Applying A Data-Driven Solution in the Retail Sector
Data-driven solutions have become a way of life in the retail industry. Collecting data allows data-driven companies to make intelligent decisions and improve their operations. Let’s walk through the benefits of data-driven solutions for retail.
What is a Data-Driven Solution?
Data-driven solutions refer to businesses utilizing high-quality datasets for better decision-making. It involves interpreting data for several reasons that coincide with improving a company’s day-to-day operations. It can help define measurable goals to execute while also improving efficiency and effectiveness across all areas of a business.
The advantages of a data-driven strategy can act as a long-term competitive advantage for companies to take market share from peers in the long run. Collected data should always be reliable, unbiased, error-free, and timely for companies to draw findings that can produce better results.
How Are Data-Driven Solutions Used?
Before retail businesses can achieve operational efficiencies and better customer experiences, there are a few steps to follow. Here’s the general order used.
Data collection and analysis
The first step in any retail business is data collection. Without data, you cannot know what’s going on in your store. For example, you need to know how many people entered the store, how long they spent inside, what products they bought, and where they went after leaving the store. Several ways to collect data include using a point-of-sale system (POS), tracking mobile devices, and even using paper surveys.
Once you have collected data, you need to visualize it. Without the right tools, you won’t be able to make sense of the information. A good visualization tool should allow you to create charts, graphs, maps, and tables.
Finally, you need to analyze data once you have collected and visualized it. Businesses need to figure out what’s working and what isn’t and then use that knowledge to improve their business.
How the Internet Has Transformed the Retail Industry
Online shopping has become the norm for many people today. Insider Intelligence expects e-commerce sales to pass $1 trillion this year in the U.S. alone. Online shopping has been fueled by several factors, including convenience, affordability, and ease of use.
E-commerce platforms have played a significant role in the rise of online shopping. These platforms allow retailers to sell their products online. In addition, they provide them with tools and services to help manage inventory, ship items, accept payments, and keep track of customer data. Mobile apps have also contributed to the rise of online shopping due to their portability and accessibility. Users can shop anytime and anywhere using mobile apps.
How Data-Driven Solutions Affect Foot-Traffic and Website Visits
Data can be compiled in-store and online for a holistic view of your customers’ buying behaviors. Integrating point-of-sale solutions can provide an indication of customer spending patterns — how much they are buying and how often they shop, for example.
It can also identify when a customer has fallen out of your ecosystem. Businesses can try to re-target this subset of customers with personalized approaches when this realization occurs. Popular methods include exclusive offers by email, push notifications, and targeted ads to bring them back into the ecosystem.
Customer segmentation using data makes it easier to define loyalty, too. There may be a correlation between the degree of loyalty that can be shared across profiles to improve the overall customer experience for your business. Dissecting this data can identify deliverables that businesses need to prioritize for improved customer shopping experiences.
What Are the Goals of a Data-Driven Solution?
Data-driven retail solutions improve efficiencies in many different lines of business. Here are some of the most notable benefits.
Increase supply chain reliability and inventory management
One of the major concerns for retailers in inventory management is that this issue affects more big box retailers in recent months as a knock-on effect of unpredictable supply chains. However, predictive analytics can spot trends in markets that impact the sector. Everything from macroeconomic data to spending data and even weather forecasting can help companies make reasonable assumptions about what products they need to stock now and in the future. This optimizes inventory levels for various goods separately, reducing the likelihood of negative consequences. When inventory challenges take a tight hold on a company, it can severely impact margins in the form of discounts. So, by preparing in advance, businesses can ensure a cost-effective approach is in place.
Another advantage of data-driven retail models in regard to pricing. Retailers can assess consumer tolerances to price increases and whether the net effect will be positive or negative on the top and bottom lines. You can see this in the current consumer price inflation (CPI) data as many retailers have had to change to a discounting approach due to overstocking inventory. Overall, it combats issues like this from arising too often and leads to more efficient revenue forecasting.
Customer journey mapping
Understanding the customer journey is gaining insight into what led a customer to your business. It also showcases how their experience was — from start to finish. In some cases, it may have purely been the convenience factor that brought a customer to you. But either way, useful data can be drawn from this. You can see how often a customer buys with you and how many times per week, month, or year, for example. If it’s an e-commerce sale, you’ll be able to see where they came from — was it organic, or did they arrive on your website from an ad, promotion, or referral? All of these points can be mapped out to determine the effectiveness of existing strategies and where improvements can be made overall.
Another measure of the customer journey is how seamless it was. Retailers can integrate self-service checkouts, point of sale (POS) technologies, click and collect optionality, home delivery, and other services to make customers’ lives easier. The aim is to retain as many customers as possible, keep them happy, and increase annual revenue retention rates — how much is being spent with you outright.
Lastly, the customer journey mapping also identifies peak times. Data-driven retail solutions can predict periods of high traffic based on times, locations, and weather forecasts. Businesses can organize employee work schedules more efficiently using this information. You have the ability to understand when more staff are required and vice versa, which can lead to cost savings from overspending on the firing.
