Brick and Mortar Retailers Playing Catch Up on Big Data Analytics Strategies

by   |   January 18, 2013 3:47 pm   |   0 Comments

NEW YORK—When it comes to analytics, the retail industry is at a crossroads—more specifically, at the ever-perplexing place where bricks-and-mortar and digital selling meet. And judging from the array of presentations and booths on display at the National Retail Federation’s sprawling Big Show convention at New York’s Javits Convention Center this week, data gathering and analytics still appear to play a relatively small role in today’s rapidly evolving traditional retail environment.

With 27,000 attendees and around 500 exhibit booths, the conference made headlines with appearances by Walmart’s U.S. chief executive Bill Simon announcing a plan to hire veterans, and former U.N. secretary-general Kofi Annan urging retailers to serve eager consumers in developing countries. But the real news of the conference was about what retail hasn’t done yet in terms of technology upgrades.

During a Tuesday morning keynote presentation titled “The Great Convergence,” Susan Jurevics, senior vice president of global retail CRM and brand marketing at Sony, acknowledged, “Not long ago, digital, bricks and mortar and mobile were seen separately at Sony.”

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But now the consumer electronics giant has retooled its selling strategy to be more “customer-driven” and oriented to newer purchasing technologies. “Mobile is no longer a channel or a fad,” Jurevics told the audience. She also said that Sony “wants to be more predictive,” despite the fact that it has been using on-site behavioral targeting “for years.”

If it was unexpected to hear that a major player in the consumer technology space felt it was behind the curve in regard to analytics, another keynote speaker gave a better sense of the hurdles many traditional retailers face. Tim Belk, chairman and chief executive of Belk, Inc., a 125-year-old, family-run department-store chain based in Charlotte, N.C., described in detail how his company had struggled to reinvent itself online over the past few years.

“We haven’t mastered the omni-channel,” Belk said.

But Belk certainly has tried. He reported that the Southern retail icon had invested $263 million in technology over the last few years, as compared to the $270 million it spent on store remodels and expansions. “This was just to catch up,” Belk said. In 2010, only 1 percent of Belk, Inc.’s sales were from e-commerce. For 2012, that figure rose to 3.3 percent. The company hopes to reach 10 percent by 2015. But for now, the company appears more focused on building its brand on social platforms like Facebook, Twitter and Pinterest than on capturing and utilizing the data it extracts from its loyal customer base.

Casting about the exposition floor, one was struck by how many booths were devoted to new technologies, whether checkout scanners or RFID readers. But few vendors seemed attuned to traditional retail’s biggest foes, the giant online retailers who gather structured and unstructured data in rapidly ballooning gobs and use the conclusions they draw from it to cultivate relationships with consumers.

Not that NRF’s leadership is unaware of the encroaching power wielded by analytics-fortified e-retailers: In an unusual move, the organization, whose worldwide members are largely employed by brick-and-mortar retailers, in December gave its Gold Medal Award to Amazon.com founder and CEO Jeff Bezos.

The convention’s only seminar devoted specifically to big data strategies hinted at why so few old-school retailers have taken the plunge into analytics. The session’s speaker, James Franklin, vice president of business intelligence services at Dell, acknowledged the two main pressures retailers experience when ramping up large data warehouses: limited budgets and long cycle times.

“Big data is nothing new,” Franklin told a small, packed room. He said today’s conversation is “really not about big data. It’s about insights.”

Franklin tried to dissuade his audience of the notion that data analytics was an all or nothing proposition. He laid out an approach for retails that favors building smaller layers of data analysis into a company’s EDW, as opposed to taking an all-or-nothing perspective. “Hadoop is great, but it isn’t for everyone,” he said.

“You can be much more modular today,” said Franklin. One of his PowerPoint slides showed a pyramid of levels of data implementation for which companies can strive, with cognitive analysis, which he defined as “insights from customer behaviors,” at the very top.

He also assured retailers that the idea of bigger isn’t always better when it comes to big data capability.

“All is not lost,” said Franklin, jokingly. “This is a good time to right-size your data warehouse.”

Alec Foege, a contributing editor at Data Informed, is a writer and independent research professional based in Connecticut, and author of the book The Tinkerers: The Amateurs, DIYers, and Inventors Who Make America Great. He can be reached at alec@brooksideresearch.com. Follow him on Twitter at @alecfoege.

Home page photo of shopping carts by code poet via Wikipedia.


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