What Small Businesses Can Learn from How Retailers Use Big Data

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Sometimes the only way to survive in the business world is by adapting to the ever changing environment. With so much cutthroat competition, companies are eager to leap onto any new technology that promises to deliver them advantages that will propel them past their rivals. Big data is one such technological benefit that is already paying big dividends for those who have adopted it. Small businesses are usually behind most large corporations when it comes to adopting new technologies, but even now, big data analytics are within their grasp. Before making the jump to big data, small businesses can learn from large retailers just how effective big data can be.

At the core of the adoption of big data is a desire to better understand customers and their behavior. Businesses have been doing this for decades, identifying a target audience and pursuing them through advertising campaigns geared to meet their needs. These marketing strategies worked for the most part, but they were designed from a limited set of data points. That has all changed now that big data has entered the marketplace. Companies now have the ability to collect data from a host of differing data points, and much of it has been driven by the proliferation of mobile technology, which generates 2.5 billion gigabytes of data every day. Think about how often people access the internet through smartphones, tablets, or their home computers. Companies, especially retailers, are harnessing that data to better connect with the customer.



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Big data is one of the main ways retailers are able to engage with customers. The data is collected based off of customer behavior both online and within brick and mortar stores. Online, retailers are able to record a customer’s online purchases and even what they do on social networks, while in a store, data can be collected on where the customer goes and what product he or she looks at. With new video camera technology, retailers may soon even be able to interpret facial reactions and add that to the body of data.

There is, of course, a big purpose behind all of this big data collection, and that’s to help make the shopping experience more personalized, thereby increasing the chance of better sales. A better connection with customers can also give a retailer a vital advantage over its competitors. Big data allows retailers to make special offers and incentives to customers on an individual basis. These more specifically targeted offers have a much higher rate of success than the traditional method.



Big-time retailers have been putting big data to use in several ways in the past few years. Target uses what they call “social sentiment data” to see how customers are reacting to ad campaigns on social networks. Kohl’s has successfully tested personalized offers, all done in real-time, where deals are sent directly to customers’ smartphones when they’re in the store. Macy’s use of big data analytics has led to a 10% increase in sales, and Sterling Jewelers took their own analysis of customer patterns and increased sales by 49% over the 2012-2013 holiday season. These examples show just how effective big data can be when used to even a fraction of its potential.

Though big data can be an incredibly useful tool, its benefits have largely been out of reach for small businesses until recently. The technology needed to properly collect and analyze big data was once simply too expensive for small businesses, but with some of the latest advances, many technologies are now more readily available. Flash array storage, for example, is much more affordable than several years ago when flash storage vs. hard drive wasn’t a reasonable option and provides businesses with the scalability and processing power needed for big data analytics. Small businesses can also learn from retailers’ examples by following the same big data adoption roadmap that many of them use. Steps along the roadmap include conducting a pilot run with a small portion of the business, enacting large-scale adoption, and making sure the growth of big data within the company is being properly managed.



The examples in big data implementation and customer engagement that retailers have shown can be extremely helpful for small businesses wanting to understand and utilize big data for their own enterprises. While there are many ways to use big data within a business, technological advances will help smaller companies mold it to suit their own purposes, bringing the more personalized customer experience to the local market.

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