Umit GumustenBig data, huh? You think you’ve heard that term thrown around you quite a lot, especially over recent years. It sounds kind of scary, especially if you happen to be running a small business. Perhaps it makes you say, “Isn’t big data just for huge corporations or tech giants?”
The Answer is: No!
Big data actually holds immense potential even for small businesses. No matter if you are a local retailer, artisan exporter, small manufacturer, or wholesaler willing to expand: Big data will unlock new avenues for growth you never thought of.
Big data essentially means huge sources of data across different platforms: social media, customer relationships, sales, website traffic -just about anything one can imagine. In simple terms, big data refers to massive flows of information sourced from multiple sources -social media, customer interactions, sales, website traffic, and the like.
With the right tools, this information can be analyzed to uncover trends, customer behaviors, preferences, and even future business opportunities.
In brief, big data would be like a magnifying glass whereby small businesses could visualize opportunities and challenges that might not be immediately obvious.
Now, in detail, let’s take a closer look at how big data can grow small businesses through various industries, locally and globally.
Knowing Your Customers Better Than Ever Before
The customer in any business is always the king, whether it’s a business dealing in coffee or one selling handcrafted jewelry.
But how well do you know your customers?
Gone are the days when businesses relied solely on face-to-face interactions to understand their customers’ needs. Today, customer data is scattered across multiple touchpoints: online searches, social media activity, purchase history, feedback forms, and even product reviews.
Suppose you are a small exporter of handmade leather goods and ship to various countries around the world. You have recognised that sales coming in from Europe are on the rise, while those coming from North America are not as great.
In this situation, mining customer data can help you develop targeted marketing campaigns for various regions. Maybe European buyers really appreciate style or color not envisioned to be as successful there.
Big data will help you sort this out and make the required adjustment.
The same goes with local businesses. Be it a small retailer, the data from loyalty programs, e-purchases, customer surveys-all go a long way in helping them know who their customers are: at what time of day are they shopping, are they more likely to buy during a sale, do they respond more to email promotions or social media ads? With answers to these questions, you can tailor your offers and marketing for more effective engagement and sales.
Operational Efficiency
Any businessperson will tell you that inefficiency is expensive. From overordering on stock that sits in a warehouse to hiring extra staff to float during a slow season, these are the kinds of mistakes that erode profit margins. Big data lets small businesses optimize operations in ways they never could before.
Suppose you are running a small manufacturing company producing eco-friendly cleaning products. You will have to source raw materials, manage the inventory, and ensure that production goes well. Using big data can help you track each stage of your supply chain.
You may find, for example, that the same suppliers are frequently late with their deliveries or that other products sell a lot better in certain months. You could, this way, be able to better negotiate contracts, shorten the delivery times, or shift your cycles of production according to real demand.
But retailers can benefit from it as well. Big data can assist a small clothing store in analyzing foot-traffic data and sales records to identify the best hours of operation or what items they should push in certain seasons. All this trend simply means you can streamline staffing and inventory, saving time and money.
Targeting the Right Audience Through Marketing
Marketing, on the other hand, is a bit hard to do appropriately for many small businesses due to their budgetary constraints.
How do you ensure that your marketing dollars are well spent?
Here begins the role of big data. By tracking customer behavior online, through the analysis of social media interaction and past campaigns, small businesses will fine-tune a strategy to reach out to the right audience.
Take, for instance, a small-scale artisan exporting handmade ceramic items globally. They may have used trade shows or word of mouth to find customers before, but today they can trace with Google Analytics or social media where their online traffic is generated.
It may be that they sometimes know they get a lot of visitors from Germany, but then usually fail to convert them into customers. Perhaps they have a language barrier, or perhaps their site does not show delivery options to Europe.
It is pieces of insight like this that enable businesses to tailor marketing in such a way that can help them optimize their conversion rates without any investment in broad and inefficient campaigns.
For even local businesses, targeted marketing is a necessary component. Say you own a bakery right in the middle of downtown and wanted to leverage granular data from such places as Facebook ads, Google reviews, or even the weather to create hyper-niche promotions.
Is business stronger during colder months? Run hot chocolate or coffee specials. Do you receive more traffic after 5 pm? Offer a discount on pastry items for customers that stop in after work.
Rather than taking a guess, you are making calculated decisions to better market your business.
Predicting Future Trends and Customer Demands
It’s a game-changer to be able to anticipate what customers want, sometimes even before they themselves know. Predictive analytics -mining big data- allows businesses to forecast what customers will need and stay way ahead of the competition.
Think of a small wholesaler of electronics. They have studied purchase data for a couple of years and observe that a month or two immediately following the release of new smartphones, sales for certain tech products -say, wireless headphones- reach a fever pitch.
They could then use this information to stock those products just in time for the next big smartphone launch, ensuring they meet demand and capture more market share.
