How "Big" Is Data In The Retail Sector?

1/16/2020

Analyzing a particular technology-related phenomenon has become quite mandatory in today's business world, especially when this particular phenomenon is approaching a sector which isn't normally connected to "tech stuff". Big data and its usage for marketing purposes has been, in fact, quite a trendy topic in the past couple of years. We all know that the retail sector has been heavily investing in e-commerce approaches since 2015, but how "big" has been the usage of data? Let's analyze this matter in detail.

Why Data? How? When?

In order to properly dissect this topic, a general introduction on how data operates is mandatory. Big data is a term which refers to the usage of numerical values associated with a specific user and a single (or multiple) keywords. For example: if a user searches for "designer furniture," that very user will create a numerical value (called data point) which, when properly processed, could be used to target all the users with a similar value to show them a specific ad. With this being said, when properly set into place, the usage of data points could massively improve the success and conversion rate of a single digital marketing campaign (see what happened with the Cambridge Analytica scandal), therefore this is probably the reason why many retail top players have recently opened dedicated branches for data science.

Some Examples

In 2018, the biggest influx of revenues from big-data orientated campaigns was coming from Wal-Mart (US), which moved them to the first position of the "Biggest Retailers In The World" chart (following Investopedia). Wal-Mart has been using big data-focused marketing campaigns on both their digital marketing channels (i.e. Facebook and Twitter) but also, surprisingly, with third party collaborations such as Honey. Honey is a browser extension which automatically scans the internet for coupons and then automatically applies them once a user goes to checkout. Wal-Mart has released tons of coupons to associate their codes with users and, therefore, collect their data to better tailor their ads (80% of social media users in the US, in fact, have seen a Wal-Mart ad on their feed in 2018). Following this very example, many other enterprises like Tesco and Costco have been using this very setup.

The Market Value

In digital marketing, big data was the most looked-after topic from 2017-19. Even after the infamous Cambridge Analytica scandal, companies who were embracing e-commerce approaches have been highly looking after data science as a whole. Currently, the usage of data-driven marketing strategies fluctuates around the billion-dollar figures, which clearly states the power of this "martech" (marketing technology) approach. It's safe to say, at this stage, that big data and marketing (even not strictly digitally driven) will keep on working together in the nearest future.

To Conclude

The usage of big data is definitely moving towards an "industry standard" status, given its usage in small, medium and (as said above) enterprise companies. Will this be just a meteor passing by in the vast world of marketing or is going to be a stable strategy for the future to come? Time will tell us.

-Paul Matthews is a Manchester-based business and tech writer who writes in order to better inform business owners on how to run a successful business. He’s currently consulting the eCommerce division of Arighi Bianchi. You can usually find him at the local library or browsing Forbes' latest pieces. 

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