Many of the biggest changes in retail are invisible for the
customers. They are more familiar with the new displays, new store formats, or
better in store service, but they are likely less aware of the innovations of
analytics. Analytics shape shoppers’ experience in ways that few can see. And
they are quickly becoming the key to retail’s future.
Two good examples will be Target and Walmart. Have you ever
wondered how Target knows what are you looking for every time you go to the
store? How did you receive coupons for things you want to purchase? Are they
good at guessing or do they have luck? Well, the answer is no. Target has some
methods to learn, track and take advantage of your personal shopping habits.
They can use your phone number, your smartphone, free Wi-Fi, credit cards, etc.
(Michael and Bread)
Target is a very savvy retail store. By using sophisticated
software, they can analyze and discover what you might buy in the future and
how they can be there for you. In the article “8 Ways Retailers Are Tracking
Your Every Move” by Paul Michael/Wise Bread you can read the example of a young
woman who was buying things that Target associates with an upcoming pregnancy.
So Target started sending circulars featuring a lot of maternity clothing and
baby furniture. Her parents did not why they were receiving that, until they
found out later that she was actually pregnant. Target knew about the baby
before the girl’s own parents did. (Bread, 2016)
Another strategy that Target uses to increase their sales and
offer a better customer experience is to use the technology in your smart
phone. Through a technique known as geofencing, Target knows about your
presence as soon you approach, enter, or browse the store. Also if you have an
app like Cartwheel installed on your phone, you may receive discounts coupons
or offers of stuff you usually buy at the store. (Bread, 2016)
Then we have Walmart, which is the world’s biggest retailer with
over 20,000 stores in 28 countries. They are in the process of building the
world’s largest private computing cloud. This cloud known as Data Cafe is going
process 2.5 petabytes of data every hour (Marr, 2017).
This technology will not use only large deposits of transactional data but also
information from other sources such as, meteorological data, economic data,
social media data, gas prices, and local events databases (Kern, 2017). By combining all
this data, Walmart will be able to predict outcomes and resolve complex business
questions that could take few weeks in just few minutes. As a result, what
customers will see at the stores shelves will be a better tailored for them and
it will lead to a better shopping experience overall. Naveen Peddamail, who
runs the Data Cafe said (Kern, 2017):
“If you can’t get
insights until you’ve analyzed your sales for a week or a month, then you’ve
lost sales within that time”.
He also provided the following example of how this cloud helps:
during Halloween, sales analysts were able to see in real-time that although a
particular novelty cookie was very popular in most stores, there were two
stores where it wasn’t selling at all. The alert allowed the situation to be
quickly investigated, and it was found that a simple stocking oversight had led
to the cookies not being put on the shelves. The company was able to then
rectify the situation immediately, avoiding further lost sales (McKendrick, 2017).