What Data-Driven Marketing Strategies Are Used in Retail?
Marketing efforts can be improved by developing personalized recommendations based on unique customer profiles. This can have the knock-on effect of increased brand loyalty and customer satisfaction.
But, data-driven retail wants to get you a better return on investment from your marketing campaigns. By working with high-quality big data, you can identify the ideal promotional periods to do a sweep of stock or discounts on certain products. Compelling and engaging advertisements can be drawn up, and messaging can increase your sales.
Location-based marketing and geofences
Location is probably the most critical consideration a retail business has. Areas with plenty of foot traffic near convenient travel options tend to be ideal. Once a prime location is found, and in use, you can begin reaching customers using location-based marketing strategies like geofences.
Geofencing is the process of targeting a particular geographic area using GPS, radio frequencies, WiFi, or cellular data. While privacy legislation has restricted tracking, geofencing acts as a good alternative. It can be quite effective — particularly for businesses with physical locations — for displaying ads, in-app messages, or notifications for marketing purposes. This is because geofencing understands when consumers are most likely to interact with certain businesses. For example, a fashion outlet may communicate a unique offer available to customers in a certain area in a retail setting. Ideally, they may transmit the message on a weekend when they know customers are more likely to visit a store and make a purchase. Promotions can be customized for different areas, too.
Beaconing, or beacon marketing, is another proximity-based marketing approach. It searches surrounding areas for enabled BlueTooth devices. If a customer is within a beaconing zone, a business can send notifications right to their mobile devices. Examples of beaconing in retail include notifying customers of sales, informing them what items are low in stock, making suggestions for seasonal shopping, or informing them of unique offers available today. Data-driven retailers can also isolate which items are best-sellers and what consumers may shop for on a given day. If you use shopping history data, complementary items can be suggested to entice customers to spend more. The end goal is to encourage a purchase.
How Proxies Help with Data-Driven Solutions
Here’s how Rayobyte’s services can help you retrieve the highest quality data for all of your locations.
Data center proxies
Data center proxies can extract data for online businesses at scale. They ensure anonymity to retrieve important information on your customers and competitors. As the name suggests, data center proxies are stored in data centers. These are the cheapest proxies, and they’re plentiful and readily available. They’re also fast, so they’re suitable for use cases that require fast speeds. The biggest drawback to data center proxies is that they’re more easily identifiable originating in a data center. Since most users don’t access the internet with data center IP addresses, this automatically throws a red flag for many websites. As a result, some websites ban all data center proxies, while others ban entire subnets if they detect bot-like activity from one data center IP address. That’s why Rayobyte has a diversity of C-class subnets but A- and B-classes as well.
ISP proxies boast the authority of residential proxies and the speed of data center proxies. The best of both proxy worlds! ISP proxies are housed in data centers but are IP addresses issued by real consumer internet providers. Using an ISP proxy like Rayobyte’s premium ISP proxies makes it possible to access fast, stable connections that are as difficult to detect as residential IP addresses. In addition, Rayobyte puts no limits on bandwidth or threads, meaning more significant savings for you! Rayobyte currently offers ISP proxies from the US, UK, and Germany.
Residential proxies are the perfect complementary product for physical retail locations utilizing data-driven initiatives. They’re an excellent tool for web scraping to find the most critical data relating to customer behaviors and values. For example, you can see how your brand is being perceived by customers and collect feedback to improve customer experiences. In addition, marketing practices like SEO and ad campaigns can also be continuously monitored.
Residential proxies are issued by real consumer internet service providers (ISPs). These are the IP addresses most people use to access the internet. The most significant advantage of residential proxies is their authority. You can tap into a network containing millions of devices from all over the world that belong to real users. As a result, they have the most authority and are least likely to be detected by anti-bot software.
Rayobyte has a large pool of residential IP addresses capable of handling projects of any size. You can target any country in the world at no extra cost, don’t put any limits on how many concurrent threads you send, and provide a separate, unique IP address for every request. Because residential proxies have to be obtained directly from end-users, ethical proxy providers have to take extra steps to ensure that they aren’t negatively affected when their IP address is used. At Rayobyte, we set the industry standard for ethical proxy sourcing. We make sure our end-users provide fully informed consent. We don’t bury our TOS at the bottom of pages of small type. We only use their IP addresses when their devices are either plugged in or charged and if they aren’t using them. We’re always happy to discuss our ethical practices.
Our commitment to ethics doesn’t stop at how we acquire residential proxies. We also vet our customers. There’s no option for buying our residential proxies directly on our website. Potential buyers must demonstrate that their use case is legitimate before we sell them residential proxies. After purchasing our residential proxies, we continue to monitor their usage for any signs of illegal or unethical use.
Data-driven solutions have revolutionized many aspects of daily life for consumers and retail businesses. As a result, companies can make appropriate decisions that improve business operations and user experiences by accurately collecting customer information, such as user acquisition and customer loyalty programs. Reach out to Rayobyte today!
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