How Data is Driving Disruptive Innovation in Online Retail
Updated: Feb 9, 2021
With the influx of predictive analysis and artificial intelligence in retail, data driven insights have enabled corporations to take far-sighted decisions, thus giving them a strong footing amongst the changing trends. There is not a single industry that has not been affected by this huge change in research trend. E-commerce, transportation, and travel were completely different industries a few years ago and the pace at which they have grown and changed is simply astounding.
Among all the industries that have been affected by data, retail has seen not only the highest amount but also a very high magnitude of disruption in the way they operate. Brick and mortar stores are shutting at a record pace and with the increase in automated processes, the job scenarios have also changed.
From Back to Front- Case Study
It is simply not possible to discuss e-commerce disruption without studying Amazon. While their expertise in embracing change and optimizing infrastructure has played a key role in their success and growth, some experts still argue that data has been their biggest asset in moving forward.
Amazon used long term sales data to establish to determine the rank of their products. Through their algorithm, they then use sales rank to inform product placement in search results. Finally, when shoppers conduct research, optimal results appear. This is a one-way thought which they have successfully managed to create a personalized shopping experience, which is not only very quick, also maximizes customer satisfaction.
Another important player you need to look out for is Zara. For traditional fashion labels, to keep up with the changing fashion trends is a difficult task. Not only do they have to push out new styles, they have to make sure all those styles are available in all their stores. While it takes months to achieve this, Zara has managed to compress this process to a period of 3 weeks.
They simply do it by keeping an eye on the local market. A recent Bloomberg article explained how Zara ships fresh styles to stores twice a week, depending on what’s selling and what’s stalling.
They are ahead of the curve by making sure they know their local customers.
Why is Bigdata your Game-Changer?
Crazy effective ideas begin with thorough business insights. When you know your consumer inside out, you can take a fair guess at what’s going to work and what isn’t. With a smart use of data in retail you can:
1. Enhance customer experience for maximum growth and loyalty
Customer centric strategies use behavior and preference driven data to personalize shopping experience of a customer to increase the average basket value and hike up the customer retention rate.
2. Make better-informed business decisions through integrated analytics
Hybrid data and information management services enable centralized data repositories which then provide a comprehensive view of the inventory, supply chain, store performance and deepen the understanding of the issues that need to be overcome.
3. Harness data to improve operational agility
Analytics and productivity go hand in hand. Data-driven insights about merchandising, supply chain and store operations help increase key price point advantage, promotional items per basket, optimise replenishment and improve employee engagement and productivity.
4. Mitigate or prevent adverse impacts through proactive insights
In store analyses reduce the possibilities of shrinkage and frauds by improving forecast accuracy, reducing inventory costs and lowering stock-out losses. It can also help increase product purchase at full price/full margin.