Running a retail business is no easy feat. There are plenty of unknowns and moving parts that change the dynamics of the business. Coupled with rising consumer expectations for better service, achieving operational excellence is not an option, but rather a necessity for modern retailers.
In our previous post we noted the benefits of becoming a data-driven retailer. We also highlighted that savvy organizations that excel in making effective use of data enjoy substantial improvements in key operational metrics such as average order delivery time and time to market of products / services.
Findings in Aberdeen Group’s Data-Driven Retail study revealed invaluable insights on achieving operational excellence. The common factor across all these insights is that retailers must streamline how they capture, manage and use operational and consumer insights in order to maximize their performance. The below figure illustrates several activities that help savvy retailers accomplish this goal.
Figure 1: Drill-down into Data to Tailor the Shopper Experience
A common mistake most retailers make is solely focusing on adopting the activities above, and overlooking the vital role data governance plays in using relevant and timely insights within these activities. For example, the above figure shows that retailers must utilize data from different shopper segments to identify the optimal price for each product — as well as the channels used to sell these items. However, in the absence of relevant and accurate data the pricing and customer targeting activities are prone to error, resulting in outcomes such as setting product prices lower than their value in the eyes of shoppers, and such missing out on additional revenue.
Retailers have access to a world of insights across multiple channels. Some of these are structured (e.g. web logs) and others are unstructured (e.g. customer-generated social media content such as a tweet). Successful businesses differentiate themselves through their ability to integrate these different types of data into a single view of the shopper. Doing so provides visibility into the products demanded by consumers, identify price sensitivity to different items as well as determine which e-commerce site content is more likely to convert website visitors into paying clients.
If you haven’t already laid the foundation to help your employees analyze more data gathered from more sources, we highly recommend you do so. It will require moving to a new big data processing paradigm so you can integrate all your data, operate in real-time and act with insight. This will help you realize the full potential of using the best practices highlighted in the Data-Driven Retail study.
Research Director, Contact Center & Customer Experience Management
As noted in the above post by Aberdeen, Best-in-class retailers have implemented big data technologies where they correlate historical patterns with in-the-moment buying behavior. These sites can predict if a shopping cart is about to be abandoned, and take instant action to minimize this behavior such as offering new information, reviews or a price discount. Product recommendation engines, such as those provided by Amazon, are excellent examples to increase customer loyalty as well as average purchase price.
Like to learn more? Please read Aberdeen’s Data-Driven Retail study to learn more about the challenges faced by modern retailers and how effective data management activities pave the way for success.
About the author, Omer Minkara
Omer Minkara is the Research Director leading the Contact Center & Customer Experience Management research within Aberdeen Group.
In his research, Omer covers the Best-in-Class practices and emerging trends in the technologies and business processes used to enhance customer experience across multiple interaction channels (e.g. social, mobile, web, email and call center). Omer’s research is widely consumed by senior-level Customer Care, Marketing, Sales and Service executives. He has published numerous industry research papers, which are used by executives worldwide to build and nurture strategic customer engagement programs. Omer also speaks frequently with global decision makers to discuss their customer management activities.
Omer has a strong finance background with significant international experience. Prior to joining Aberdeen Group, he was an auditor at PricewaterhouseCoopers in the Europe region. Omer has an MBA degree from Babson College, where he participated in the launch of a technology company, creating a customer acquisition and engagement strategy, and developing all the operational and financial forecasts for the enterprise.