The amount of data created in the world is sometimes astounding. For instance, consider Rutgers University professor Michael Lesk's estimation that 12,000 petabytes of information - including online and offline media - existed in the world in 1997. This may seem like an impressive number at first glance, but Lesk also contended that storage technology would advance so rapidly that the world's ability to store that data would outpace the amount of information created.
Additionally, the world's rate of data creation has expanded considerably in the past two decades. For context, North America generates approximately 7,000 petabytes of data in Web traffic each month, according to The Global Information Technology Report 2013, or enough information to outpace the entirety of the world's data in 1997 within two months.
What is more important than the sheer volume of data, however, is the way that companies can use it to derive value. A wide range of industries have benefited from analytics in recent years. The healthcare sector, for instance, has adopted analytics alongside the growth of electronic medical records to improve diagnosis accuracy and expedite patient care. Marketers and sales teams have long used the technology to better understand their target audiences. However, there are a few caveats traditionally associated with collecting and using information for these purposes, with one of the most prominent being data security and privacy. Especially in light of the National Security Agency's PRISM program and major data breaches in the retail sector, consumers and businesses alike have raised concerns regarding how safe their information is.
How companies are building trust and providing value
Leveraging Big Data and analytics to benefit the consumer: Organizations can continue leveraging the large volumes of data they have at their disposal, but they must ensure that their customers' perceptions do not turn negative. One key ingredient to fostering this trust, according to a recent IBM study, is clearly showcasing the value that customers receive in exchange for their information.
"Today's consumer has been conditioned by multiple industries - from healthcare to travel - to expect personalized interactions across different channels," said Jill Puleri, IBM Retail Global Industry Leader. "IBM's study shows consumers are willing to share details about themselves, particularly if they receive a personalized experience in return. It's imperative that retailers enact a Big Data and analytics strategy that ensures they use consumer information wisely, gaining their customers' trust and loyalty by providing value in exchange."
Ensuring consistency in an omnichannnel environment: One key value for businesses to support is the ability to engage and maintain consistency in an omnichannel environment. Personalization and convenience in particular can make customers significantly more willing to divulge personal information. For instance, IBM identified several important omnichannel capabilities, including:
- Allowing items bought online to be returned to a physical store
- Ability to track order status
- Allowing customers to have out-of-stock products shipped to the store
- Pricing consistency regardless of channel
- Consistency in product assortment
Optimizing for mobile devices: The way in which customers utilize different technology platforms should also influence campaigns. For example, 40 percent of shoppers use mobile devices to gather information, but these individuals are less likely to make purchases. This suggests the need for value- and education-centric initiatives such as price comparison applications for mobile devices.
Protecting the consumer: At the same time, transparency in how any personal data is used will likely be key to ensuring that customers feel safe in providing contact, shopping preference and other information with organizations. Additionally, it will become more critical to thoroughly vet partners such as cloud service providers, payment processes and outsourced IT services to ensure they follow best practices regarding data security - the retail sector in particular has been in the spotlight with news of high-profile data breaches affecting millions of customers.
Enhancing both in-store and online shopping experiences: Brick-and-mortar stores and e-commerce businesses had a contentious relationship in 2012, during which the "showrooming" trend was prevalent. This involved potential customers visiting a physical location to try out and see products before then leaving the store to buy it online for a more affordable price. IBM's study found that while rates of showrooming increased in 2013, the number of purchases that resulted from the practice actually declined - meanwhile, 70 percent of online sales were made from users that started their product search on the Web.
The growing prominence of showrooming has led many traditional retailers to invest in e-commerce and mobile shopping solutions to meet expectations for a multi-channel experience. For instance, department store Macy's offers an official shopping app that helps users find information and alerts potential customers regarding in-store deals.
Innovations like these can be valuable when implemented effectively. However, the increasingly connected customer is setting the bar much higher in regard to consistency and customization. Shoppers looking for deals increasingly want those savings regardless of whether they're walking through the aisle at a physical store location or surfing product categories online, making it essential for businesses to be able to track order and pricing information and easily update that data across all channels.
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