BRICK MEETS CLICK

BIG DATA UPDATE, 4Q 2013

HOW THE GAME IS CHANGING:

BIG DATA IN RETAIL
Weve been tracking retailing professionals experiences and attitudes toward big
data regularly over the past two years. The March 2013 survey made it clear that big
data had the potential to change the way retailers compete. More than 100 professionals participated in the October 2013 survey. The results confirm the increasingly
important role big data is playing in changing the game of retailing, and they
point to what we should be watching for in the next 12 to 24 months.
Overall, big data and retail analytics may be only one of the new challenges retailers
are wrestling with, but it stands out because it can do so much specifically:

>

BIG DATA CAN IMPROVE

EXECUTION, SOMETHING
RETAILERS UNDERSTAND
VERY WELL.

>

ANY SIZE RETAILER, SMALL

OR LARGE, CAN LEVERAGE

IT IF THEYRE WILLING TO
TAKE THE PLUNGE.

>

BIG DATA CAN CREATE

NEW, PERFORMANCE-

IMPROVING CAPABILITIES.

Brick Meets Click delivers the strategic insight and guidance that retailers,
supplliers, and technology providers need to drive growth by meeting shopper
needs in todays omnichannel marketplace. Visit us at brickmeetsclick.com.

BIG DATA SCORECARD, 4Q 2013

PAGE

3
4

A must-have capability?
Biggest competitive advantages?
Speed and agility.

5
6

7
7
8

73% CITE ITS PREDICTIVE ANALYSIS CAPABILITIES.

72% SAY IT WILL SUPPORT FASTER DECISIONS.

Most

common focus for projects?

Customers.

31% FOCUS ON OPTIMIZING DELIVERY OF SHOPPER MESSAGES.

How will it surprise and delight

shoppers?

91% SAY IT WILL MAKE GREATER PERSONALIZATION POSSIBLE.

28% ARE MINING FOR SHOPPER INSIGHTS.

Which digital breadcrumbs are

FOR THE FIRST TIME, SOCIAL MEDIA AND WEBSITE DATA RANK

Will access to customer data

MANY SEE LIMITS IN THE FUTURE, BUT WILL RESTRICTIONS BE

retailers tracking?

be restricted?

Wheres the supply-side focus?

10

The ROI is taking shape.

10

11

73% SAY ITS NECESSARY FOR OMNICHANNEL EXECUTION.

Who sponsors the majority

of projects?

Biggest barrier to use?

brickmeetsclick.com BIG DATA update 4Q 2013

AS HIGHLY AS ITEM-LEVEL SALES DATA.

DRIVEN BY GOVERNMENT REGULATIONS OR SHOPPER CONTROL?

INVENTORY OPTIMIZATION AND SUPPLIER COLLABORATION
GET THE HIGHEST RANKINGS ON THE SUPPLY SIDE.
HALF THE COMPANIES RUNNING BIG DATA PROJECTS HAVE
ESTABLISHED THE BUSINESS CASE AND BEGUN TO
MEASURE BENEFITS.
MARKETING LEADS AT 55%, FOLLOWED BY MERCHANDISING AT 14%.

LACK OF ORGANIZATIONAL READINESS SLOWS ADOPTION.

2

A MUST-HAVE
CAPABILITY?

>

Big Data is creating the capabilities retailers

need to compete in a changed marketplace.

73

% AGREE BIG DATA IS NECESSARY TO EXECUTE A

SUCCESSFUL OMNICHANNEL STRATEGY.

Traditional competitive tactics will no longer generate the necessary sales growth in a
marketplace thats been changed by ecommerce and the challenge of connecting with
digitally empowered shoppers. Among retailing professionals, nearly 3 out of 4 believe
that big data will play an important role in creating the capabilities needed to execute
competitive omnichannel strategies, from managing assets across channels to radically
improving customer service and conducting social media dialogs with shoppers.

63

% SAY BIG DATA APPLICATIONS MAKE IT EASY TO

INNOVATE IN WAYS THAT DISRUPT THE MARKET.

