Big Data Applications in Retail

Instructor: Kaitlin Oglesby
For companies looking to maximize their sales, big data can offer the opportunity to gain valuable insights into not only consumer buying habits, but also make sure that the product supply chain is functioning at its highest levels.

Big Data in Retail

For retailers dealing in a more and more uncertain business world, big data in retail has some shockingly useful applications. Big data in retail refers to the ability of retailers to use massive amounts of information to draw previously unknown conclusions. While the sheer size of big data may be a bit off-putting to smaller companies, the fact is that shops of almost every size have something to gain by analyzing big data. In this lesson, we'll not only see how companies are using big data to better choose products and work with suppliers, but also how it is affecting prices and added value, creating a better experience for the customer and higher profits for the retailer.

Choosing Products

A common issue that all retailers have is a lack of sales space. In fact, some retailers, such as grocery stores, sell suppliers the rights to set up their displays in prominent locations. This is why there are often chips and soft drinks at the end caps of supermarket aisles. However, even for online retailers, space for inventory is an issue. Any data that could help companies better predict what products will sell means that they can focus on those goods instead of those that will simply sit on the shelf.

Big data lets retailers do just that. In the past, a few general assumptions could be made. For example, heavy coats and turkeys both sell well in November. However, big data has allowed even more intricate connections to be made. Take school supplies, for example. It does not take big data to indicate that school supplies sell best in August. However, it does take big data to indicate that many elementary school students will need a new pack of crayons at some point in the year, and to show retailers when that some point of the year is so that they can make sure to have plenty in stock.

Working with Suppliers

Smart retailers know that suppliers are ultimately some of their best partners. After all, if a supplier's products are selling, that is good for the retailer! One way that suppliers and retailers are starting to use big data to benefit both of them is best shown by the world's largest brick and mortar retailer, Walmart. The company has released much of its sales data to suppliers in hopes that they come up with more efficient inventory chains of their own. In doing so, this allows them to better plan for Walmart's orders while making a higher overall profit.

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