Careful resolution of privacy concerns vital to thrive in the European market
With an increasing number of retailers competing for customers’ attention and loyalty, it has become critical to understand and cater to consumers’ specific needs. This requirement has thrown the spotlight on big data analytics due to its ability to analyse large volumes of unstructured and structured data from a variety of sources. By offering valuable insights into customer behaviour, it is proving invaluable to retail businesses.
New analysis from Frost & Sullivan, Big Data in Retail, finds that analytics will be applied in front-end as well as back-end applications in retail. The aim of every retailer is to integrate data from multiple channels to provide an omni-channel experience for the customer.
“Omni-channel retail refers to the integration of all existing channels of customer contact to offer a seamless shopping experience,” said Frost & Sullivan ICT Research Analyst Shuba Ramkumar. “Dealing with channels as individual siloes will lead to inaccurate understanding of customers and ineffective decisions. Combining insights from assorted channels will provide a clearer picture of the overall business.”
Processing data real-time and using predictive modelling provide actionable insights that help acquire new customers and retain existing ones. In fact, the combination of descriptive, predictive and prescriptive analytics will enable retailers to keep track of their business at a macro level and further their prospects at the micro level.
While acknowledging the importance of analytics, retailers are also wary of the technological and organisational hurdles involved in implementation. Additionally, inherent issues of privacy violation and non-compliance with data regulations are highly relevant, especially in Europe.
“Data analytics in retail involves the study of consumer behaviour by collecting data points when they shop online on their computers or mobiles or when they walk into a store,” noted Frost & Sullivan ICT Lead Consultant Martin Hoff ter Heide, “Sending customised offers or marketing messages related to their behaviour, though useful, can be discomfiting.”
The challenge for retailers is to respect consumer privacy while making it worth their while to allow retail data monitoring. One way to get them interested is to roll out customer loyalty programs, such as the real-time generation of special offers when customers get in touch with contact centre.
There is considerable growth potential in the European markets, which are a mix of growing and nascent markets. While the United Kingdom, Germany and France are fast adopters, retailers in Southern and Eastern European countries are gradually acknowledging the value of analytics, signifying the growing acceptance of this tool in Europe.