Bringing disruptive change to the market isnt for all retailers, but big data is likely to be
a part of the process for those who want to play in this space.

brickmeetsclick.com BIG DATA update 4Q 2013

THE BIGGEST
COMPETITIVE
ADVANTAGES?

>

Increased speed and agility.

Those who can make and execute decisions confidently and quickly will have the advantage
in todays fast-moving marketplace, and big d ata is expected to deliver increased
confidence, speed, and agility.

PREDICTIVE ANALYTICS WILL HELP

SHOW WHERE THE BUSINESS IS GOING.

RAPID EXECUTION WILL CAPTURE

MORE BENEFITS.

Big data is also making it possible to find out what works and doesnt work faster than
ever before by including new data sources, and making it possible to move beyond
traditional statistical tools like sampling to direct experimentation.

WHATS THE MOST IMPORTANT

WAY BIG DATA CAN BE USED TO
CREATE VALUE FOR RETAILERS?

brickmeetsclick.com BIG DATA update 4Q 2013

73%

USING
PREDICTIVE
ANALYSIS

72%

SUPPORTING
FASTER
DECISIONS

49%

INCLUDING
NEW DATA
SOURCES

33%

EXPANDING
BEYOND
SAMPLING

33%

CREATING
SINGLE DATA
SOURCE

25%

CONDUCTING
LARGE-SCALE
EXPERIMENTS

MOST COMMON
FOCUS FOR CURRENT
PROJECTS?

>

Customer messages and

shopper insights.
Omnichannel shoppers offer retailers more opportunities for communication, but the
process is more complicated.
TOP BUSINESS FOCUS: MORE EFFECTIVE CUSTOMER COMMUNICATIONS.
Almost a third of current big data projects involve efforts to optimize the delivery of
messages to shoppers. Projects range from targeting offers and price optimization
on a local level to improving the timing of display advertising and leveraging two-way
dialog with shoppers.
A STRONG SECOND: MINING DATA FOR SHOPPER INSIGHTS.
More than a quarter of active projects are mining different data sources for shopper
insights. This was the top project focus in our March big data survey.

BUSINESS FOCUS ON CURRENT

BIG DATA PROJECTS

31%
28%
22%
8%
11%
0

brickmeetsclick.com BIG DATA update 4Q 2013

optimizing delivery of
messages to shoppers
mining for
shopper insights

demand and
assortment planning

collecting/analyzing
market basket transactions
all other
10

20

30

40

50

HOW WILL BIG DATA

SURPRISE AND DELIGHT
SHOPPERS?

>

Better personalization and

more shopper solutions.
Improving the shopping experience remains a consistent emphasis, but meaningful
differentiation turns on how well retailers can surprise and delight their customers.
91% say big data will help retailers personalize their appeal to shoppers.
79% say it will help retailers offer more solutions to customers
(i.e. bundle together products that solve a shopper problem).
These assessments line up with the top sources of value big data can generate for
shoppers. The top two were receiving more customized offers and enabling
discovery of more choices.

TOP 5 WAYS BIG DATA WILL

HELP RETAILERS SURPRISE
AND DELIGHT SHOPPERS:

brickmeetsclick.com BIG DATA update 4Q 2013

91%

PERSONALIZING
OFFERS

79%

OFFERING
MORE
SHOPPER
SOLUTIONS

70%

IMPROVING
PRODUCT
AVAILABILITY

65%

INTRODUCING
NEW PRODUCTS

65%

AUTOMATING
ROUTINE
REPLENISHMENT

WHICH DIGITAL
BREADCRUMBS
ARE RETAILERS
FOLLOWING TODAY?

38%
SOCIAL
MEDIA

35%
WESITE
VISITS

WILL ACCESS TO
SHOPPER DATA
BE RESTRICTED?

>

New sources are becoming important.

For the first time since weve been tracking big data attitudes among retailing
professionals, social media and website data have gained parity with item-level sales
and shopper transaction data as a source of customer insights.

35%

ITEM-LEVEL
SALES

>

35%

SHOPPERIDENTIFIED
TRANSACTION
DATA

28%

SHOPPER
FEEDBACK

25%

MOBILE
DEVICES

24%

MARKET
BASKET DATA

16%

IN-STORE
TRACKING

Access may be limited.

