Retailers that have already adopted big data and found ways to deploy it correctly - prompting analysis with meaningful questions and checking the inflow of information for data quality - have started to see the payoff, according to NBC. Major retailers like Macy's have moved beyond the limitations of Excel Spreadsheets and deployed big data programs that enable IT experts to learn about the things that make their customers tick.
Unexpected correlations help retailers close sales
Since this transition took place, Macy's has seen its store sales increase 10 percent, the source adds, and it isn't the only major brand to recognize these kinds of improvements. David Dillon, the CEO of Kroger, refers to big data as the company's secret weapon, while Target has already leveraged deep analysis of customers' buying patterns to anticipate their next purchases.
"It can even cross-correlate buying behavior between home and garden sales," Jeff Kelly, the lead analyst at Wikibon, told the source.
Is data telling the truth?
With big data comes big responsibility. That is, companies that are leveraging analytics strategies must be certain that the information has been checked for data quality so it's not misleading.
Brick-and-mortar retailers might be chasing big data in order to keep up with leading online vendors like Amazon, but they should not rush into it, according to Forbes contributor John Webster. In a recent article for the source, Webster writes that while Amazon is known for its predictive analytics programs that make book recommendations based on individuals' preferences and past purchases, there are flaws that may lead customers astray.
Webster explains that he co-authored a book, called "Inescapable Data - Harnessing the Power of Convergence," that can be purchased on Amazon. However, it seems that the book-selling giant does not use an address management program because it credits the title to John G. Webster, a separate author. On top of that, the site recommends that readers who enjoyed the book purchase other books penned by the incorrect author, which focus on unrelated topics.
Amazon can afford to lose some customers because of inaccurate information because it is so large, Webster adds, but that may not be the case with smaller retailers.
Opportunities abound for data adopters
This isn't to say that there aren't vast opportunities available to businesses that invest in big data intelligently. It means they must focus on quality just as much as they consider quantity.
Sterling Jewelers is one example of a company that has managed to catch the leading edge of this trend and benefit, according to NBC. After it began harnessing customer data for analysis, the firm saw its holiday sales jump nearly 50 percent last year.
This is not an isolated event, according to IBM. The firm recently used predictive analytics to project upcoming trends and found that jewelry sales are expected to increase by 11 percent during the second quarter of the year.
Jewelry companies and other businesses in retail might find they can increase their revenue by delivering customer experiences that represent the best of in-person and online shopping. Patrons prefer great service, but are also looking for specialized recommendations that have been tailored to their unique needs and desires, according to ClickZ.
Online vendors might have been on the forefront of the personalization trend, but traditional retailers are now on their heels. Both groups are tapping into social media chatter, website metrics or search results and compiling unstructured information with contact data that's been stored in their consumer database systems. As long as this information is correct and accurate, retailers can then generate insights about customers that let them know when a person is ready to make a purchase (from a garden hose to water the backyard of her new house or a pair of pearl earrings to commemorate his parent's 50th wedding anniversary).