Retailers still say data is biggest barrier to insight
By Aniqa Tariq
The retail sector is increasing investment in analytics with everyone from Woolworths to Zara trying their hand at collecting big data from shoppers to drive meaningful moments.
However, new research from Bluewolf highlights that 89 per cent of retailers globally feel they have weak data quality, management or standards in place, with only 8 per cent considering their data a competitive advantage.
These data shortcomings prevent retailers from fully comprehending consumer motivations and purchasing behaviour, inevitably fuelling uninformed business decisions and preventing companies from getting closer to their customers.
The opportunity for retail to capitalise on data insights is undoubtedly huge. The best companies are focused on translating overwhelming collections of data – from marketing to staffing, and inventory management – with actionable and real-time analytics, to drive intuitive and automated employee experiences that can power incredible customer moments.
But first they need to ensure the data they’re analysing is up to par. And if it’s not, companies need to understand how to use the data they have effectively to expose quality issues and make it more valuable over time.
Discrepancies in data can cost retailers significantly, with IHL Group estimating that retailers worldwide lose a staggering $1.75 trillion annually due to the cost of overstocks, out-of-stocks and sales returns alone. Indeed, the wrong data, or no data at all, can cause businesses to undertake costly expansion programs or customer initiatives that aren’t based on concrete purchasing behaviour and preferences.
Bluewolf’s research showed that 72 per cent of retailers invest in analytics, yet respondents still cited data as the biggest barrier to deriving business insights from their CRM platform. Issues such as trouble accessing different types of data, poor or inconsistent data quality, and not having enough time or resources to deliver reports topped the list.
For Australian retailers in particular, brick-and-mortar stores are still beneficial to their business models – just look at brands like The Iconic or RY.com that were born online but moved into the physical space when they saw the demand from their customers. But without actionable analytics, creating a quality customer experience, brand loyalty, and ultimately revenue for an offline store becomes an educated guess at best.
The key process to making data analytics successful is to first prioritise data governance to ensure quality data goes in. This will ensure the information gathered across various platforms is thorough, consistent and organised enough for the intelligent cloud to deliver recommended actions, predictions and suggestions accordingly.
Next, retailers must integrate their different data platforms to create a single source of truth. Interestingly, retail companies surveyed are leading the way when it comes to cloud and data integration, with 45 per cent of retailers surveyed integrating one or more CRM clouds in the past year, compared to only 27 per cent and 35 per cent of health and financial companies surveyed respectively. Furthermore, 18 per cent of retailers plan to integrate clouds in the coming year.
The final and often overlooked step to maximising your data analytics is providing a strong user experience and guidance for your employees so they can not only easily contribute data, but access the resulting analytics to get closer to their customers.
Retailers have taken the step in embracing cloud platforms, but have yet to realise the true power of quality customer data and analysis to make more thoughtful business decisions – from customer touch points to store layout – and drive smarter customer interactions based on facts instead of hunches. The information is already there, it’s up to your business to use it.
Aniqa Tariq is managing director of ANZ at Bluewolf, an IBM Company.