Theres concern that access to at least some of this data may be restricted in the future
by either government regulation or individual actions.
Almost half of those surveyed thought this was likely, but a large percentage was
skeptical that individual action would have much impact.

RESTRICTED BY INDIVIDUAL CUSTOMER ACTIONS

48% LIKELY

40% UNLIKELY

brickmeetsclick.com BIG DATA update 4Q 2013

RESTRICTED BY GOVERNMENT REGULATION

46% LIKELY

16% UNLIKELY

WHERES THE
SUPPLY SIDE FOCUS?

>

Inventory optimization and supplier collaboration

get top attention.
The supply side of retailing is tailor-made to benefit from big data analytics, because the
work processes generate a lot of information. Data sharing both within and across/between organizations will be one of the keys to capturing this value.
On inventory optimization, the ability to bring together sources of data that could not
previously be combined will improve forecasting and make it possible to localize inventory to store-specific requirements.
On supplier collaboration, big data is expected to help integrate ordering and replenishment data across organizations.

RATING BIG DATAS POTENTIAL

FOR IMPROVING THE SUPPLY
SIDE OF RETAILING
1 = LOW, 5 = HIGH

brickmeetsclick.com BIG DATA update 4Q 2013

4.4

INVENTORY
OPTIMIZATION

4.2

SUPPLIER
COLLABORATION

3.9

CUSTOMER
SERVICE
MANAGEMENT

3.5

WORKFORCE/
LABOR
MANAGEMENT

WHAT DATA HAS VALUE

FOR IMPROVING
SUPPLY-SIDE
PERFORMANCE?

>

Shopper data joins item data.

Item-level movement data POS data and market basket data is still recognized most
broadly as the type of big data that will improve supply-side performance, but tracking
in-store shopper behavior and shopper feedback are not far behind.

100

item movement
80

60

86

tracking in-store
shopper behavior

75%

shopper feedback

73%

40

20

brickmeetsclick.com BIG DATA update 4Q 2013

WHATS THE STATUS OF

BIG DATA PROJECTS?

>

Adoption is progressing and ROI is taking shape.

62

% OF COMPANIES RESPONDING WERE INVOLVED

50

IN BIG DATA PROJECTS.

% OF THEM HAVE ESTABLISHED THE BUSINESS

CASE & 48% ARE MEASURING BENEFITS.

ALMOST HALF OF PROJECTS

ARE AT OR NEAR COMPLETION.

55%

MARKETING

25%

START

START UP

brickmeetsclick.com BIG DATA update 4Q 2013

14%

MERCHANDISING

18%

ASSEMBLING
DATA

11%

9%

OPERATIONS

PROTOTYPING

18%

IN PILOT

7%
IT

27%

PRODUCTION

FINISH

MARKETING SPONSORS
THE MAJORITY OF BIG DATA
PROJECTS.

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THE BIGGEST BARRIER

TO ADOPTION?

>

Lack of organizational readiness.

Among the top four barriers cited, none stood out dramatically, but they all
represented different dimensions of the same thing: a lack of organizational
readiness to take advantage of big data.

WHAT ARE THE MOST

IMPORTANT BARRIERS TO
PROGRESS IN USING BIG DATA
AMONG THE COMPANIES
YOU WORK WITH?

5.5

INADEQUATE
INFRASTRUCTURE/
STAFF

5.4

BUDGET
LIMITATIONS

5.1

SHORTAGE OF
DATA SCIENTISTS

4.8

ORGANIZATIONS
ARENT NOW
USING AVAILABLE
DATA

8 = MOST IMPORTANT

1 = LEAST IMPORTANT

brickmeetsclick.com BIG DATA update 4Q 2013

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WHATS YOUR TAKE?

>

Send us your comments on big data in retail.

Use the Contact Us form at brickmeetsclick.com to email us.
Visit brickmeetsclick.com/we-want-your-business-to-grow for more information on
our services for retailers, suppliers, and technology providers.

brickmeetsclick.com BIG DATA update 4Q 2013

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