How Big Data Has Changed the Shopping Experience

For week 7 of Intro to Digital Communications, we discussed big data — what it means and how it has transformed industries including sports, health care and, what I’ll be covering tonight, retail.

Big Data seems like a loaded term, but when my peers and I dissected it in class, we all came to a similar conclusion that big data is a fancy way of saying there’s a lot of data available to us, ready to be mined, analyzed and used, and all industries are finding interesting ways to do so.

When it comes to the shopping experience, retailers are tapping into big data, finding talented data analysts and scientists and leveraging what they discover, which ultimately provides retailers with a unique competitive advantage. In a Forbes article, writer Kashmir Hill details an incident when an outraged father stormed the retail giant Target asking why his young daughter received coupons and ads for maternity wear and baby products. Turns out, Target knew exactly what they were doing.

According to the article, “Target assigns every customer a Guest ID number, tied to their credit card, name, or email address that becomes a bucket that stores a history of everything they’ve bought and any demographic information Target has collected from them or bought from other sources.” A Target statistician analyzed buying data for women who were signing up for baby registries at Target — little did the outraged father know, his daughter was one of those women. But by leveraging data in this way, retailers are able to personalize the shopping experience for every single consumer based on their current interests or values.

Fifteen years ago, this kind of personalized shopping experience didn’t exist. When I say “this kind” I mean the personalized coupons in the mail, the advertisements of the last product you looked at that follow you on the Internet, and the list of product recommendations that appear on the side of Facebook, Amazon, Target sites and more. Not only that, but retailers are also using big data to alter customers’ shopping experience inside the store — not just online — by shifting the interior layout and design.

A New York Times blog post touches on this topic and clearly explains how this is done in retailers such as CVS and Walmart. CVS, for example, shuffled its products around after analysts looked at buying data and found that most customers who purchase toothpaste and floss also purchase beauty products; so, of course, you’ll now find toothpaste near the strawberry lip gloss. At the same time, CVS leveraged data to better understand the needs of its customers and found that frequent customers were those who visited the pharmacy a lot and the needs of customers vary based on geographic location.

While this new shopping experience is certainly convenient and, in some cases, fun, I have to mention that big data doesn’t come without risks. Think Target data breach, for example.

So, just be wary and the next time you enter your favorite retail store and wonder why the snack aisle is first or why the floss is next to the cosmetics, just remember: Big Data.

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