I was alarmed to read a piece in Retail Week entitled ‘Retailers are being blinded by big data’.

I was alarmed to read a piece in Retail Week last week entitled ‘Retailers are being blinded by big data’.

John Richards makes some excellent points about the difficulty of using simple models to predict consumer behaviour. We are, after all, people not robots.

The danger, however, is that the difficulties associated with grasping and using customer data and deploying CRM ‘systems’ gives the more (ahem) ‘traditional’ in the retail industry an excuse not to bother trying.

And that would be a crying shame. Putting the intelligent use of information at the heart of a retail business is not just something to leave to oddball geeks. It is the single biggest source of value for any retail business, and the most frequently squandered.

So if we are scared by big data, let’s just start with small data.

Consider this. A customer comes in and buys something from one of your stores. They’ve just told you some really interesting things – the area they live in, the kind of products they are interested in and the fact that they (at least occasionally) shop in stores.

The moment they leave the store, however, that knowledge is lost forever to you. You have no way to communicate with them again, and no chance to use any future purchases they make from your stores or your website to build up a more detailed picture.

It’s that simple. All the investment that big businesses make in CRM is really just recreating the personal knowledge of, and relationship with, individual customers that small local shopkeepers have had for centuries.

I hear too often the lazy assertion that CRM means spamming customers with lots of email messages they aren’t interested in. That’s roughly the same as suggesting that retail merchandising is about putting products in great big piles around the store. There ought to be more skill, and art, involved than that.

As retailers, we invest a huge amount of time and energy in trying to create retail theatre – building experiences in our stores and on our websites that customers will enjoy having and will want to come back to.

It is simply bizarre to do that without also building an opportunity to tell your most loyal customers about what you’ve done. Don’t forget, too, that our pureplay online competitors have built businesses entirely based on having rich customer databases at their heart.

So my conclusion for retailers? Don’t get bamboozled by complex technologies or expensive consultants, but at the same time don’t miss the opportunity that is right in front of you. Knowing your customer is the oldest and most important retail discipline.

  • Ian Shepherd is director of Barracuda Digital and specialises in supporting retailers in building senior digital and CRM leadership teams