Have you ever wondered how companies can afford to sell off their products at such low prices during the massive sales events, such as Black Friday or Cyber Monday? As you can suppose, none of their decisions is made randomly. To prepare for such events, retailers need to build a detailed pricing strategy, conduct customer segmentation and, most importantly, constantly collect the data on the purchases and customer engagement.
Here is how big data influences Black Friday and Cyber Monday.
How the Use of Data Changed over Time?
Retail has always relied heavily on big numbers. Traditionally, to prepare for the next season, stores focused on historical sales data to develop discounting strategies. If they saw that the sales could not beat the previous year’s digits, they would simply drop the prices. They would set the prices lower than those offered by their competitors, or address the needs of the consumers who could not afford their latest products by giving them huge discounts on the last-season models. Even though they still rely on these practices, the way retailers analyze their market and choose their prices has radically changed.
However, with the growth of advanced tech solutions, these businesses have taken some more intuitive factors and predictive approaches into consideration. With their help, forecasting trends and preparing for Black Friday or Cyber Monday is now based on making data-driven decisions rather than on a guessing game.
Assessing Buying Patterns
One of the biggest challenges for all retailers is the organization of inventory. Of course, massive sales are the most effective way for physical stores to manage excess stock in their inventory. In the past, when preparing for the next season, retailers took into consideration the variables like weather patterns, focusing on the items typical for a particular season. This way, they cleared the sales floor for a new collection and, at the same time, help their customers get the best deals.
However, today’s customers are different. They are tech-savvy, independent of any fashion rules and, most importantly, they invest a lot in their individuality. When preparing for Black Friday that will meet your customers‘ expectations, you need to conduct a deep target audience analysis. You should know what their preferences and buying habits are and, in this way, predict what is going to fly off the shelves.
The best way to do this is to see how a customer interacts with your brand by analyzing their engagement on your e-commerce website. Namely, the number of people shopping online is constantly rising. According to the 2016 stats, 1.61 billion people worldwide purchased goods online. Even those who haven’t switched to this form of shopping yet will look for items online before they visit a physical store. This is exactly why their website views, clicks, and researches should not go unnoticed.
Selecting the Price
In the case of massive sales events, such as Black Friday or Cyber Monday, pricing strategies require the combination of macroeconomic factors, historical purchase behavior, the popularity of a product and, of course, profit margins. With the help of sophisticated tech solutions, you will be able to analyze these aspects, identify the relationship between them and develop suitable price models. This way, you will determine whether a particular item at a certain price would draw the attention of a certain group of consumers.
For example, when gearing up for Black Friday, Amazon ranks the products based on available inventory, how their customers have engaged with them in the past, how these items fit into the current purchasing trends, and their similarity with the products sold during the previous Black Fridays. By collecting this information, they can not only set proper prices and offer the right products but also focus on some other aspects of this process, such as the number of seasonal workers they need to hire, the costs of hiring them, as well as estimating the revenue growth.
Delivering Omni-Channel Approach
In today’s era of hyperconnectivity, the lines between online and traditional shopping practices are fading. Even though the researches show that more than 85% of customers still prefer interacting with a brand in person, the truth is that the majority of them never make a purchase without doing a research online. Moreover, they use their mobiles in stores to compare the prices and make their buying decisions.
Therefore, in order to stay influential in your niche and attract more tech-savvy customers to your brick-and-mortar store, you need to provide them with the omnichannel experience. To make the most of this approach during the Black Friday or Cyber Monday, you need to invest in it gradually, throughout the whole year. For example, you need to have a perfectly optimized and mobile-friendly website, be active on social networks and use them to answer your customers‘ messages in real time.
Conclusions
Big Data plays a fundamental role in every industry. Even beyond these sales events, it helps retailers beat their competitors, build strong pricing strategies, optimize their deals and address their customers‘ expectations effectively.
