You can’t make good decisions unless you have good information to support them. For instance, you can’t justify hiring new workers unless you know that orders are up or customer traffic is higher in your store. Data can also help you decide whether or not to accept credit cards or whether to cater more to your online customers as consumer shopping preferences evolve. What are some other ways that big data can influence your business?
Big Data May Influence Your Return or Refund Policy
Many companies have limited return policies or strict refund policies that dictate whether a customer may receive cash or store credit when a product is brought back after purchase. When determining how to handle a customer return, you should consider how much money you stand to lose if you honor the return compared to how much you stand to lose if you stick to your policy.
For instance, let’s say a customer comes to your customer service desk and says that he or she wants to return a hair dryer purchased last week. However, that person doesn’t have a receipt, or the receipt was clearly from another purchase. Let’s also say that the hair dryer retailed for $20. In such a scenario, you have to determine whether you stand to lose more than $20 in lost future sales either directly or through bad publicity.
If historical trends indicate that you stand to lose more than $20 by denying the return, you should do it even if it violates your policy. However, you can only make the right decision if you have the proper data and know how to analyse big data.
When and How Are Customers Most Likely to Make a Purchase?
One of the benefits of being an online retailer is that you don’t need as many people to operate it. Generally, customers can find items, order them and have them delivered without much help from an employee.
If you determine that most customers tend to buy online as opposed to in a physical storefront, it may be a better use of money to build your site and hire a live support staff to answer questions customers may have. However, if you find that customers like to go to your store to browse before making a purchase online, you may need to keep one or two stores open to avoid lost sales.
Even if customers like to browse and purchase products in your store, sales are not steady throughout the day. In retail, customers tend to shop early in the morning before work, during their lunch hour or later in the evening after returning home. Therefore, it may be better to have more staff on hand during those times to avoid paying employees when they aren’t needed.
Big Data Can Show You Which Products Make the Most Money
Using Excel reporting tools or other similar technology, you may be able to determine which products account for the majority of your profit. Ideally, you will push the products that bring in the most money while getting rid of those that don’t. In some cases, it may be a good idea to keep a core product while getting rid of certain options or accessories if they aren’t as popular. Business owners should also keep their eyes open for products that can act as loss leaders. These are items that don’t make a profit but increase foot traffic and overall sales volume, which can lead to opportunities to make money elsewhere.
Business owners should embrace big data and everything it can reveal about your company and your customers. Through the collection and analysis of the information provided to you by employees and customers, you can help keep your business profitable and even help it capture a larger share of the market.
