Big data ¦ It is the buzzword we all have been hearing for a while, but what does it mean and how can it help businesses?
Let’s start with the definition. Big data refers to huge volumes and types of valuable information that companies accumulate through cutting-edge technology. The data is acquired from both, internal (within your company) and external sources (customers, suppliers and the broader market). It can be structured, like information of customers’ purchasing from retailers, or unstructured, like internet search results.
Big data is rapidly changing how businesses used to interact with their customers. Every day you get oodles of data that reveals unseen sources of value. But, the thing about Big data is that regardless of how much data you have, all that matters in the end is how you uses it.
We have witnessed some big names like Amazon, Netflix, and Uber that are getting their feet wet with big data and benefiting their business in multiple ways, from refining their present offerings to launching new products. They are constantly working to unleash the undiscovered ways to keep their customers glued to their company ” but retailers have been striving to get several steps ahead of these digital properties.
Retailers have been keeping the pace of big data trends and leveraging the information of their customers. Besides offering a loyalty program, they are deriving new ways to give their fickle customers a personalized experience. Let’s get a peek into some of the case studies of leading retailers.
1. Delta Airlines Uses Big Data to Analyze Customer Sentiments
Delta, a leading airline, tracks the tweets of its travelers to discover how they react to upgrades, in-flight entertainment, delays, etc. For instance, when an irate customer tweets about his lost baggage before boarding his connecting flight, the airline take note of such negative tweet and redirects it to their support team. The team sends a representative for the help of such passengers. Not just they provide the passenger with information about his/her tracked luggage (assuring to deliver it once s/he leaves the plane), but also compensate the passenger’s inconvenience with a free first class air ticket. The customer tweets positive response like a happy camper that helps the airlines create a positive brand recognition.
2. Target Uses Behavioral Data to Target Pregnant Mothers
In 2012, the data scientists employed behavioral analytics in order to predict the changes occurring in the lives of their customers, like marriage, divorce, and pregnancy. Using data about the shopping habits of women, the retailer identified that women purchasing products like vitamin supplements, cotton balls, unscented lotion, and washcloths in bulk, are most likely to be pregnant. The results helped Target to send targeted promotions on products relevant to childbirth. The promotion caused a significant upsurge in the sales of Target’s baby products.
3. Costco Fortified the Customer Loyalty with Timely Notices
One of the most beloved big box retailer, Costco, tracks and meticulously records every purchase by every customer from the retailer. This is no news, but when the data this giant retailer has assembled could save you from getting ill, it becomes one.
A California fruit packing company notified Costco about the risk of Listeria contamination in the stone fruits, including peaches, plums, and nectarines sold at different grocery chains. Instead of sending out a general warning to the customers who shopped at Costco lately, the retailer used big data to alert specifically the buyers that purchased those certain fruits. It informed them via phone calls and followed up with letters.
Back in 2010, the company even contributed in helping the Centers for Disease Control distinguish the sickened population during a salmonella outbreak in 2010. Once again, the day was saved, thanks to Costco and big data!
4. Kohl uses big data to give personalized offers
The retail chain Kohl’s sent personalized promotions to user’s Smartphones when they step into the store. It monitors the browsing history of customers and passes on the offers as per their online searches. It was on shoppers whether to opt in for offers through their smartphones or not. Let’s say, if a shopper is lurking around the trousers department, the retailer will send his or her a coupon on the items s/he looked at but never bought.
Conforming to the idea that customers are more like to respond to an offer represented at the time of making a purchase, Kohl’s fairly increased its sales.
5. The Weather Channel Takes Advertising by Storm
If you think that The Weather Channel is all about forecasting weather, think again! The IBM acquired company has gone beyond the potential of other companies in its niche. It has been using its two data platforms, Weather FX and Location FX, to observe the weather’s effect on viewers’ emotions. Marketers capitalize on these predictive weather analytics to deliver their message, at the right moment and in a way that helps spur the targeted actions.
Pantene collaborated with the Weather Channel to benefit from its data. The retailer used data to predict when air humidity would reach its maximum, motivating women to look for a product that can manage their humidity-frizzed hair. Pantene also promoted location-specific ads offering free hair casts to help people determine how their flat, fried, or frizzy hair would look during the next 3 days. This increased the sales of Pantene’s advertised items escalate by 28%.
Don’t let Big Data creep out your customers
Big data is clearly a great power, but with great power comes great responsibility. Retailers – large and small “ are reaping the benefits of big data; they are working on using consumer’s information judiciously.
Yet! There is no denying the fact that big data analytics have allowed us to know much about somebody and that can be scary. It is the oracular responsibility of the retailers and other companies utilizing the big data to show their cards in order to allay the inescapable concerns. They should take all possible steps to prevent a data breach and stay transparent about the data they’re analyzing.
The Federal Trade Commission (FTC) has released its report, Start with Security, A Guide for Businesses: Lessons Learned from FTC Cases, to highlight the best practices to protect consumer’s data in constantly changing the digital environment. Moreover, consumers can also protect their own data by different practices like choosing a strong password, using a credit card or PayPal when shopping online, avoid opening phishing emails, just to mention a few.
What do you think? What big data is for you; a convenience or creepiness? Does it pose any threat to you? Do let us know what you think in the comments below!