Besides, the trends will also benefit the retailers. Suppose you have a small cloth boutique. You can stock your store with the most in-demand style even before it hits mainstream popularity by tracking the trends in customer purchases, social media likes, and even partnerships with influencers.
This proactive move will make you hit differently and become the trendsetter in your niche.
Expanding Your Market Domestically and Internationally
Big data will also help small businesses reach beyond their immediate market one of the more interesting features of big data. Whether you are simply a domestic business trying to expand throughout the country or are a small manufacturer trying to reach an international market, big data will inform your strategy.
Assume you are an exporter of organic beauty products in some small country. You have traditionally sold in your domestic market but are considering expanding into Asia or the Middle East.
You could research global trends in purchasing and consumer preference, and even local competitors positioned for those new markets. Perhaps skincare products with certain ingredients resonate with Asian consumers, whereas organic and fragrance-free skincare options would be more appealing to a Middle Eastern customer base.
Big data can give you these insights, enabling you to refine your product offering even before entering a new market.
Big data will also enable any small domestic business more easily to expand into new cities or regions.
Imagine you own a few restaurants and would like to open another outlet. By analyzing the competition data, foot traffic as well as local demographics, or even the trend of delivered food, you can decipher which location is most beneficial for your business.
You will use real data instead of trusting your gut feelings.
Smarter Pricing Strategy
One of the trickiest parts of running a small business is setting prices. Price your products too high, and you’ll scare customers away. On the other hand, price them too low, and you will be unable to earn decent profit margins. Big data enables small businesses to put in place better pricing strategies.
Take the example of a small furniture retailer. They can apply big data to monitor the prices set by their competitors, the demand from customers, and even the regional economic conditions to set a competitive price yet yielding.
Using data analytics lets them know when customers are more likely to pay a full price and when they are most likely to wait for sales.
In that way, they can offer dynamic pricing or run some form of special promotion at the right time, which increases sales without cannibalizing any profit margins.
On the manufacturing concerns, knowing raw material costs and demand fluctuations can aid in terms of pricing. In case a small jewelry maker knows the price of silver is about to increase, then they could either lower their prices or stock up on materials prior to the price rise taking place, thereby protecting their margins.
Customer Experience Personalization
By now, all of us have experienced this: we log in to an e-store and find the recommended products greet us as if they were just for us. That’s magic, powered by big data. And the small business can do the same to create customer experiences that are personalized, even without an Amazon or Netflix-size tech budget.
For instance, a small online bookstore can analyze customers’ past purchases, their browsing history -even their wish lists– and recommend books they are most likely to purchase.
Personalized email marketing can be a strong tool here. If you can segment your customer base by interests and behaviors, it will give you the right selection of offers and content for sending them emails, thus generating more engagement and sales.
Even small brick-and-mortar businesses can apply personalization. For example, if you operate a local café, you may use customer buying history via a loyalty scheme to send them personalized discounts, or even simply personally greet regulars by name and remember their favorite orders. These little things will go a long way in improving customer loyalty.
Managing Risks
No business is completely free of risk, but big data allows you to reduce that risk. Whether it’s anticipating seasonal slowdowns or predicting market changes, analytics give you a clearer picture of what’s ahead and how to prepare for that event.
Take the small exporter. If geopolitical tensions or fluctuations in a key market are about to rise, big data will help prepare for this. By analyzing the shipping data, exchange rates, and even political trends, the business will be able to readjust its strategy perhaps by diversifying its markets or locking in more favorable contracts before things change.
It can also help small retailers and manufacturers predict future demands to be ahead of overproduction or stockouts. This would allow them to prepare for busier and quieter months of the year and be well-prepared for the steady flow of cash from one year to another.
Small Business Tools and Platforms
You might say now, “This sounds so good, but how do I tap into big data as a small business owner?” The good news is that there are many affordable tools and platforms that exist for businesses of any size.
Google Analytics: This is almost a no-brainer if you have an online presence at all. Google Analytics allows you to make sense of website traffic, customer behavior, and the effectiveness of marketing.
Tableau: Tableau is an extremely powerful data visualization platform that steers businesses of every scale towards better analysis for insights.
Zoho Analytics: Another user-friendly platform offering data analytics solutions, particularly to small businesses, through customizable reports and dashboards.
Salesforce: As famous for CRM, it is equally adept at bringing in data-driven insights that help you manage customer relationships way more effectively.
All these, among many other platforms, make big data accessible without needing a degree in data science or a massive tech budget.
Bottom Line
Big data isn’t just for the likes of Amazons and Apples. Big data is one such potent tool that enables small businesses -be they local retailers, small manufacturers, or emerging exporters- to realize growth and thrive in today’s competitive market.
From understanding your customer and optimizing operations to expanding into new markets and managing risks, data-driven insights can help you make smarter decisions and set your business up for long-term success.
So, big data is not something you should be running away from; big data is something you should embrace so that your small business may reach new heights!
