COVID-19 flipped the retail industry upside down. Retailers were suddenly forced to face some of the industry’s most glaring problems – the need to enhance customer experience, shift in purchase decision-drivers, challenging decreasing margins, and streamline operations. It put kirana stores, groceries and pharmacies, in a tricky position, however, the major effects of the pandemic were felt by ‘non-essential’ retailers. Brick-and-mortar retailers had to suddenly operate differently; right from maintaining social distancing norms to enabling the completion of the physical shopping purchase cycle.
On the other hand, shopping online became even more popular. New hybrid shopping trends started to take front stage – such as buy online, pick up in-store (BOPIS) and research online, purchase offline (ROPO) – which meant that retailers had to be prepared to match shifting consumer behaviours and needs. What retailers need, therefore, is consistent customer experience across touchpoints and what will help move the needle is the adoption of data, analytics and emerging technologies. There is a greater need now of a phygital world more than ever.
A year after the onset of COVID-19 that triggered an onslaught of the retail industry the smoke is (mostly) beginning to clear. A new face of retail is beginning to emerge; one which is experience-based, hybrid and data-driven.
Design and Build Core Set of Data and Analytics Capabilities
Today, it isn’t about online versus offline shopping, rather about customers increasingly expecting seamless interfaces for their online and/ or in-store experiences. To address this need, retailers have sought to maximise choices for their customers while others have begun to focus on creating personalized/ tailored approaches to give customers what they want. In such an environment, companies which will be able to understand their customers extremely well will be the ones to thrive.
What retailers should leverage now is: multi-touchpoint data – be it on mobile, social media, personalized offers, in-store, in-app, etc. – with uniform messaging and personalization maintained across channels.
There is a strong belief that data-driven decisions are a must for businesses to survive and eventually grow again. Dresner Advisory Services’ update, New Findings on How COVID-19 Impacts Businesses, Budgets, and Projects provides a data-driven glimpse into how analytics and BI project spending changed last year. Research suggests that 49% of enterprises are either launching new analytics and BI projects or moving forward without delay on already planned projects. In the same vein, companies can use data and advanced analytics to keep a close eye on customer sentiment, behavior and activity, optimize online sales, and even mitigate some of the challenges and roadblocks.
Retail organisations are impacted by the proliferation of new data sources and need to organize around analytics to maintain a competitive edge. Analytics is also a necessity when it comes to support the larger ecosystem in an organisation:
- Supporting the pace of innovation: The rapid-fire pace of innovation has the potential to define winners and losers in retail; and an integrated core competency around data and analytics is a requirement for winners.
- Supporting a culture of innovation: This new “exponential” era (Edge Computing, Blockchain, Wearables, Voice and Vision AI) will require a culture of experimentation and trial and error to allow companies to remain agile, fluid and adaptable to the pace of change. Analytics is required to support an innovation-driven culture.
- Contextualise business decisions: To extract value from Big Data, retail companies need to be able to make more accurate information-based decisions that drive improved organisational effectiveness and business performance.
Lagging behind means losing for retail firms when it comes to these capabilities. But again, firms need to build a broad set of analytics capabilities and competencies before they can participate in – and capitalize on – the rapid pace of technological and digital innovation.
Enriching Customer Experience and Tap Customer Journey – The Most important Tenet for Retailers
Designing and improving a great customer experience is getting easier with the help of advanced analytics. Today, customers are in control of their path, therefore, it is paramount to capture all the moments of truth along the customer journey and identify points of improvement.
Predictive analytics allows retailers to build models that can predict customer’s behaviors, inventory needs and product interests. For example, by collecting information on what customers are researching online, retailers can build predictive models for when online researching turns into an in-store purchase. These analytics can also help automate daily processes, maintain budgets, improve price optimization and drive new product development – collecting insightful data from both suppliers and customers providing a single source of truth.
With business performance indicators and robust data management, retailers can fully integrate their supply chain, in-store as well as online data to ensure they are creating a rich shopping experience – one which takes into account new shopping behaviours.
Keeping an Eye on the Supply
In order to ensure that retailers are always on top, it is important to marry supply chain information systems with customer analytics.
By utilizing customer intelligence and data analytics, retailers can gather insights on where their customers are, make better orders and collect supply chain data in real-time. When it comes to supply chain management, data can be used to track products, manage inventory in real-time and speed-up delivery of goods.
Speaking of inventory management, companies can leverage real-time inventory data to always be up-to-date on what is and isn’t on the shelves, and minimize the chances of winding up with dead inventory on their hands. Additionally, it has the ability to save retailers dollars in lost sales and has a positive impact on the bottom line too.
An Upcoming Retail Revolution
COVID-19 has ensured retailers wake up to address the digital divide which exists in the industry. While major brands did not have much trouble adopting technology-driven solutions, it was the smaller traditional, mom-and-pop stores which did not have the resources to pivot. And no, this unprecedented situation doesn’t call for retailers to invest heavily in technologies such as virtual reality or move their businesses completely online. Adopting a data-driven approach and creating a true omnichannel solution will help retailers create seamless shopping experiences.
The future of retail is that retail opportunities are everywhere, and at various touchpoints. For example, Nike has adapted its stores to create tailored services for customers, thanks to the information they have from their digital profiles. And this personalization trickles into their offline stores as well, wherein they have created interactive experiences for their customers – it is mingling both offline and online data. The whole point is to make their services more intimate and direct for their customers.
With growing polarization, offering an omnichannel experience is a necessity and disruption is deemed as the way forward for traditional retailers. It puts the customer at the core, and ensures that retailers are present everywhere their customers are. One thing is for sure, the revolution of retail will be driven by data, and it will be on retailers to navigate the thin line between privacy protection and open public information.
(The author is Saurabh Singh – Senior Vice President – Digital & Advanced Analytics at Polestar Solutions and the views expressed in this article are his own)