Three Ways Big Data has Changed Retail Analytics Forever

Forward-thinking retailers are tapping into Big Data to streamline operations and gain a competitive edge over rivals. Wikibon analyst Jeff Kelly discussed this trend in a recently published article.

Kelly gives Wal-Mart credit for pioneering data-driven merchandising long before the term Big Data was even coined. The brick and mortar giant started analyzing internally-generated data in the 90s to gain insights about its complex supply chain, insights that it used to lower the costs associated with excess inventory. These savings enabled it to boost its margins, lower prices and undercut the competition.

Wal-Mart’s project can be considered the spiritual predecessor  of SmartOps, a provider of real-time supply chain management that serial entrepreneur Sridhar Tayur founded in 2000. SAP picked up the firm a couple months ago.

A few years later in the mid-2000s, Amazon also took a page from Wal-Mart’s book and began recommending items based on customers’ buying patterns. Today, more and more retailers are reaping the rewards of Big Data analytics by applying intelligence to new areas:

Price optimization

Kelly writes that retailers are leveraging analytics to price their goods and services on the fly based on real-time metrics such as competitor pricing, supply chain and inventory data, market data and consumer behavior data.

Product placement analysis

Some retailers have started processing video data to identify shopping trends. They’re observing customer movement to assess the effectiveness of promotional displays and improve store layouts and product placements.


The largest retailers are analyzing weather forecasts, promotional campaigns and dates to effectively meet staffing requirements on holidays all year round.

Kelly concludes by emphasizing the importance of Big Data for this vertical:

“Large retailers that have yet to begin using Big Data to streamline operations, improve the customer experience, analyze marketing campaigns or otherwise increase sales and maximize profitability must put in place plans to do so immediately.

“As noted, the retail industry is among the early adopters and innovative users of Big Data, meaning those retailers that have not begun harnessing data to their advantage are farther behind laggards in other industries. Retail CIOs should waste no time in bringing together IT and business stakeholders to lay out a Big Data vision for the enterprise and practical plans to implement them.”