Success in retail hinges on a deep understanding of consumers. Anticipating their wants and needs — then offering the right product, in the right place, at the right time, and for the right price — has always been paramount.

To truly understand today’s consumer, however, retailers need to address a new dimension that is challenging retailers in unprecedented ways: data. Not just traditional data – Big Data.


Never before have customers generated such a deluge of information about their habits, behaviors, and desires. Every click, tap, or touch; every swipe, search, or share generates consumer information that, if ignored, will leave retailers in the dark. Big Data is not just technology; it is a transformational strategic capability that will drive sustainable competitive advantage. In fact, it may be the most important strategic capability for consumer-focused businesses in the next 10 years.

But while Big Data may portend great challenges for retailers, it also promises unprecedented opportunities. The good news for retailers is that once it is processed and refined for its crucial nuggets of insight, Big Data isn’t all that big. Companies that realize this — and master the ability to rapidly sort through massive amounts of data, identify the differentiating bits of insight, and quickly take action — will be the ones that win.

The payoff for retailers that, in effect, learn to surf the deluge of data is hard to ignore. Cisco IBSG estimates a 54 percent improvement in after-tax margins for a typical retailer once Big Data analytics are adopted. But where will all of that data come from? And just how will it be processed?

We believe that three major trends—video, social media, and mobile data—will drive the Big Data thrust in retail—not just the explosion in the ways that they are used, but the rapid advances in how they are analyzed:

  • High-definition video combined with Big Data analysis promises a wealth of new insight from within the retail setting. This will include everything from facial recognition and information on shopping partners to age, gender, ethnicity, and socioeconomic indicators. Looking further, video analysis could determine the health, mood, and buying habits of a consumer by monitoring body temperature, gait, and posture.
  • Social media offers retailers relevant, subjective information in all major demographics by tracking consumers’ real-time interactions and behaviors. A consumer’s age, gender, employment and relationship status, social and family influences, interests, buying history, likes, dislikes, technical sophistication — all will combine for a detailed picture of that individual.
  • Mobile devices also represent a new horizon in consumer knowledge. By tracking (and predicting) a consumer’s location, retailers can glean crucial contextual insight, while enabling store touchpoints with mobile access for an omnichannel experience. Mobile devices can offer a wealth of insight through chats, tweets, blogs, browsing and search histories, and purchase records. In turn, retailers can send targeted alerts and promotions in real time.

All of this information will influence a wide variety of factors for the retailer, especially sales and marketing, supply chain, merchandising, and operations. More specifically, it will impact store layout, product assortment, store merchandising, pricing strategy, and distribution strategy. There will also be leaps in in-store service, marketing and promotions, social media strategies, and understanding of wallet share and overall profitability.

To accomplish all of this, retailers need to consider adopting holistic Big Data business and technology architectures. At the same time, a key factor for success in driving real value and competitive advantage through Big Data lies in the ability to seamlessly and productively collaborate. This includes developing and executing Big Data opportunities at high speed, both inside — and outside — the walls of the enterprise.

In short, Big Data offers a more advanced and effective way to do what retailers have always done: know the customer.


Ronald van Zanten

Director, Internet Business Solutions Group

EMEAR and Latin America, Retail and Consumer Goods Industries