The online world of retail as well as the physical world both rely on collective data in order to expand their knowledge, recognition and personalised approach to their customers. Collecting, analysing and selling date has become the foundation of the earning of high-flying internet players – and as like everything else in the retail world, it is increasingly taking an omnichannel form.
Big data in Retail
Computer transactions shed light on four important applications according to the head economist at Google, Mr Hal Varain (Zuboff, 2015)
He compiled the four worthwhile applications as;
- Data Mining and Analysis
- New and improved contracts thanks to better monitoring
- Personalisation and customisation
- Continual experimentation
When comparing these four applications with online major retailers, it becomes evident that data is crucial in the retail world. Coupled with our personal shopping experiences and thanks to ongoing analysis of online shopping, we are also edging towards a more personalised internet experience too. Big date is evolving from Re-tail to ‘Me-tail’
In 2016 Martijn and Tokmetzis stated that ‘Surveillance is the earning model of the internet.’ Google, Facebook and Amazon as well as Zalando enthusiastically collect the date from their customers in order to continually improve their services. The better they know their customers, the better they can enhance their advertising both directly and indirectly.
Directly speaking, improving customer experiences is based on individual needs and desires. A customer’s homepage of large retailers is automatically customised and tailored to your shopping history. Although one-to-one personalisation is not always possible in this style, micro-segmentation based on 360-degree customer profile is the next best thing.
Included in this full circle profile is;
- Demographic details
- Customer card data
- Purchased articles
- Purchased periods or moments
- Google Analytics data
- Social media data
- Click behaviour from e-mails
- Click behaviour from Google Adwords
- Mobile behaviour from Apps
- Chatbot information
- Information from customer service contacts
- Data from connected advices
On top of this collective data is omnichannel which upsurge the possibilities. Not only do physical retailers have the means to gather data online through loyalty cards and online purchases, they also have the ability to track shoppers via Wi-Fi or beacons to see which shops they visit. Coupled with the retailer’s contact with their staff in their shops, this useful data can be channelled to increasing overall sales and success rates.
The data collection does not simply stop after the purchase is made. Data can also be used to tweak aftercare services and their conditions. This area is particularly useful in commercial for service providers. When Google’s Varian talks about ‘new forms of contract thanks to better monitoring,’ this is exactly what he means. If insurers are tracking their customers and notice a decline in their lifestyle from the start of their original contract, their premium can automatically be adjusted to reflect the same. Likewise, food subscription boxes can also be adjusted if it seems apparent that someone has an allergy or an intolerance to a certain food type or is simply on a diet. Soon, we expect this type of automatic adjustments and flexibility will be built into smart contracts.
Mathematician Wim Vanroose connects smart contracts to blockchain and smart machines. He stated, ‘with a smart contract, your smart dishwasher will be able to negotiate via the internet on an online marketplace for the energy it needs to wash your dishes. Once agreed, the machine can conclude a contract with the supplier, which will be registered in a blockchain.’ How amazing is that! And it doesn’t stop there……based on the record of its own energy use, the data can then be further used to later contact other electricity suppliers to negotiate new contracts for each new wash!
The sale of data is also a making model in its own right. Data vendors have made a profession from selling detailed personal information to advertisers and marketeers. In actual fact, this trading of data is the sole reason for the increasing number of websites, applications and connected devices.
Big Data and Social Media
Whether you maybe aware or not, Facebook is constantly monitoring all of our online activity whether or not we are logged onto the social media platform. The Big Brother of the social media world then sell this information to advertisers in order for them to target the right group of people online. In the same way, Google also allows advertisers to make use of standard search activities so that you can receive personalised advertisements. In the retail world, this is known as ‘Behavioural Targeting.’
We are all familiar with ‘cookies’ and you may or may not know what is their actual purpose? Well, cookies ensure that you are immediately recognised by web retailers and media platforms so that the space is filled with you specifically in mind. What we don’t see is the auctions behind the scenes whereby companies are bidding to win the right to attach their adverts to your virtual identity. There is always a method to this madness and now you know that the adverts are not ‘coincidental’.