Big Data Revolutionizing Retail

Buying Evolution

Predicting fashion trends has long been a tricky skill perfected by those who move up the buying ranks of organizations around the world. Always a step ahead of the next best-selling trend, buyers are often focused on one specialized sector of a company to perfect the art of predicting what consumers will purchase, but could there be a more accurate way to anticipate trends evolving from the introduction of interactive Web 2.0?

Social media platforms are providing an unprecedented plethora of knowledge regarding individual’s fashion preferences. Women and men alike are tweeting their favorite designers, instagramming their latest outfits, checking into stores on Facebook, and ‘pinning‘ favorite runway looks world-wide, and big-time organizations are catching on.

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Social media is not the only outlet large retailers are analyzing, but with the popularization of e-commerce in recent years, buyers are gaining insight into top stock searches and purchase behaviors like never before. In the same way, organizations can cease production on not-so-successful garments in an effort to reduce unnecessary inventory that will inevitably end up in the back corner sale section of stores.

Suggestive Selling

This collection of information is sometimes leading customers to purchase things they didn’t even know they wanted. Suggestive selling using big data from e-commerce sites has led to increased web traffic and conversion rates for those e-tailers who have mastered the art of using big data correctly.

Companies such as Zara have taken this task further to physically place handheld devices in stores so that sales personnel can input actual customer feedback regarding garment specifications to better match consumer demand. Criticisms such as ‘this dress hits a little too high above the knee’ or ‘this top would be great sleeveless’ have been noted in changes to production in as little as two weeks time. This focus on keeping inventory low and receiving constant feedback creates a high turnover ratio and alters the focus to give the consumer exactly what he or she wants.

Data analytics advocates are capitalizing on this opportunity by creating platforms used to analyze big data facts rather than old-fashioned intuition. A variety of software options such as Teredata and Hadoop are continually being introduced; each improving on the relational implications of the last. These applications are taking social media content, e-commerce interaction, and digital sales reports into consideration while taking the ‘guessing’ out of a once intuitive career, and could one day potentially do the job without the help of a human hand altogether.

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GroupON or GroupOFF?

Young New Yorkers live by their phones. You need to find a fabulous nearby restaurant, Instagram the street performer on 39th and 7th, and now introducing the mobile coupon. It is no secret that rent is not cheap in New York and people are finding creative ways to save money, but they’re not getting out their scissors and newspaper anymore.

Sites such as Groupon are revolutionizing the way people eat, entertain, and buy everyday items by providing discounts up to 90% redeemable by mobile devices upon arrival, but is Groupon the right thing for your business?

Pros:

You’re getting the consumer in the door. Somehow a Saturday cupcake baking class in the East Village makes the 30 minutes subway ride worthwhile when you’re offering 50% off and an additional dozen cupcakes for free on the side. You’re making the consumer feel special and smarter than the other ‘regular people.’ You’re doing exactly what brands aim to do: build a relationship and loyalty with the customer.

So what if they never come back again? Their facebook or Instagram check-in complete with pictures of their experience at your business is the most organic way of word of mouth marketing. How do I know? Because I took a cupcake baking class at Butter Lane Cupcakes in the East Village, pictures to prove it, and have recommended it to numerous locals and visitors in the city.

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Cons:

Groupon doesn’t promise brand loyalty. In the age of comparison online shopping and deal hunting, the nature of the website is to enable the consumer with choices. These choices serve as a double edged swords to businesses in the 335 cities Groupon currently serves in that the next deal is just a click away. This doesn’t mean it is not worth being part of the consideration set; it just means you have to create a worthwhile deal supported with superior service.

Criticizers of Groupon insist that there is a low conversion rate to loyal customers, but it depends on your industry. The woman in need of a repairman cannot wait until there is a deal on Groupon to return to using her refrigerator. However, when an event calls for cupcakes, I return to Butter Lane not only for the confidence in the product, but for the feeling of nostalgia.

The answer to all marketing qualms is not Groupon alone, but the key is integrating it into a working marketing campaign. Requiring Groupon codes redeemable only when checked in on Facebook, combining the offers with signing up for mobile alerts, or targeting Groupons to segment-specific Klout influencers extends the deal farther than the actual service being provided. There are endless possibilities to be explored, and until the perfect marketing mix is found, I’ll keep mixing cupcakes.

Millennials and Social Media

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Destroying the Workplace

The millennial generation is destroying the workplace. We think wearing jeans to work is appropriate, every assignment needs a gold sticker upon completing, but most terrifying is that we bring with us a new wave of technology revolutionizing business practices on a global scale.

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This undeniable disparity between generation x and the millennials pose issues far beyond company culture, but rather down to the core of business and financial planning. To think by 2025, demolishers of the traditional business atmosphere like myself will overtake 75% of the workplace by 2025. Will 12 years be enough to bridge the gap?

Many companies wondering the same question postpone joining the social media realm for a variety of reasons, but most are masked by the consensus that valuating the benefits of social media in monetary terms is seemingly impossible. In the Harvard Business Review Analytics Services survey polling 2100 organizations found the top two benefits perceived were an increase in product awareness and website traffic, however 75% were unaware which channel was most effective in targeting their specific consumer base. There is a recognized understanding that there is some benefit, but numerous companies like those surveyed here are unable to understand the link from cost to profit.

Conversion is Key

There is no doubt that maintaining a social media presence is beneficial from an awareness standpoint, but making initiatives profitable is the true concern of any business. It is perceived that every company ‘should’ have a website, facebook, or twitter, but simply maintaining these websites with the annoying occasional promotion or insincere open-ended question without interaction is virtually useless.

The benefit does not lie in maintaining the bare minimum, but rather the development of relationships. With the boom of ecommerce and exponential growth forecasted in the future, it is interesting to think that social media could potentially replace the customer in-store experience entirely. This now leads to the question: who will foster these online relationships?

Millennials like myself! Having grown up with a cell phone in one hand and laptop in the other, the same qualities that give us a bad rep could mean big bucks for organizations. The dreaded members of the millennial generation like myself have an unprecedented understanding of social media. Similar to learning a second language growing up with ease, we have mastered the language of technology. Combine this understanding with higher education, and the most profitable marketing strategies to convert social media users into loyal customers are sure to follow. And the best part? We will do it all in jeans; gold stickers in hand.