Digital technologies have caused major disruptions in the retail environment. This started with the transition to e-commerce, then came mobile and now includes developing systems to unify the customer experience across channels. These changes are creating winners and losers, with the latter being those that don’t quickly embrace and leverage the new environment.
The Big Data revolution is the newest game changer. Retailers need to think strategically so that they can develop the ability to sift through enormous quantities of data, rapidly process it, generate insights, and then act on them, all in near real-time.
Information loses value with every passing minute. Learning about a competitors’ promotion or lack of inventory a day later, or even a few hours later, can be costly. Every hour that passes translates into a decrease in revenue. Amazon, for example, changes prices several times a day for certain products. If you’re trying to benchmark against them on a weekly or daily basis, your data is outdated. The relevance of data in this new world of e–retailing is measured in hours, if not in minutes.
Solutions to manage and leverage big data are already available. For example, the financial industry has stock-trading platforms which successfully analyzes huge volumes of data – historical and current, structured and unstructured (e.g., news feeds, weather etc.) – in real time, and uses rules to determine trading decisions. Retailers need to similarly find ways to review data and set up rules to immediately react to the real-time big data.
An important first step is to classify data based on its life value, and adopt relevant technology strategies. For example, while competitor pricing data needs to be processed in real-time, assortment can be processed weekly or monthly.
Retailers should then implement an event-driven architecture that connects the output of their analysis systems (e.g., price recommendations) with other systems, such as e-commerce and store point of sale (POS) systems in a timely, seamless manner. This automation frees up time so that pricing analysts and category managers can focus their energies on improving critical pricing strategies.
The winning retailers will be those who create systems based on the concept of time-relevant data, and then establish an event-driven system with their execution systems.
Ugam helps retailers succeed by helping with some big data solutions including dynamic pricing and assortment analysis. Contact us today to learn how you can start winning in the new environment.
Sridhar Sharma is a Chief Technology Officer at Ugam and is responsible for the technology roadmap and oversees the development of the company’s next generation insights platform and product portfolio. Sridhar stays busy trying to keep up with the energy levels of his two young boys, and enjoys going on long drives.