How Retailers Can Turn Big Data into Big Results|
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At a glance:
- The main takeaway: Big data revolutionized the retail industry, but most retailers shortchange their investment in data analytics by failing to implement a comprehensive digital strategy.
- Impact on your business: Without a coordinated digital transformation strategy, retailers end up with excessive data and limited insights.
- Next steps: Transform data into results by partnering with an advisor who can create a tailored digital transformation strategy unique to your needs and goals.
Maximize the return on your investment in big data with a strategic digital transformation. Aprio’s Digital Transformation Advisors can help.
The full story:
Saying big data is the future of the retail industry is almost cliché at this point – retailers have been feeling this shift for years. What this cliché doesn’t explain is how retailers should actually use big data to improve their business.
Ten years ago, the McKinsey Global Institute (MGI) predicted that retailers could increase their operating margins by more than 60% by embracing data analytics. However, despite the continued advancements in data and technology, few companies have achieved this level of growth (other than the big enterprises like Google and Amazon).
So what’s holding retailers back from fully realizing the benefits of big data?
In many cases, it comes down to poor implementation. Without a coordinated digital transformation strategy, retailers are simply generating infinite data without the tools or insights to enact change.
If you think data analytics can take your retail company to the next level, avoid the common pitfalls by asking yourself three key questions:
1. What can big data do for my business right now?
Big data may get its name from its expansiveness, but the real value lies in its versatility – especially within the retail industry. Current data analytics technology can help retailers understand customer behavior, monitor shopping trends, optimize customer service, and improve customer retention. Data insights can also support efforts related to customer segmentation, pricing analysis, supply chain management, demand forecasting, and more, which will help you run a better, more efficient business. Optimizations across any of these metrics with undoubtedly improve your bottom line.
Think about your current business challenges, and evaluate where additional insights could lead to better management decisions, which can grow your business or optimize your cost structures. Data analytics has tremendous potential to improve weaknesses in your business processes as well as the power to help identify future opportunities for growth.
2. What do I want to achieve with big data in the future?
Big data’s other valuable asset is its endless potential for advancement. E-commerce and other technology-driven changes within the retail industry have already generated radical change, but more innovation is always on the horizon. Current trends suggest that the next frontier for big data and retail will be revolutionizing the supply chain. Data already fuels technologies that can track real-time stock levels, analyze buying patterns, and automate warehouses to streamline the retail supply chain. In the future, predictive analytics, machine learning, and artificial intelligence will continue to optimize how retailers can use big data to make better decisions even faster with less human intervention.
These potential advantages of data analytics are reliant on an effective digital strategy for your current operations. Identify the long-term goals for your retail business, outline what you want to achieve and improve, and then tailor your digital technology strategy to support those goals. Perhaps the most important component of effectively harnessing the power of data is to ensure you are collecting the right data and managing it correctly to support your business goals.
3. How can I maximize my investment in big data?
Using big data to its full potential in a retail environment requires a sophisticated and strategized digital transformation. Organizations can quickly become overwhelmed when trying to prioritize big data efforts. Instead of trying to develop a large-scale digital strategy that encompasses every possible capability, focus on aligning your digital strategy to your business’s aspirations. Reduce the list of everything you could do to only what you should do, emphasizing only the most critical data analysis capabilities for improved outcomes. Anything that isn’t directly contributing to achieving your goals means you’ll be investing in expensive technologies that amass large quantities of data without actually generating actionable insights. Don’t shortchange your investment by underestimating what it takes to make big data work for your needs – digital transformation is not a one-size-fits-all solution.
The best way to maximize your investment in big data and digital transformation is to work with an advisor that can create a strategy tailored to your business’s needs while prioritizing your goals.
The bottom line
There is big potential in big data, especially for retailers. There is also a big misunderstanding around how to use data analytics effectively. Achieve better business outcomes by investing in more than data. Commit to a holistic digital strategy and transformation.
Aprio’s Digital Transformation & Cybersecurity Advisory team can help you understand your data, access additional data sources, and drive improvements across your enterprise and supply chain. With the right technologies and capabilities in place, you can manage risk, control costs, and drive revenue.