By Rick Berry
ABC Mobile Pay Inc.
Big data - the vast troves of deep information about customers and their buying experiences - is now becoming a tool that more businesses than just the "big boys" can use. In fact, if small to midsize businesses (SMBs) want to remain competitive, they must also develop an operating model that incorporates big data.
However, many SMB owners feel overwhelmed by such a time- and money-intensive investment, which requires a level of technical and marketing expertise most of them lack. So is capturing big data really within the grasp of the SMB retail merchant?
The answer is yes. Not only is it within their grasp; if they let it slip through their fingers, they're going to regret that they passed up big data's potential to improve sales - and the bottom line.
Big data is here to stay. Used properly, it captures retail information that drives marketing and other actionable behavior, leading to quantifiable results. But many SMB merchants have no clear idea of just where to start. Their resources to throw at things like social media are extremely limited, and adding big data into the equation can seem to be too much to tackle.
How can big data make a difference to a merchant's bottom line? Here's just one obvious example. Normal systems capture a sale. We know when someone buys. What about when customers come to an establishment looking for a particular item, but they don't make a purchase?
What kind of data can your merchants harvest from that? Wouldn't it be nice to know why those customers didn't buy? Did the retailer offer the right product, but the price wasn't competitive? Was a particular customer unable to find the style or color he or she wanted, or couldn't find the product at all?
What if a product in an online store is racking up many page views, but the sales aren't there? Why aren't motivated shoppers clicking the Buy button? Not having the information to ascertain why a product is not selling, you might discontinue the product. Big data could change that decision.
While most big software developers offer a suite of tools that capture business intelligence, at the moment SMB merchants have no one-stop-shop simple solution for collecting big data.
The burden of building out a platform with custom tools and queries and patching together an infrastructure to connect channel-specific data sources falls squarely on the shoulders of merchants or information technology department heads.
It's a heavy burden to bear. But even if we have no simple solution, the SMB owner should put an oar in the water and start paddling. Much data that can lead to an increase in sales and profits can be harvested.
Customer data enables a merchant to identify patrons via their cell phones and credit card numbers, loyalty cards, and even their e-commerce profiles.
Retailers are selling merchandise to their customers online and in-store, and by catalog, phone, and other mobile devices. Some retailers have the data-collection infrastructure in place, but haven't yet gotten the delivery part down.
After they collect customer data, they are unprepared to take action to monetize the customer information they have collected.
Others have successfully turned to solution-integration experts to traverse the treacherous terrain of data collection. They have leveraged this information to increase sales, while providing a unique and interesting customer buying experience.
Everyone is fighting for the same slice of the pie, and merchants can get their fair share if they are armed with accurate data and provide customers the incentive to buy.
One aspect of big data that can perhaps be more easily within the reach of all SMBs is payments intelligence: information that often isn't mined, but that can be gleaned from payment-processing data.
Bala Janakiraman wrote compellingly about this in Internet Retailer: "The most un-mined, most valuable data available today is not floating around on the Web from website interaction. ... It's real, it's here, and it's found in the customer payments coming through checkout experiences everywhere, processed through the complexities of the 'card' business and returned to merchants, often listless, unstructured, and never acted upon, let alone optimized.
"It's called payments intelligence. ... It captures all that payments transactions tell us about the people behind the card swipes and card-not-present transactions." The article provides some good examples. If you're selling a product that's billed in three installments of $6.99, and someone buys with a reloadable, prepaid debit card with a balance of $14.19, that's information you probably want to have - actionable intelligence that could result in a prompt for a different form of payment.
Seen more broadly, the payments intelligence component of big data can help preserve and enhance revenue, while also reducing risk of fraudulent transactions.
Without doubt, a big, new data world has grown up around us. Being a small to midsize business doesn't give you a pass to ignore it.
Now, more than ever, merchants need to get with the program, starting with the more accessible aspects of big data, like payments intelligence. And that's only the beginning.
Rick Berry is the President of ABC Mobile Pay Inc., a Valencia, Calif.-based company specializing in providing affordable, software-as-a-service POS solutions. Rick can be reached at firstname.lastname@example.org.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.Prev Next