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You have most likely heard the buzz words “Big Data” and “Data Analytics”, but you may not know what it’s all about, and how it relates to you. Here are some insights about the process will help you to understand why companies invest so much time and so many resources into the ever-popular loyalty programme.
Have you recently come across an email in your inbox from your favourite cosmetic store, advertising a special offer for your favourite strawberry mouth wash and shower gel, and possibly also a variety of other products that you often purchase from that retailer? If this sounds familiar, you’ve experienced Big Data and Analytics.
But how does this all work? How do these retailers know which branch I frequent, and what products I regularly buy?
The answer is actually very simple, and starts with the loyalty card you signed up for, to start gathering points or discounts from the stores you visit most often. You would have completed a form giving the retailer your contact information – no harm there, particularly with the Consumer Protection Act’s Opt In policy, stipulating the need for your consent to receive marketing information from that particular store or chain. When paying for your goods at the till point, you swipe your loyalty card at the same time, which triggers the storing of your purchase preferences and spending habits.
The copious amounts of data stored on consumer spending habits is an example of Big Data.
One of the largest software companies in the world describes Big Data as “A term that describes a large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important. It’s what organizations do with the data that matters.”
Once retailers gather this information, it this then analysed to assist them in making better business decisions. One of those decisions is to improve their customers’ experience by using this data to perform targeted marketing, such as sending you their mailer on products that you’ve purchased previously that are now on special. The awareness of a discounted offer on something we would normally buy anyway and pay full price for, will very often encourage the customer to make sure they make their purchase during the promotional pricing period, and it might even encourage bulk purchasing, resulting in a positive ROI for the retailer. The graph below shows how Big Data Analytics have improved productivity and sales in various industries across the US.
Besides helping the retailer to know their customers better and improving their sales by offering more of what customers are looking for, Big Data also improves the consumer’s shopping experience. A larger sector of the market might feel afraid of this data storage; uneasy about the idea that someone is aware of what they’re buying and where they’re buying it from. However, this process is actually being put to good use, for the benefit of you – the consumer. Unless….unless, you’re on that low carb diet and you don’t think anybody knows when you buy a sugar-loaded chocolate bar. Well, think again, because… somebody now knows!