Innovation is the only option for an online retailer to stay relevant. In layman terms, data-driven innovation is critical in improving every aspect of online selling.
The online retail market drives trillions of dollars in revenues and employs millions of people all over the world. The way people buy things online evolved a lot and the competition is fierce.Thousands of retailers are fighting to get the biggest piece of the pie. Retailers must embrace a data-first strategy to compete with the gorillas in the market.
Here are a two areas where retailers can innovate using big data without spending too much time and money.
Responding to market trends
Smart retailers track inventory levels and competitor activity using web data extraction techniques. This enables them to automatically respond to market changes and allowing them to take sensible action to grow the business. With data extraction retailers can get answers to the common questions like
Did competitor ‘X’ introduced any new products
What is the price of product ‘Y’ in competitor stores
How frequently competitor ‘Z’ change their pricing in a specific category
Answers to these questions can help develop a winning strategy
Amazon mastered the art of dynamic pricing . The chance of a potential buyer ending up buying when they visit Amazon is very much higher than their competitors due to the dynamic pricing adjustment.
With the help of big data, every retailer can do the same. Retailers decide when prices should be dropped and when not to if they have accurate competitor data. Without accurate data, they would reduce prices for a particular product line without knowing whether there is demand. This can cause huge losses. The data required for pricing optimisation cab be extracted using a technique called web scraping.
Not every retailer can afford spending millions of dollars a month to fight competition. Pricing optimisation and market trend analysis can be done without spending a lot of money.
In the next posts, we will dig a little deeper on how big data can help retail grow.
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