Even the most successful brands can fail if they don’t keep up with the times. Leveraging data analytics to stay ahead of the curve with the ever-evolving consumer landscape will help future-proof your business.
Challenges of the Retail Environment
#1: Digitalise Retail Operations
#2: Personalise the Shopping Experience for Customers
#3: Use Targeted Advertising
#4: Adopt Automation Technology
Considerations when Harnessing the Power of Data
Invest in Security Technology
Consider Outsourcing your Data Analytics Operations
Revolutionising Retail with Data Analytics
Challenges of the retail environment
“Retail is life. You will always need to shop, you will always need to buy,” says Ben Tan, Chief Executive Officer of Singapore furniture retailer - Courts. But simply selling customers products they want doesn’t necessarily translate to happy retailers, especially since brick-and-mortar establishments are already facing significant challenges in keeping their cash registers full.
With the rise of e-commerce, retailers of physical stores have faced intense competition from their online counterparts. For one, online stores don’t need to pay rent for expensive shop space or hire employees to man their stores, resulting in cost savings that can be passed on to shoppers. Consumers also love the convenience of being able to shop from the comfort of their home, with purchases being delivered straight to their door.
Even without this element of competition, holding large real estate portfolios in itself is an expensive affair as it requires regular rent payments and inventory shipments. Forever 21 learnt this lesson the hard way as it locked itself into long leases for its huge flagship stores, disregarded the rapidly changing shopping preferences of its consumers, and as a result, had to file for bankruptcy on Sept 29 this year. Then there is also the issue of attracting customers and keeping them loyal. Shoppers face no shortage of brands and products to choose from, making it even more challenging for retailers to stand out. Even if a particular retailer has won a customer’s business this time around, there is no guarantee that the customer will return for future purchases. At the end of the day, it’s all about providing shoppers with the best bang for their hard-earned money.
One key to achieving continued retail success in the face of such risks is to adopt a data-centric approach to operations. Instead of making blind guesses, retailers who rely on data to inform their decision-making can be assured of making right-sized physical operations, improving customer satisfaction, loyalty, sales, and ultimately increase bottom lines.
Here are several ways retailers can use data to survive the retail apocalypse:
#1: Digitalise retail operations
If a retailer hasn’t already digitalised its operations, it is imperative to get started now.
In the past, retailers may have been able to get by going digital by simply setting up an online presence and implementing the required logistics and delivery infrastructure. However as shoppers increasingly prefer to use their smartphones even while being physically present in the store to compare prices, search for better deals or even discounts, retailers need to leverage smart devices to optimise foot traffic.
A key trend that retailers should also tap on is social commerce, where merchants directly sell their wares to consumers through social media platforms. Instagram’s Shopping feature is a prime example of social commerce, allowing users to buy products featured in the merchants’ posts and stories.
Simultaneously, retailers need to focus on creating seamless “omnichannel” experiences that blur the lines between online and offline purchasing, allowing shoppers to complete their purchases before losing them to the competition.
To illustrate, Singapore supermarket chain NTUC FairPrice launched its online shopping platform “FairPrice On” in 2018. Using the platform’s “Click & Collect” feature, shoppers can opt to collect their purchases from any of the supermarket’s 200 outlets islandwide. Alternatively, they may opt for delivery—and in this case, the supermarket chain will use any of its brick-and-mortar outlets to fulfil orders before shipping them out.
#2: Personalise the shopping experience for customers
One immediate outcome of the digitalisation process is that retailers are able to gather massive amounts of data on how shoppers interact with their businesses. Such data can then be leveraged to further optimise retail operations through the personalisation of online shopping experiences; empowered by machine learning algorithms to churn out recommendations for customers based on past product viewing histories.
When deployed, product recommendation engines can have a great effect on retailers’ bottom lines. In 2017, the CEO of e-commerce platform Lazada Singapore shared that the platform’s recommendation engine drove most of Lazada’s sales.
Proximity marketing offers another dimension for retailers to personalise shopping experiences for customers. By making use of beacon technology, retailers are able to extend time-based deals and discounts to shoppers via their app, reach out to customers outside the store, while adding an additional layer of personalized interaction to improve shopping experiences.
#3: Use Targeted Advertising
The goal of advertising is to raise awareness. But traditional billboards and television ads are too broad and, as a result, don’t stick. In order for retailers to see real results, they need to be targeting the right audience with the right messages at the right time.
Online advertising especially trumps offline advertising in this regard, as it allows for even more granular targeting. It is entirely possible to specify when to show an online advertisement to a particular segmented audience based on gender, location, age, or even interests in a specific topic.
Apart from relying on data collected by media owners, retailers should also be collecting consumer data for marketing purposes. Fashion retailer Zalora has been successful at gathering data from their customers’ purchase and click patterns and in serving them personalised Facebook advertisements thereafter.
#4: Adopt Automation Technology
In recent years, new technologies have emerged with the potential to automate retailers’ operations even further. To give you an idea, physical stores would normally send employees to the shelves to replace products whenever stock levels are diminishing. What if they could invest in digital shelves that automatically update with the latest product information in real-time?
E-commerce giant Amazon is one retailer leading the pack when it comes to adopting automation technology. In 2018, the company opened its first unmanned Amazon Go store where customers simply take their items and leave without going through a cashier. In-store technologies, such as computer vision, sensor fusion and deep learning, keep track of customers’ items so they can be automatically charged to customers’ Amazon accounts directly.
Considerations when harnessing the power of data
Invest in security technology
Retailers who collect customer data should invest in technology to protect the data from misuse or from being compromised. Such solutions could include:
- Installing malware detection software on point-of-sale systems
- Customer data encryption solutions
- Setting access restrictions to data sets
At the same time, retailers must provide adequate data hygiene training to their staff to reduce human error in the management of customer data.
In August 2019, furniture retailer Ikea had to issue a public apology after mistakenly placing email addresses of 410 recipients in the “To” field of a promotional email, which resulted in the unauthorised disclosure of these email addresses to all recipients.
Consider outsourcing your data analytics operations
Even if retailers acknowledge that analysing their data can give them a competitive advantage, they may lack the resources and know-how to be able to immediately apply data analytics to their business. Fortunately, it is possible to outsource retail analytics quickly and affordably by requesting for a customised feasibility report from DataVLT. This report will contain recommendations on how data sets should be used to address existing retail challenges. Apart from basic reporting, DataVLT is also able to assist retailers with more sophisticated analysis including demand forecasting.
Revolutionising retail with data analytics
In the age of ongoing digital disruptions, retailers need to rethink the way they conduct their business. Adopting a data-centric approach is a step in the right direction to future-proofing your retail business. Learn how DataVLT helps retailers fuel their success today.
Secure, Affordable, Easier — DataVLT is an on-demand data science platform integrated with blockchain. We exist to help enterprises accelerate their growth through digital transformation by way of data analytics.
Learn more at www.datavlt.com.