Most retail executives (62 percent) surveyed believe leading retailers will capitalize on big data’s competitive advantage in the next five years.
While retailers are facing challenges in delivering the reporting functionality that business users need to enable data-driven decision making, they are optimistic about big data’s ability to provide breakthroughs in analysis capabilities across a number of retail processes, according to a survey conducted by uSAMP and sponsored by big data analytics firm 1010data.
For the study, 201 U.S. retail executives were interviewed across a range of retail sub-segments including grocery, drug, specialty, discount, department store, restaurant, and hospitality.
Most retail executives (62 percent) believe leading retailers will capitalize on big data’s competitive advantage in the next five years.
This was followed by 18 percent of executives who believe retail is already there, and 15 percent who said that big data would reach its potential by the end of 2014.
In fact, almost all surveyed executives (96 percent) agreed that big data initiatives are important in helping retailers stay competitive, with big data insights most beneficial for merchandising (53 percent) and marketing (48 percent), followed by store operations (42 percent), e-commerce (42 percent), supply chain (27 percent), finance (23 percent), and loss prevention (21 percent).
"This study shows that while the retail sector is being impacted by big data today, there are still many more opportunities for retailers to use big data analytics to optimize demand forecasting, merchandising, promotions and loyalty program management," Sandy Steier, co-founder and CEO of 1010data, said in a statement. "When retailers truly embrace data discovery, they quickly move beyond intuition and guesswork and instead rely on data-driven decision."
While executives are starting to acknowledge the competitive advantages of big data, nearly half of the respondents (46 percent) agreed that retailers require a better understanding of how big data can advance their business.
In addition, all but a few (7 percent) respondents indicated that they perceive retailers as holding out on using big data. The need for a reduction in the cost and complexity of implementing big data was the most-cited reason (42 percent) for holding out.
The need for simplified big data solutions that are intuitive to business users (30 percent) retailers challenged with basic business reporting and not being ready for big data (22 percent), the need for big data solutions to better address the needs of retailers (21 percent) and a better time to value for big data (17 percent) were other top issues for retailers adopting big data initiatives.
Despite the retail industry’s perception of obstacles, executives said they believe that big data can have a positive impact on business processes, with targeted offers and promotions receiving the greatest benefit (50 percent), followed by demand forecasting and supply chain modeling (49 percent), customer-centric marketing (43 percent), loyalty program management (35 percent), workforce management (28 percent), store design (18 percent), and loss prevention (16 percent).