed product X, they might also like product Y, and an optimal store layout can help steer them in the right direction. Data analysis can help retail executives figure out the right layouts to improve sales numbers.
Staff store locations
Merchants can also analyze data that will tell them which store locations are in the highest demand at which times, and that should will help them optimize their staffing decisions. Labor is a finite resource, and companies must be sure to put staff members in high-leverage positions where they're most needed.
Keeping products in stock
A retail company's worst nightmare is when a customer demands a product, but the store can't sell it because it's not in stock. Missed opportunities translate to dollars down the drain - but luckily, stores can use analytical tools to help them make better inventory decisions.
The possibilities are endless with data quality in retail. With more information, stores can make more profits.