Opinion by Stephen Duncan
The multiplication of touchpoints for retailers and customers to connect — from social media, catalogues, online sales to bricks and mortar stores — means brands can be closer to their customers than ever before. Yet as a result, retailers are accumulating terabytes to perabytes to exabytes of data, and having to make sense of it.
For instance, Walmart collects more than 2.5 perabytes of data per hour based on customer transactions, equivalent to about 50 million filing cabinets worth of data. The role for understanding data and streamlining all this information into understandable insights is becoming an increasingly important task for retailers. According to Gartner, a career in big data alone is set to generate 4.4 million jobs around the globe by 2015.
So how can retailers use real-time analytics to improve sales and customer service? First of all, retailers can draw on local, real-time intelligence to make smarter business decisions every hour, of every day; from weather forecasts, local events to in-store foot traffic and sales behaviour. For instance, sales data can reveal the ‘hot spots’ for product placement. This can be leveraged by regular rotation in that area to boost certain SKUs.
But with so much data being accumulated every hour of every day among retailers who may manage multiple stores across a state or country, how do they easily make sense of it all and make smart decisions at a local level, in real-time?
As a starting point, businesses need to define the data for capturing to ensure relevant insights into customer behaviours. Keep in mind what’s meaningful to the business, and how data should be positioned to unveil better understanding of customer needs. For instance, a clothing retailer may want to understand the types of stock that’s selling across its 35 stores across the country, and discover trends in product popularity across various locations. Visibility into this allows managers to distribute relevant numbers of stock to specific stores appropriately, avoiding waste and maximising sales.
It’s also important for retailers to define their proposition simultaneously across its various silos. An Accenture Survey revealed that 74 per cent of retailers ranked at or below ‘Under-Developed’ in terms of their readiness to deliver a seamless customer experience. Retailers need a single view of customer behaviours across all touchpoints to implement a defined marketing, engagement and inventory strategy that is appropriately matched across the entire omnichannel.
Next, it’s about acquiring the data in a manageable way, so it’s clean information with clear direction. Where is the data coming from? Is the data fragmented, and who’s responsible for channeling and aligning the data appropriately? For instance, a furniture retailer should know when orders for a particular product are looming towards outweighing inventory numbers, to either prompt the manufacturing of more stock, or stop sales across all POS channels.
It’s interesting to hear that a study by Retail Systems Research showed 42 per cent of retailers say that a top inhibitor for retailers is that inventory and order management are not integrated and accessible across all channels.
Furthermore, in order to analyse data and make smart business decisions in real-time, collected data needs to be captured and structured effectively. This is why it’s crucial for retailers to partner with a smart business management software provider that will listen to the needs of people at different levels of a retail enterprise, to gain thorough understanding of the intricacies of the entire business’ information needs. And everyone in the organisation needs to be distributed the right information that’s relevant to them, as it’s compiled, in real-time.
According to Gartner, data is the new oil. Business intelligence and analytics is set to be the number one priority for CIOs through to 2017, followed by mobile technologies, enterprise resource planning (ERP) applications, infrastructure, data centres and the cloud.
Stephen Duncan is the retail product marketing manager for Pronto Software.