Are retailers ready to deal with ‘Gargantuan Data’?

Discussion
Oct 29, 2014

EBay’s modeling predicts the amount of data available from online commerce transactions will double every year in the near term and reach a point in 2020 where e-commerce sites will have the equivalent of 5,200 gigabytes of data for every person on the planet.

This prediction has prompted eBay — responsible for one out of every five dollars spent globally online — to discard the term "Big Data" in favor of a new tier of data volume, "Gargantuan Data," according to Gayatri Patel, the company’s director of data strategies. She spoke last week at Teradata Partners Conference in Nashville, TN.

Ms. Gayatri reminded the audience of the rapid transition physical stores and online commerce sites are undergoing in catering to the way customers want to do business with them. Her message was consistent with many other speakers at this venue. Simply put, with new systems and tools in place to capture every aspect of the transaction, database platforms must be built for scalability, centralization and rapid accessibility. She also underscored the notion that the lines between e-tailers, such as eBay and Amazon, and physical stores, such as Nordstrom, Best Buy and even entire shopping malls, are indeed blurring.

To eBay’s advantage, the company collects store and model data not just from eBay’s buyers, but also from sellers. EBay is smartly leveraging the data it receives about its sellers by creating business relationships designed to grow each partner’s business in a mutually beneficial way. Driven by shopper priorities, eBay has begun partnering with an increasing number of very notable brick-and-mortar retailers and in some cases actually directing shoppers to a physical store for a particular item if the shopper is in the area and ready to buy.

Another impressive example of a structured partnership with physical retailing was demonstrated by successful implementation of Digital Store Fronts in selected Westgate Malls. Mall shoppers simply touch a storefront screen to scroll and find the merchandise they are looking for and order it for home delivery. The retailer in this case receives the advantage of the mall traffic but spares the expense of having physical inventory on site.

EBay is moving rapidly and has a solid strategy for growth. Its growing relationships with physical retailers reflect confidence it will continue to prosper if it lets the shopper dictate the products and services it offers. It will be very interesting to see if others attempt to follow this model of collaboration.

Are retailers, generally speaking, prepared to deal with the increasing amount of data they receive? What lessons can be learned from eBay’s data usage and mutually beneficial relationships with its sellers?

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12 Comments on "Are retailers ready to deal with ‘Gargantuan Data’?"

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Ralph Jacobson
BrainTrust

Every day we create 2.5 quintillion bytes of data, so much that 90 percent of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather shopper information, posts to social media sites, digital pictures and videos taken in-store, retail purchase transaction records and mobile phone GPS signals to name a few. This data load will only continue to increase over time.

Are merchants ready for this? They better be—it’s happening as we speak. I think there are great examples, including the ones in this article, of companies leveraging data for their benefit and for their partners’. A lesson to learn is that data is varied, it’s growing, it’s moving fast, and it’s very much in need of serious, intentional management. Data and shopper engagement are energizing organizations across multiple industries (retail, CPG, wholesale distribution, etc.) and present an enormous opportunity to make organizations more agile, more efficient and more competitive. In order to capture that opportunity, organizations require a modern information management architecture. That’s the starting point for most merchants.

Mihir Kittur
Guest
I am not sure if anyone is really prepared to deal with this volume and variety of data, and I am not saying it in a negative way. It’s just overwhelming. As more physical objects begin to participate in the internet of things, I guess it’s just the beginning. That being said, progressive retailers like eBay are definitely ahead of many retailers. Their investments in and appreciation of the benefits data and analytics in areas like demand intelligence, seller intelligence, supply intelligence and tying this all together is and will definitely give them a lead. I fear there will be more pressure on more traditional retailers on account of dominance of marketplaces like eBay, Amazon, Alibaba, Rakuten, Staples, Sears, etc., as these marketplaces are in the best place to leverage such intelligence and act on it quickly. Look at it another way, the ratio of SKUs to merchants is just going to increase exponentially. There is no other way out besides leveraging this humongous data using analytics and smart recommendation engines. Interesting times ahead whether it is called Big Data or Gargantuan Data. What’s definitely in store (no pun intended) is the need for investments in smart analytics to play… Read more »
Ryan Mathews
BrainTrust

In general, the answer is a simple: No. After all, they aren’t dealing with the data they currently have all that well.

As to the second question, the answer is that data has tremendous potential to change retail effectiveness, but not unless it is properly analyzed and acted on.

Bill Davis
Guest

No. The skills to manage this are ones that are hard to come by and demand is high across industries such as high tech, life sciences, etc. When demand exceeds supply, supply will look for the best opportunities, and that generally hasn’t been in retail.

