Recent news of Amazon’s plans to build a second headquarters has gained mass attention for a variety of reasons. In one respect, it could bring as many as 50,000 jobs to the chosen state. But for smaller retailers worldwide, it’s signaling the growing strength of an already formidable competitor. In fact, Forrester says that 83% of U.S. adults purchased from Amazon in 2016, and an estimated one-third of online retail spending is made through the primarily online player.
It’s safe to say that Amazon has e-commerce figured out to a (data) science. In an interview with Entrepreneur.com, Amazon CEO Jeff Bezos credited some of its success to the never-ending effort to give customers what they want before they know they want it. By investing in data-driven technology such as Big Data, the Internet of Things, artificial intelligence, and machine learning, the retailer’s customer experience is improved continuously through algorithm-enabled learning.
Despite all of this success, it doesn’t mean that smaller players are giving up. According to the Oxford Economics report, “The Digital Transformation Executive Study,” sponsored by SAP, 82% of small and midsize retailers are focusing their technology investments primarily on Big Data and analytics to gain the same kind of meaningful insights that Amazon uses.
The growing role of data primes small and midsize retailers for a competitive future
An overabundance of data may be impacting every industry, but retailers are in the eye of this storm. Consumers of all generations expect an entirely new shopping experience, one of limitless choices, fingertip access to information, convenient and seamless transactions, and transparent pricing. And if these new norms are not delivered, they will find another retailer.
The more consumers search, shop, and socialize online, the more data’s role in retail decision-making will mature. To stay competitive, retailers need to invest in strategic enablers such as:
- Digital IQ capabilities and skills across all aspects of the business
- Technology infrastructures that handle mind-boggling volumes of data and process it as quickly as it is captured
- Simplified and consolidated IT landscapes to free up maintenance costs and concentrate more on innovation
- Integrated data and business process platforms for faster adoption and scale
A common belief among small and midsize retailers is that acquiring these capabilities calls for a substantial investment in multiple technologies. However, this myth couldn’t be further from the truth.
Data analytics in the cloud: A retailer’s best defense
Through an affordable cloud subscription, retailers can access a range of analytics that turns data into a scalable ecosystem of shared intelligence and insight – all without hiring specialized talent or engaging in in-depth training to maintain it. In the meeting room, at the office, on the sales floor, or in front of a customer, retailers can discover, analyze, plan, predict, and collaborate with one integrated experience designed expressly for their business.
Every decision maker can access the data and embedded analytics they need to directly guide business processes to quickly take advantage of emerging opportunities and mitigating risks head-on. They can measure physical store and online sales, shopping behavior, consumer loyalty, and transaction trends in one view, which can be more meaningful than analyzing these metrics separately. And they can do so using the mobile device of their choice to maintain that insight wherever they are.
So as much as industry analysts and market watchers like to predict the doom and gloom of an “Amazon apocalypse,” smaller retailers that embrace data analytics in the cloud will know better. They will be the ones that do more than just survive this new competitive era – they will grow, expand, and maybe (just maybe) give Amazon a run for its money.
Read the Oxford Economics report “The Transformation Imperative for Small and Midsize Retailers,” sponsored by SAP, to find out how your businesses can benefit from implementing technologies such as data analytics.
This article originally appeared on Growth Matters Network.