One of the main reasons Amazon is so successful as an online retailer is its collection, analysis and use of data. According to a 2017 Retail Vision Study by Zebra Technologies, 73 percent of retailers rate managing big data as important or business critical, and 58 percent of retailers are budgeting for big-data solutions for storing and analyzing data. Other retailers realize this and may try to emulate Amazon’s success by developing their own data solutions, but the amount of resources required simply isn’t practical for most.
When delving into data analytics, there are two routes to choose from: developing the data solution in-house like Amazon or outsourcing to a third-party provider. Internal development takes time, not to mention having to start from scratch. Many companies that lack the technological resources or expertise end up doing everything manually, which is not sustainable in the long term. Meanwhile, outsourcing to a third party can provide a variety of tailored solutions but still has to fit within the budget.
There are plenty of arguments as to why retailers should outsource data analytics. Here are our top reasons:
Time and cost savings:
The time and money required to create a new analytics solution is usually more costly than selecting a third party with expertise in the field. Fully developing a working system inevitably means making mistakes along the way, which a provider has experienced and resolved before.
Instead of pouring resources into an in-house solution, there can be significant savings and allocation for other needs. Outsourcing means no need for recruiting, training, and maintaining a team of engineers and data scientists.
Retailers who turn to a provider don’t have to deal with the hassle of maintaining the solution or its infrastructure. Updating the solution with the latest algorithms and features is their job, with innovation motivated by competition in their own field.
Focus on the essentials:
Your company has been successful with its product or service. Why divert attention away from that, when you can remain focused on continuing growth and success? Outsourcing allows you to pay attention to the important decisions facing your business instead of getting data. Keep in mind that Amazon is both a tech company and a retailer, while most retailers are not. A third-party offering should allow you to easily analyze and visualize market data. Then you can do what you excel at, instead of juggling data analysis and platform development.
Accuracy and scalability:
Third-party solutions generally increase the accuracy of the data collected since they are designed with expertise. Along with that increase, scalability is easier to achieve as your company grows, since the vendor is focusing their resources on that challenge. With a paid solution, customer service is provided to cater to your data needs. New features can be requested without additional strain on your own team.
Choosing to outsource data analytics and market intelligence saves resources and allows you to focus on actual decision-making while improving efficiency, accuracy and speed. The benefits often outweigh the headaches of an in-house solution. But it’s important to find the right company to caters to your needs. Choose one that has proven results and a good reputation for accuracy and reliability.
Contributing Writer: Matt Chow