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Big Data Big Opportunity

Big Data Big Opportunity

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Published by Infosys
This paper explores the current state of the retail industry and discusses how Big Data is a fast becoming the solution retailers can
adopt to maximize revenue.
This paper explores the current state of the retail industry and discusses how Big Data is a fast becoming the solution retailers can
adopt to maximize revenue.

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Published by: Infosys on Sep 09, 2013
Copyright:Attribution Non-commercial


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Harnessing the Power of Big Data
Big Opportunity for Retailers to Win Customers
- Srinivasan. N, Rajeev Nayar 
Retailers generate large volumes of data across their supply chain and at various customer touch points across omni-channel
operations. At the same time, the current digital customer and social media experience is feeding a massive data explosion.
The analysis of this huge volume of Big Data presents a sizeable opportunity for retailers. Leveraging advanced technologies to
understand this data, they can maximize the potential of these disruptive trends and win in the competitive marketplace.
This paper explores the current state of the retail industry and discusses how Big Data is a fast becoming the solution retailers can
adopt to maximize revenue. It explores the key pillars of Big Data along with its transformative opportunities and an adoption
roadmap for retailers.
The State of the Retail Industry:
Costs, Customers and the Digital Age
In a marketplace riddled with slow economic growth and high
costs, retailers are battling aggressively to increase their share
of the
wallet. Operating within tight single-digit
percentage margins, retailers are striving to improve efficiencies
and reduce costs. The rise of a new breed of digital customers
that wants convenience, personalization, and promotion-based
pricing has made winning in this environment even more
Disruptive trends associated with digital customers
such as
e-commerce, social media, and mobile commerce
have created
a wealth of data residing in emails, blogs, videos, phone calls,
and social network messages. Processing such voluminous and
diverse data sets to better understand customer behavior is a
tremendous challenge for companies. In the coming years, this
challenge will continue to grow as seen from recent studies.
 According to Gartner, the volume of data is set to grow 800%
over the next five years and 80% of it will reside as unstructured
. Another study by a leading research firm indicates a
30-fold increase in digital content over the past 10 years to
35 zetabytes with a 60% annual growth in data volume.
This explosion of data is both an opportunity and an asset
only if retailers can make sense of what it means. Retailers are
realizing that the power of Big Data cannot be harnessed using
usual database management tools. The retail industry requires
solutions that can help them access this customer and product
information, understand and play with the trends of customer 
behavior, and ensure their continued relevance and survival in a
highly competitive market. The solution needs to quickly gather 
and process this mass of data from multiple sources and draw
near real-time insights and analytics to enable quick decision-
making for generating true business value.
Earlier, retailers and customers connected at limited touch
points, usually brick-and-mortar stores. Retailers relied either 
on some kind of customer identification programs
such as
loyalty cards
or on the
physical presence within
the store to wield influence and provide information on
promotions and offers. Today, customers purchase products
across multiple channels such as mobile and web, use real-time
information through social media, customer forums and blogs,
and make purchase decisions through ratings, reviews, price
comparisons, and product recommendations. At all these touch
points and across all transactions, customers leave a trail of 
information about their preferences and behavior that retailers
can follow to find their way through the market. Retailers need
to gather, aggregate, process, and analyze such structured and
unstructured information to adopt customer-centric strategies
that help them engage customers.
Moreover, to ensure the success of such strategies and campaigns,
retailers need to access relevant customer information in real
time and deliver options to customers at the moment of truth.
Retailers need solutions that gather data residing in silos across
channels and apply advanced analytics to yield useful insights
and marketing intelligence. For instance, how can retailers run
a profitable one-to-one marketing campaign without eroding
margins? How can they ensure customer micro-segmentation
to provide relevant marketing messages to target customers?
How can they combine data from different sources
internal and
external to the organization such as social media and forums
to provide relevant recommendations to the shopper at crucial
purchasing moments?
The ability to process large volumes of data is a classic requirement.
For instance, retailers want to adopt a dynamic pricing model
where the cost of merchandise varies based on market conditions
and the
price. Such a model should track various
quantitative and qualitative measures to understand demand,
monitor the
pricing strategy, and generate an
appropriate real-time response on their stores and eCommerce
site. This requires the processing and analysis of large volumes of 
data, which existing systems are unable to handle.
Increasingly, retailers are driven to make real-time decisions
based on a large number of data points available in an instant.
For instance, the capability to make timely and relevant offers
o customers at crucial touch points to drive sales and ensure
customer loyalty. For large retailers with multiple channels and
Point of Sales (PoS) systems that handle millions of customers at a
single moment, such a capability requires simultaneous gathering
and processing of high velocity data.
Data types
which vary from structured information such
as customer demographics, basket data, and sales data to
unstructured text, audio, images, and video
can be analyzed
o provide useful information. Take, for example, a coffee retailer 
who wants information on global weather patterns to estimate
he supply of coffee beans to preserve margins, or a retailer who
wants to know about local events to predict and plan for future
demand of products. In both these cases, the analytics provided
can drive top-line and bottom-line growth. However, it involves
quick and timely processing of a variety of data sets. All enterprises
can now bring all possible data types and volume necessary for 
accurate and timely decisions into play with Big Data.
Conquering the Data Mountain for Customer Intimacy:
Problem and Opportunity

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