New study reveals big data trends in retailing
The 2014 Big Data in Retail Study, commissioned by 1010data and fielded by uSAMP, found that 96 percent of the respondents, all of them executives in retailing, think big data is important in keeping retailers competitive. Respondents said the areas where big data are most beneficial are in merchandising (53 percent) and marketing (48 percent), followed by store operations (42 percent), e-commerce (42 percent), supply chain (27 percent), finance (23 percent) and loss prevention (21 percent).
According to study organizers, 201 U.S. retail executives were interviewed across a range of retail sub-segments including grocery, drug, specialty, discount, department store, restaurant and hospitality. Most retail executives (62 percent) believe leading retailers will capitalize on big data's competitive advantage in the next five years. This was followed by 18 percent of executives who believe retail is already there and 15 percent who said that big data will reach its potential by the end of 2014.
Normally, studies commissioned by a company with vested interest in a given outcome should be skeptically viewed. 1010data, given it is cloud-based platform for big data discovery and data sharing, could possibly have an interest in a biased outcome in this study. However, the findings are in line with my own observations, for whatever that's worth to you.
Unlike many other technologies, retailers are adopting big data at a higher rate than their usual drag-feet adoption tendencies in the past. This is likely due to the fact that price pressures remain high and margins are increasingly pushed low. Indeed, if I'm surprised at anything in this report it is that big data's use in pricing was not pulled out specifically.
It is not surprising that 41 percent think sharing data with suppliers is or will be beneficial. Note however that there is no mention of sharing data with other retailers as this is a highly competitive market.
However, not all retailers are onboard with big data.
"Although nearly all executives believe that using Big Data is important if retailers want to remain competitive (38 percent said important, followed by 35 percent very important and 23 percent moderately important), many retailers do not conduct more tests to introduce a new product assortment, promotion, store format or other initiative because their resources are stretched too thin to dedicate time to testing (45 percent)," reads the statement to the press released by the study organizers. "Other key reasons include: retailers require better tools and processed to set up tests and analyse results (43 percent); tests are too expensive or cumbersome to execute with all of the data involved (38 percent) and gathering and organizing data from test results is too difficult (18 percent)."
- see the full report