Big Data

Eradium omnichannel glossary Big Data

Big Data

Big Data is a term used to describe a massive volume of diverse data, both structured and unstructured, that is so large and fast-moving that it’s difficult or impossible to process using traditional databases and software technology. In most enterprise scenarios, the data is too enormous, streaming by too quickly at unpredictable and variable speeds, and exceeds current processing capacity. (1)

How Retailers Are Using Big Data (2)

1. Recommendation Engines

This is one of the classic use cases of big data tech in retail (albeit mostly in eCommerce settings). Based on a customer’s purchase history, and the histories of others like him, what is that customer likely to purchase next? By training machine learning models on historical data, the savvy retailer can generate accurate recommendations before the user leaves the Web page.

2. Customer 360

Companies in lots of industries would like to have a 360-degree view of their customers. Considering how many customers a retailer must interact with, and how many data sets are involved with getting there, big data technology and real-time processing is critical to making that happen.

3. Market Basket Analysis

Market basket analysis is a standard technique used by merchandisers to figure out which groups, or baskets, or products customers are more likely to purchase together. It’s a well-understood business process, but now it’s being automated with big data.4. Path to Purchase

4. Path to PurchaseAnalyzing how a customer came to make a purchase, or the path to the

Analyzing how a customer came to make a purchase, or the path to the purchase, is another way big data tech is making a mark in retail.

5. Social Listening for Trend Forecasting

As a retailer, if you’re not at least listening to social media at this point—let alone actively engaging with them on Instagram or Twitter–then you’re missing out on a slew of free and potentially invaluable information that can help you spot trends.

6. Price Optimization

Having the right price on a product can mean the difference between making a sale and losing a customer. But what is the right price? That’s the million-dollar question merchants have struggled with for millennia. But retailers who approach this problem with big data tools may have an advantage over those that don’t.

7. Workforce and Energy Optimization

What’s the single largest cost for retailers? If you said “labor,” then give yourself a big red star. While it’s true that big data tech can deliver benefits on the marketing and merchandising side, it can also help big retailers optimize their spending on human capital, which can have a sizable impact.

8. Inventory Optimization

Inventory optimization is a complicated thing that touches many aspects of the consumer goods supply chain and often requires close coordination among manufacturers and distributors. But with the rise of omnichannel fulfillment, retailers are increasingly looking for ways to improve the availability of in-demand products.

9. Fraud Detection

Retail fraud is a huge problem, accounting for hundreds of billions of lost dollars every year. Retailers have tried every trick in the book to stop fraud, and now they’re turning to big data tech to give them an edge.

How the big-box retailer Costco solves the customer safety issue with Big Data

Costco needs no introduction as the big-box retailer with free food samples, to-die-for food court, and excessively large toilet paper packages. Most people know this. However, most people don’t realize just how active Costco is in the big data game. Every purchase by every customer is tracked and meticulously recorded by the giant retailer. Costco uses this information for a variety of purposes. One practical use is to contact customers in the event of product recalls or other safety concerns about purchased items. For Costco, it was a recent fruit recall by a California-based packaging company.

What Went Right

Following the recall, Costco immediately went to its records to determine which customers had purchased the tainted fruit. Within 24 hours Costco knew which customers were potentially affected by the recall. Phone calls and emails began to be issued to customers, and what normally is a retail nightmare turned into another opportunity to strengthen customer loyalty. Customers praised Costco’s response to the situation and expressed appreciation for the effort. Maybe big data is a miracle, turning a product recall into a point of praise. Whether or not this is considered creepy, you can sleep well at night knowing Costco has your back with the help of big data.  (3)


  1. Big Data Analytics,
  2. 9 Ways Retailers Are Using Big Data and Hadoop,
  3. Can Big Data Save Retail? Good and Bad Examples of Using Big Data,