Data is the latest in a series of changes that seem to have rocked the retail landscape regularly since consumers began to research and purchase products online. Successful retailers have always used data to make business decisions: what has changed is the amount and types of data available, and the tools available to retailers to collect and make use of this valuable commodity.
Businesses can leverage the new powers provided by data to see through organizational walls into your competition’s inner working, to see customers as individuals in a practical sense, to see opportunities for greater efficiency throughout the supply chain, and to see what effect—if any—your marketing is having on potential customers.
An IBM survey shows 62 percent of retailers report a competitive advantage from using information and analytics. Further, the 2017 Retail Trends and Predictions report from Vend says performance benefits are driving retailers to apply data to all parts of the retail process.
See Customers Differently
Online data services can literally put names to the faces of your customers. Its real power, however, lies in associating that particular individual with tastes and tendencies, allowing retailers to tailor their messages and present the most compelling offers for that individual.
Personalization is identified as an ongoing trend in the Vend report, which refers to Accenture research showing that over half of customers are more likely to shop in store or online at a retailer that recognizes them by name. The report says that targeting customers with content tailored to their data, such as purchase histories and location tracking, is an opportunity for even smaller retailers. This can mean promoting products to the people who are most likely to buy them, and additional uses like personalized incentives programs can be built with the same data.
The number of consumers willing to share information and preferences with retailers increased from one in three to over half from 2014 to 2015, according to Accenture, a clear sign of the growing preference for personalized retail experience.
See Competitor Inventory
Having access to sales and inventory data from competitors can provide retailers with several advantages.
Services like Amazon Seller Tool Amzpecty are available that provide retailers with price trends and sales data from other retailers. Amzpecty estimates each seller’s daily sales, and detects major adjustments in their inventory.
If a competitor is consistently selling significantly more of the same item, there is a reason why, and knowing that reason can enable the retailer to make an informed adjustment to increase sales. If a competitor suddenly orders a huge quantity of a certain product, it is likely in anticipation of increased sales—identify why they anticipate this, and adjust your inventory or marketing appropriately, based at least in part on the picture of your market provided by data analysis.
See the Future (or Close to it)
Using constantly refreshed data on current trends, historical sales, and other factors allows retailers to predict demand with striking accuracy. Russian booksellers ramping up advertising in anticipation of a cold snap and clothing company Patagonia minimizing waste with inventory efficiency based on demand prediction are examples of this principle in action.
Retailers can create trend-forecasting algorithms with Hadoop, an open source big data software platform, or can outsource to a data services company. As far back as 2013, half of the Fortune 50 were using Hadoop to process data. Predictive survey platform Prediki uses data analysis to provide the marketing intelligence, and is one of many tools available to businesses of all sizes.
See the Real Impact of Your Marketing
Even for retailers taking an omnichannel approach to marketing by reaching out to customers in every possible way, from social media to broadcast advertising and everything in between, decisions are constantly being made. How should various channels be used? In what context do you want to deliver your message? At what time? Retailers collecting data on how many consumers visit their website, how long they stay for, and how many visitors are converted to sales can determine the best use of their marketing resources.
According to Salesforce’s 2016 State of Marketing Report, 60 percent of social media “high performers” tie together customer data from disparate sources to create a single view of the customer, compared to only 4 percent of “low performers.” This personalization of the feedback the retailer receives, in the form of “likes,” clicks, and other metrics beyond sales, enables accurate targeting and an appreciation for important brand relationship building prior to the purchase.
Data Drives Decision-Making
Retailers have long collected sales and customer data to draw direct insights into improving operations, and many had begun to explore the possibilities now provided by technology. New approaches to data collection and analysis made possible by computer technology are delivering wide-ranging benefits to many businesses, in effect giving them new eyes, with the ability to see the retail environment differently.
Those retailers using data to find new ways to engage with customers, new opportunities for efficiency, to stay ahead of the trend curve, and maximize the cost-effectiveness of their marketing efforts will have a better basis on which to make important business decisions.
TK DataSec Consultancy provides advice on e-commerce security.Favorite