With eCommerce now the dominant retail channel, consumer expectations regarding cost, choice and convenience are at an all-time high.
Indeed, according to PFS 2022 research, more than half (56 percent) of consumers are now more likely to purchase non-essential items online. Consumers of all generations have become very digitally savvy, and marketplaces like Amazon, with one-click and same-day delivery options, are raising the stakes even higher than before. According to PFS findings, 54 percent of consumers today prefer a variety of delivery options, with free delivery/shipping constituting the ultimate shopping experience for 66 percent of consumers. Never before has the retail landscape been so competitive, with many customers abandoning retailers if their ideal online experience is not met.
Fortunately, by operating online, brands are already on the right track to maintaining customer satisfaction. 42 percent of respondents believe they get a more personalised experience online than in stores because they get benefits like personalised recommendations and sizing predictions – which remains a key differentiator.
Here, we look at how retailers can use big data and how it can be used to drive online growth.
Big data and real-time inventory management
One of the most significant applications of big data is in inventory management, where it can reduce costs and improve efficiency while increasing customer satisfaction. With industry shortages wreaking havoc on the retail supply chain and effective stock management, anticipating customer needs and forecasting demand is more important than ever. With customers becoming more fickle, an out-of-stock item can be enough to not only lose a sale to a competitor now, but also potentially lose a future customer.
Real-time inventory management systems, in conjunction with big data, enable retailers to not only track but also notify them of stock levels, which is critical for maintaining customer loyalty. Monitoring stock levels in this manner and ensuring that new product is ordered accordingly not only eliminates the risk of disappointing customers and losing sales, but also provides the opportunity to identify purchasing trends. This is especially important during peak trading periods and seasonal holidays such as Christmas, Valentine’s Day, and summer (especially when it comes to sportswear), to ensure adequate preparation and inform promotional decisions.
By combining data from site purchases and searches, retailers can get a better picture of which items are in high demand, and thus which items and stock-keeping units (SKUs) they should reorder. Insights into product sizes and other variations can be especially useful, allowing retailers to maximise sales and profit margins by cutting losses on items that aren’t performing well and ensuring ample stock of those that are. Operating in this manner can save money on warehouse and logistics costs, reduce the amount of stock held, and possibly reduce returns.
Big data can also provide brands with transparency into where product shipments may be lagging and potential bottlenecks are occurring by delving deeper into the supply chain. When such information is shared with the customer, it can be extremely effective. Customers value being kept informed, and the more detail and personalization brands can offer, the better.
Leveraging data to inform and transform business processes
By using these insights, retailers can improve their current operations, leveraging data to determine which delivery options to provide, as well as return processes.
There is also a wealth of information that can be gathered from returns forms and other feedback streams, including contact centre engagements and even social media posts – the fulfilment operation can even inform the customer service function, and vice versa, if under one roof. Doing this will create a subliminal message with customers that their needs are being acknowledged, and efforts made to meet these.
Using big data, online brands can also add a layer of protection against payment fraud and strengthen other cybersecurity practices – protecting themselves and customers. By enabling real-time detection, analysis and collecting information based on previous purchases, retailers can trace repeat patterns to discern between legitimate and suspicious transactions.
A data-driven future
There is no denying that consumers have higher expectations of brands than ever before. With 20% of customers admitting to having no emotional connection to any retailer, those in the eCommerce space should put loyalty and the strategies required to harness it at the forefront of everything they do – using real-time big data to establish better relationships with their customers. With multiple delivery options and sophisticated personalisation services named as top priorities for today’s convenience-hungry customer, implementing these is critical to ensuring loyalty.