Gajendra Ratnavel
BrainTrust

The Westgate Mall is a great example of how online technology can greatly impact in-store. We’ve created some really powerful solutions for retailers for both the store front and inside. Not just order online. The beauty of these systems is that they go far beyond order in-store and deliver to your home.

  1. Pack and hold in-store for pickup on their way home.
  2. Call back for out-stock if they don’t want it delivered.
  3. Data collection.
  4. Gift registry, wish list creation.
  5. Scan product bar code instead of pick from screen.
  6. Enhance loyalty programs.
  7. Change room display for communication with sales agent for size changes.

The list goes on. The point is, online technology in-store is very powerful when done right. Unfortunately, as with many technological improvements in retail, we experience slow adoption.

Alan Lipson
Guest
Alan Lipson
2 years 10 months ago

Generally speaking retailers are not prepared to deal with the volumes of data they are receiving today, so having more in the future will be even harder to deal with. Having said that the important thing is to have the resources to store the information so that as they build their capabilities they have the data to analyze.

Many retailers are still struggling with the concept of what to do with Big Data. It is important that retailers begin with easily-definable projects so that they can learn how to deal with the data management issues and develop an analytical culture.

By leveraging the data and sharing their analysis and results with their partners, eBay is helping to drive products and solutions that ultimately are what the consumer is asking for.

The leaders in the use of big data are those that recognize the value to be obtained by looking for insights that help them improve their operations, identify consumer trends and ultimately provide value to their consumers.

Lee Kent
BrainTrust

Are retailers prepared to deal with all this data? Nope, not all of it! Should they be? Therein lies the the real question.

In this world of data, data everywhere, it is impossible to get your hands around all of it and very impractical. Retailers must first look at their brand story and translate which data drives what part of the story.

If you are eBay, the brand is all about transaction volume. The more transactions, the more fees received. Of course they would want to leverage their relationships with sellers. That speaks directly to their business model.

But if I’m Macy’s, which angles of the data will drive my business model?

So, in my book, it’s not about the increasing amounts of data, it’s about determining which data is the right data. Every retailer should be asking themselves this question and then, yes, they will be prepared to handle the data they need.

… And that’s my two cents.

Camille P. Schuster, PhD.
BrainTrust

Processing capacity and asking good questions are the biggest issues to confront when confronting the increase in the amount of data. Big data is not a useful term in today’s environment. There is just data and the amount available will continue to increase. Using the data is the major issue. Figuring out what questions will create insights that allow for creative partnerships and activities that connect with consumers.

Ed Rosenbaum
BrainTrust

It sounds like more data means more availability for hackers to do what they have already done to Target and Home Depot. “Houston, we have a problem.”

Naomi K. Shapiro
Guest
Naomi K. Shapiro
2 years 10 months ago

Are retailers prepared to deal with the increasing amount of data they receive?

1. No – (and) they aren’t dealing with the data they currently have all that well. (As Ryan’s answer succinctly states).

2. Data has tremendous potential to change retail effectiveness if it is properly analyzed and acted on. (Also stated succinctly by Ryan).

3. It doesn’t matter whether you call it “Big” Data or “Gargantuan” Data. It’s big, and growing exponentially, but the name doesn’t make a difference.

4. Don’t be fooled into thinking it’s just a problem of collecting, managing, and analyzing your own data. To have a true picture of the real real-time marketplace, and to make the wisest decisions for price optimization as well as product assortment, you have to be aware of, analyze, and act on your competitors’ transparent data as well.

Doug Garnett
BrainTrust

We’ve suffered for years from online claims that data will reveal all. In fact, the argument has become so common that articles like this get picked up quite easily. But is there deeper truth missing here?

Online data’s beauty comes when the entire consumer experience lives within the online experience. The minute anything else steps into the equation, online data’s value drops by a considerable factor. In other words, if there’s any offline activity, online’s data value is a fraction of what’s claimed for it.

So, it’s great that eBay is able to use this data well. But they exist in a rarified (and extraordinarily limited) world. Retailers need to be cautious because their world is far messier, complex, and much more subtle to control.

Listen to this a bit to see if there are interesting limits. But we’re already suffering at retail from people who believe big data reveals far more than it does. I’d be careful to avoid this “gargantuan data” concept.

Larry Negrich
BrainTrust

The gargantuan amount of data is a potential advantage for retailers, rather than an overwhelming tsunami that will tear apart existing systems and processes. This amount of data will give inquisitive, analytically-focused retailers the ability to better understand customers, products, channels, and suppliers and to use the understanding to make better decisions. Systems, processes, skills, and management will all need to continue to evolve in order to leverage this data opportunity but all are available and some assets are getting cheaper (processing power, storage, etc.).

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