17 Feb Predictive data: the future of retail
Don’t fear the future, predict it. This is everyone’s dream, isn’t it? Predicting footfall, demand, level of inventory or breakdowns becomes a reality thanks to Predictive Data. It had been a hot topic during the National Retail Federation (NRF) ‘’Big Show’’ this January and we have not heard the last of it.
Predictive Data is changing online and offline shopping experience as the technology enables retailers to forecast demand, set up more sophisticated prices and anticipate customers needs to bring the right product faster.
This new generation of data can be used in any industry (restaurant, banking, fashion, grocery and others) and for many purposes. It goes from synchronizing volumes production with seasonality to leveraging consumer sentiment with a more personalized offer.
Amazon has been precursor in this area with the acquisition of an “anticipatory shipping” patent in 2014. This system will enable Amazon to deliver products to customers before they place an order. Based on its customers knowledge as well as external factors, Amazon will send products to its hubs, where they expect products to be sold. The second possibility will be to send directly to a customer if they are almost 100% sure the customer will buy the product.
A white paper released by the transportation management software provider GTG Technology lists the positive effects of anticipatory shipping such as reducing delivery times and amplifying customer’s loyalty. Nevertheless an algorithm is not capable to predict what a customer will buy with a 100% accuracy and those inaccuracies in the system might cause logistical nightmares and costly returns. Also it seems legitimate to wonder if people will appreciate receiving a product they have not decided to pay for (yet).