It should come as no surprise that retailers have always generated plenty of their own data, both in-store and throughout the supply chain. But data is just data. It isn’t the same thing as information. Such large data sets are discovered gold mines but are not malleable into anything concrete until retailers bring in powerful analytics which processes this data into meaningful insights. Insights are embedded along the customer journey and can give brands a competitive advantage to understand purchase intent, channel preferences of consumers. It also provides insights on relevant content and messaging that will be most apt to encourage consumers to move along the journey.
A new Alteryx and RetailWire survey of nearly 350 retailers and brand manufacturers showed that 76% of respondents consider shopper insights and enabling analytics, critical to their business performance. And yet, only 16% consider their organizations are ‘experts’ in using shopper insights.
Research tells us that organizations that leverage customer behavioral insights outperform peers by 85 percent in sales growth and more than 25 percent in gross margin. ( Source: Alteryx.com)
How Retailers can get the most out of their data!
Personalization is the key to showcase a customer that they are important and relevant to retailers. For this, retailers first need to understand their customers by collecting their internal 1st party data and combining it with rich 3rd party data sets, both offline and online. Retailers should then strive to bring several data sources into one single platform; else, the result is more akin to separate businesses operating at individual levels. The data thus collected in various formats can be stored in a Data Lake or data warehouse which acts as a centralized unified repository. The next step would then be to process the data & apply analytics around it to generate value.
All of this requires having the right tools, software, and systems that can gather and present data in a clear and organized way. Retailers can harness technologies like Data Science & Big Data Analytics to discover hidden patterns, market trends, and consumer preferences. Of-course this requires getting the basics of analytics right. You can’t really build a tower without a solid foundation. Make sure your base KPI(s) are well defined and then you have identified the KPI(s) that require a deeper dive for an ideal value proposition. Based on the combination of structured and unstructured data and effective use of the tools retailers can evaluate the most effective route to sales boost and customer engagement.
Once the data has been analyzed and insights have been gathered, the results need to be communicated across channels and displayed to the user. This requires data, applications, and systems across the IT landscape to be integrated. There are great solutions in the market, delivering amazing Omni-channel experience. All of this brings us to one very important piece of the puzzle – ‘Integration’. Accelerators like AURAS; a best-of-breed can help enterprises deliver Omni-channel experience & business agility.
Also, using comprehensive dashboards with multiple tools integrated can help retailers visualize and share progress on all the KPIs, identify consumer patterns, combine multiple data sources and find the correlations necessary to make critical decisions.
Why Analytics has to be tread cautiously
- Kmart (one of the largest retailers in the United States) is a great example of why simply implementing a new business intelligence system alone is not enough to succeed in business analytics. Kmart’s inability to analyze data and understand product trends and manage inventory levels eventually resulted in poor customer experience. It couldn’t capture the market trends through business analytics and research; it ended up offering several low budget designer goods (Jaclyn Smith designer apparel) paired with more high-end appliances (IE: Kenmore appliances) with no clear concept on how to cater to a specific target market.
- Analytics requires a lot of data. Agreed—but is everything necessary? Probably not. OfficeMax, an American office supplies retailer, sent a letter to a certain Mike Seay in Illinois; however, the contents on the letter were not called for. The letter was addressed to “Mike Seay, Daughter Killed in Car Crash.” Seay lost his daughter in a car accident almost a year ago. And sadly, just before leaving his home to attend a counseling meeting for grieving parents who lost their kids, he received this letter.This incident raised several debates about how companies use data and if data is checked before running analytics programs on them.
To maintain a competitive edge in a fast-growing marketplace, it is becoming increasingly necessary for retail companies to look for proactive methods of harnessing new and extensive data sources in unique ways. Along with that, it is crucial to set up the right systems and ensure seamless integration in real-time. In a nutshell –we seem to be heading towards a time which may be envisaged as the best time for retail, or rather, intelligent retail.
The article has been penned down by Abhishek Mahajan, Sr. Manager – Retail, Aspire Systems