Using loyalty programs can help retailers monetize Big Data, according to a newly released report from IDC Retail Insights, Framingham, Mass.
“The goal of big data analytics – monetization of its insights through traditional levers of customer loyalty, revenue growth, cost reduction and new business models – depends on harnessing four big data streams, customer data social data, social data, market data and supply data within the decision management frameworks of key retail business processes and their four types of intelligence,” the research says.
IDC says that the “3rd Platform of information technology” and its four pillars—big data and analytics, mobility and broadband, social business, and cloud services – is creating an ecosystem within which retail business and IT strategies will continue to rapidly evolve. The 3rd Platform is already playing out in retail, creating new line of business roles, bases of competition, applications and analytics, and the adoption of consumer and associate online devices inside stores.
The research firm adds that together these forces create an information environment within which retailers earn customer loyalty, bring successful new products to market, collaborate through supply chains with business partners, enable associates, reduce risk, ensure compliance, promote their brand. However to do this effectively, retailers need to capitalize on big data and analytics.
There are some of challenges as well. The research points out that value creation requires alignment of big data and analytics with “the three imperatives of omnichannel retail” – insight across the retail value chain, personalization of consumer touch points, and opportunities for community engagement with the brand.
Also posing challenges in the successful monetization of Big Data are volume, velocity and variety of data. IDC says retailers can meet these challenges by integrating Big Data insights with transaction systems and traditional business intelligence; revealing opportunities by spotting episodic, recurrent and systematic patterns; discovering and determining the meaning of unstructured data; extending retail data models to encompass big data entities; finding new skill sets and fitting technologies to meet business needs.
“Four quadrants of the intelligent retail economy—customer data sources, social data sources, market data sources, and supply data sources produce constant streams of data creating millions of transactions and billions of interactions,” said Greg Girard, IDC Retail Insights program director, one of the experts who conducted the research, in prepared remarks. “The returns on investment in big data and analytics can be monetized through traditional levers of customer loyalty, revenue growth, cost reduction, and new business models. Value creation requires aligning big data and analytics projects with three imperatives of omnichannel retail – insight, personalization, and personalized community engagement with the brand. Retailers will derive more value from big data and analytics as they successfully manage five dimensions of change – intent, process, people, data, and technology."