Big Data Can Mean Big Money for Retailers
Have you heard this story? A couple of MBA students were scoping out the local 24-hour convenience store and noticed an end cap that featured an odd pairing of products: diapers and beer. Huh? Turns out that someone crunched their customer behavior data deeply enough to figure out that when a bleary-eyed new father stumbles into the store late at night, diapers or beer were probably what he was after. By displaying these prominently on the front end of the aisles, the store was able to make the late-night shopper’s quarry easy to find.
If beer goes with diapers the way cookies go with milk, imagine what insights big data could bring to your business. Retail is right in the sweet spot to benefit most from big data projects. Some large retail organizations generate terabytes of data every minute. Inventory systems, loyalty cards, and sales transactions reveals exactly what was sold, when it was sold and what other items were rung up in the same purchase.
So Much Data, So Many Ways to Use it
What’s happening to that data now? Much of it gets stored, and later used for financial analyses of various sorts. Increasingly, other departments are starting to dip into the data for their own purposes.
Human Resources departments are using big data to determine how many sales associates and other personnel to have on hand, and when. Hiring and staffing patterns will become more precise, contributing to the bottom line.
Buyers are leveraging the data because with suppliers. The result? Fewer returns, fewer overstocks, fewer costly mistakes like all those leftover candy canes in the back of the shop months after the holiday season has come and gone.
Shelf placement is usually done by suppliers, but retailers can use the results of their big data analysis to help optimize that placement. Maybe those oversized boxes of laundry detergent ought to be on the middle shelf instead of the bottom. Better data means better sales and both buyers and suppliers will like that.
Big data tools can let help your marketing staff do better, faster research. In one store, they’ll put batteries on the end cap closest to the door. At another store that’s where the bathroom tissue goes. Who’s right? Who’s wrong? What about the beer and diapers? With the right data, you can take the guesswork out of it. And while we’re at it, take a look at which coupons are working best and which ones never move anything? The possibilities for tweaking are nearly endless.
So, What Do You Need to Make it Happen?
Most retailers are choosing open source Apache Hadoop software running on low cost, commodity hardware for their big data projects.
Setting up and operating a big data cluster can be an intimidating proposition for IT departments used to working with more traditional enterprise data center resources such as email, web, and database servers. Big data clusters are different animals. Fortunately, the market has responded by providing good deployment and management tools. With the right tools, any IT department can deploy and manage big data clusters with confidence, even if they’re never done it before.
Another benefit of working with a good vendor is that they are experts in the art of cluster management. You can draw on their years of experience, building and running clusters of all sizes. Chances are pretty good they’ve already seen and solved any problem you run across.
So, are you ready to take the big data plunge? Start out on the right foot, and pretty soon you’ll move from being a big data beginner to petabyte-crunching pioneer.
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