In the business world, ridiculous amounts of customer data is created every hour, minute, and second of each day. Businesses are monitoring where you clicked, what you bought, where you bought it, the location of the store the item was bought, and other information that allows them to understand their customer’s interests. All of this is done in order to provide the customer with more customized service, or in other words – to show them more products they will like so they will buy more. Some companies such as Sears, Wal-Mart, and Amazon have really been pioneers in studying their data to identify and anticipate customer behaviors.
There are a number of standard methods:
- In-home product testing
- Focus Groups
- Mystery Shopping
- and many more!
Then you have the electronic data collection processes:
- Radio Frequency Identification Technology
- Software Logs
- Credit Card Purchases
- Mouse Click Logs
- Web Forms
- Website Logs
- Computer Cookies
- and many more!
Success in the Analysis of Customer Data
Sears – Improving Loyalty Program Performance
So what does all of this mean? Essentially, a business is able to track current or potential consumers’ interests and purchases. For example, Sears is currently using a big data management system that is constantly monitoring and analyzing customer activity which will allow Sears to provide a more personalized experience for customers in their loyalty program. As a result, Sears is able to make more educated and accurate decisions on future communications and offers for members. Sears created a solution that analyzed “customer activity at an individual level.” Dr. Phil Shelley, CTO at Sears Holdings Corporations says “We [as people] want personalized experiences. They mean more to us and are more relevant. I haven’t thought about it much until we were getting into that level of personalization because it wasn’t possible before these tools became available. Now you can get very personalized.” As a result, Sears’s loyalty program exceeds 80 million members and is showing no signs of slowing down in the future.
Wal-Mart – Learning Customers’ Habits
Wal-Mart, the largest retailer in the world, is currently using big data for a number of marketing strategies. For example, Wal-Mart acquired Kosmix to form @WalmartLabs which is being used to gather information from social networks such as Facebook, Twitter and YouTube to strengthen Wal-Mart’s online sales. They have created what is called a “Social Genome” which is used to analyze social media feeds. This means that when a customer buys an item on the Wal-Mart website, Wal-Mart can combine th
is data with information from social networks with actual transaction history. Anand Rajaraman says “It’s a race to see who can use all this data the best. This will change the retail industry, as well as most other industries.”
Amazon – Building Better Customer Relationships
Amazon, one of the largest e-businesses in the industry, has been utilizing big data for years. For example, Amazon analyzes customer purchases to make future recommendations. Amazon also logs what products are viewed, how often, and what was ultimately purchased. By doing this, Amazon can use this information to make product recommendations and display these statistics to others that view that product as well. Amazon’s marketing strategy aims to know what interests the customer and uses this information to make educated suggestions. In 2010, it was estimated that Amazon had over 59 million active customers which resulted in over 42 terabytes of data.
Will Big Data Change how Businesses Market to the Public?
Big and small businesses are starting to implement big data management systems to better customize the customer experience. Sears, Wal-Mart, and Amazon are but a few that have been using big data to revamp their marketing strategies. So what do you think? Can big data improve the consumer’s shopping experience? Or do you think they are encroaching on your privacy?