How Digital Analytics is Creating Waves of Disruption in Retail
How Digital Analytics is Creating Waves of Disruption in Retail

The rise in digital adoption, consumer demands for convenience, and Gen Z’s increasing buying power have created waves of disruption in retail. Huge data is collected through online activity and social media platforms. To enhance shopper experiences, retailers now get to track the customer journey through various digital touchpoints. The data collected gives brands tools to understand shopping patterns and analyze demand. Such analytics is generating better engagement loops with customers, and retailers are steering their strategies on lighter feet, a new solution emerging to the problem of data deluge, but inferencing information scarcity.

Data is collected in myriad ways, from information services providers, by tracking social media, site reviews, blogs, online surveys, questionnaires and forms, discussion forums, sentiment analysis over phone and email interactions, through social groups, and one-on-one conversations. Some very innovative companies are using technology-enabled solutions that collect data passively from consumers, with complete opt-in and consent. Analysis of such data enables retailers to make better price judgments, plan customer-centric strategies, plan merchandise in advance by looking at trends and minimize gut feel from businesses. This leads to price optimization and customer centricity, which enhance the efficiencies of businesses.

Price Optimization

Digital analytics plays an important role in understanding demand and retailers can launch differently priced products accordingly. Through algorithms, it gets easier to track demand and respond to market challenges in real-time. Earlier retailers would just bring down prices when the demand season was ending, but now with analytics, retailers are able to generate better revenues even though the demand starts sagging, by offering gradual price reductions, or by discovering segments that still show demand. There are strong examples of demand/ supply gap-based pricing strategies that have been followed by the travel sector, which have been converted into generic algorithms, serving retail as well in an analogous format. Such price optimization plays a strong role with small-scale businesses which can use analytics optimally without denting their finances. Such data also helps in better pricing and product demand forecasts in sectors that were largely left to guesswork, for example, rural consumption. Nearly 40 percent of Indian internet subscribers are in rural areas, and marketers can thus reach products to them with a better understanding of their demand, optimizing logistics and delivery costs as well, as driving margins.


Spray-and-pray campaigns don’t work anymore. Moreover, as digital engagement matures, retailers find it harder to apply any guesswork. Merchant art or instinct that succeeded in the past is a poor predictor of market behavior now. Instead, retailers need to propel their approach using a customer lens. With data analytics, retailers have access to deterministic data, which facilitates better demand prediction, and can discover the highest return on investment opportunities. With better customization, there is also a churn rate reduction. Digital insights make it easier for retailers to determine a better way to improve their targeted campaigns and engage better with customers. The loyalty program of the future will create value for shoppers beyond just plain vanilla product discounts.


One size doesn’t fit all. The average digital consumer uses around 2-3 digital devices. Brands need to unify all customer data points and create a central repository for powering intelligent campaigns. However, a trust strategy holds the key to better engagement. There is an incredible amount of talk now in favor of privacy, liability policies, and intellectual property. There could be a data relationship management ecosystem too that includes data by consent and stringent security walls to curate more valuable and lasting engagements. This consumer side, as well as geopolitical development, has seen a resurgence of deterministic data collection with fully opt-in representative panel-based mechanisms in markets globally. 

Now the competition is not so much between individual retailers, but to get an edge, the retailer needs to build a wider network of alliances. Digital is now central to all businesses and the future of retail will be driven by faster responsiveness to market demands. To build businesses of the future, retailers will be relying on advanced analytics. The ‘Digital’ writing is on the ‘Physical’ wall!

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