Big data launching retailers into the next age

Via social media and other forms of widespread communication, the practices of private organizations are often criticized by customers. In the case of a retailer, informing the public of where the raw materials needed to make finished products are coming from is a necessary measure for maintaining a good reputation. In regard to their business, commodity-based companies utilize strategic sourcing to determine which companies can supply them with economically and morally favorable materials. 

According to Greg Holt, contributor to Retail Info Systems News, the capabilities of procurement software have expanded significantly over the past few years due to the rise of cloud computing and big data. Much to their surprise, some of the most reputable retailers around the globe have encountered potential cost savings in indirect spending. Store practices, distribution logistics, legal finances, marketing and other related services have offered these business the chance to reduce expenditures by applying appropriate analytics tools. 

The source cited an example in which a company collected 200,000 data points from its transportation sector. 14,000 highway lanes, 120 carriers and 188 bid characteristics per avenue contributed to the compilation. In order to troubleshoot potential financial issues the business may encounter, employees ran a spend management program to determine where cost-saving strategies could be incited. 

Relating to the customer 

Ultimately, consumers are the ones dictating where a merchandiser obtains its materials. Business Spectator reported that retailers are using big data analysis tools to track the purchasing behaviors associated with their products and relay the finished information to the logistics department. In turn, that branch of the organization runs a spend analysis program capable of identifying which items are driving the most revenue. As a result, the merchandiser can accurately determine whether there's a return of investment of the materials being purchased to create the products. 

A vendor management inventory could also be introduced to the data-harvesting capabilities of mobile devices. For example, if a retailer provides items to consumers throughout the United States, identifying distinct locations in which specific products are most popular will enable them to better supply distribution centers capable of catering to those customers.

Mobile data can also optimize the the merchandiser's resource chain. By providing on-dock employees with smartphones or tablets, near real-time categorization of the company's resources give executives a more accurate idea of which shipping ports are encountering the most activity.