Big Data is getting plenty of attention in the business intelligence, analytics and technology businesses, but is just at the beginning stages of moving into the mainstream in the retail industry, according to research released this week by the Edgell Knowledge Network.
According to the research, which included a survey and in-person interviews, while 80 percent of retailers are aware of the concept of Big Data, only 47 percent are clear about its implications to their businesses, and 68 percent of retailers are at the nascent stage of analytics maturity.
The researchers point out that the amount of data for retail is growing from the influx of consumer data from Web and social channels and from enterprise data from POS systems, RFID information, inventory details, delivery logs and other sources.
The study further found that 30 percent of retailers have executed a Big Data project and another 5 percent already have, or are creating a Big Data strategy. Half of retailers plan to do their first Big Data project in marketing or merchandising.
The research cites business priorities, budgets and ROI as the biggest inhibitors to investments in Big Data projects, which the retailers point out are not inexpensive because they involve hardware, tools and training. ROI I also difficult to calculate, and, therefore, the projects are difficult to cost justify.
“Big Data inaction in the short term may not be apocalyptic, as all the hype suggests,” the research says. “However, those who continue to ignore building consensus over the next 12 months risk longer-term pain.”
However, retailers face some information challenges in moving forward with Big Data strategies, according to the research. Most retailers have yet to invest in integrated data sets, so the information sits across several silos in most organizations. Another issue is that data collected by third parties (e.g., credit card issuers) use different underlying technologies and may not integrate well with information collected with proprietary systems. Unstructured data presents another integration challenge for most retailers.
The problem with integrating the data prevents many retailers from their desired 360-degree view of the customers, the research says. “The challenge is that a multitude of data warehouses collect similar data from similar sources, with different periodicity. In additional to this, the new external datasets that retailers hope to tap also need to be scrubbed and base-lined before they can be integrated.
Another challenge is that many retailers don’t have the internal capability to analyze the data once it is collected. Though not an immediate concern, the continuing growth of data – including 12 TB of Tweets daily and 40 percent data growth per year (according to various sources) -- will soon present a storage issue. According to the survey, 30 percent of retailers will run out of storage capacity in the next two years.
The researchers recommend that the first steps to achieving Big Data success are “creating internal awareness, identifying high impact decisions that should drive your data strategy, creating analytical capability, demonstrating success, and investing in people, process and technology change.”
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