The volume and value of data in the retail industry are increasing exponentially each year. In this article, Toucan Toco experts explain how to transform retail data analytics into easily available information.
Data is the new currency of the digital economy in the retail sector. The crucial role that retail data analytics play in improving the economic performance of this industry is well established.
According to a study by Snowflake and Harvard Business Review (2018) companies that make data-driven decisions have the best chance for longevity. Yet across industries, they found that only 5% of retail and consumer packaged goods (CPG) companies are data-driven.
Why it’s hard for a retailer to be data-driven?
The information provided by the customer during his purchase online allows these companies to better understand his consumption habits.
They can have access, through the collection of personal data, to the gender of consumers, their favorite brands, what they have recently bought, their budget…The customer experience is improved, by proposing a real personalized experience during the customer visit.
The main difficulty for retailers is that data is less accessible or scattered over many different sites and stores. The data may seem difficult to collect if the management direction does not put in place the right tools.
IN A CONTEXT OF DATA SKEPTICISM, IT IS DIFFICULT TO ESTABLISH A DATA CULTURE :
The top management at some retail companies has resisted establishing a data-driven culture. A study, by Fortune Knowledge Group, stated that executives of large companies trust their instincts more than data when decisions become complex.
“In the age of Big Data, it is often assumed that the rational and analytical are the primary drivers of business decision making. However, the more complex decisions become, the more top executives are looking at emotional factors as their key catalysts.”
This situation is problematic. Indeed, when top management is reluctant to democratize access to retail data analytics, very few employees have access to helpful information. As a result, data reports do not “go down” to the store. This lack of information is reported by shop managers and sales assistants.
Why this reluctance? There is a common misconception that providing access to data to all the decision-makers in a company is a security risk. Yet, democratizing data does not mean opening data!
Would you rather have a PowerPoint or excel file that anyone can share with anyone or have software with user restrictions and the ability to track who uses it and where?
Rather than restricting access, some companies have opted for principle. This approach allows sensitive data to be replaced by other similar values that refer to it. Thanks to these methods, calculation systems make it possible not to make certain values visible.
THE DIFFICULTY OF SETTING UP DATA-DRIVEN CULTURES IN RETAIL IS TECHNOLOGICAL AND ORGANIZATIONAL :
The reports in the hands of store managers are difficult to use
Store managers are often confronted with retail data reports or retail KPIs difficult to read and analyze. These reports lead them to spend more time processing or analyzing data than to focus on business.
In addition, the methods used to collect the data causes delays. As a result, the reports take several weeks to complete and are no longer relevant when they are delivered.
To be used, a software solution must be able to answer key questions in a pragmatic way, it must be able to make life easier for employees in stores. Motivating it is an important step in a successful Data project. Every employee in the store should be able to visualize the data they are interested in in a simple and intuitive way. It is, therefore, necessary to offer an easy-to-use tool that allows you to change the angle of view of the data according to your needs.
Example: Imagine a platform where the store manager finds all the information in one place, easy to access, easy to understand. For example, they will find the tutorial on the new layout of items in stores, the training plan of their team, the schedule of the incoming week, the performance of sales by product…
The cultural gap between specific departments of the company
Gartner specifies that a fundamental characteristic of a data culture is the provision of data in a simple and clear manner to all people in the company. This culture must be applied in a widespread way and not on a single business line of the company, as is often the case.
Yet, without digital tools that allow this information to be shared, it is not easy to align the company’s strategy. There is a misalignment between the business strategy and the data used. Each department must be able to put the results of their data into perspective with the other departments of the company.
For example, the implementation of one of our customers’ phygital strategy consisted of sharing information collected online and at points of sale via the in-store Wi-Fi portal. This has made it possible to acquire a global vision of customer behavior, shared by all departments via a common dashboard.
How to deliver actionable retail data analytics for all your operational stakeholders?
Many data projects are implemented without any clear and precise business use, privileging data to the detriment of business input. Obtaining and making the data available is not the ultimate goal. Let’s look at how the same data can tell different stories by taking different business needs.
Retail director: monitor your portfolio’s performance at a glance
Retail managers must assume a certain number of responsibilities to provide optimized reports. They must be actively attentive to their portfolio performance. They also must ensure the economic and administrative management of their sector.
They are often overwhelmed by the amount of data to manage. In addition, they have access to retail data analytics (sales, customer profiles) but do not have the tools to transform this information into an action plan. With data storytelling solutions, sales managers manage performance at multiple levels: within stores and within their network.
They can provide common reports for information relevant to a large number of stores and at different levels of management. This allows distribution managers to manage resources and inventory through a common tool for the entire company.
This ensures that store managers make the same decisions as top management. They instill a data culture and transmit a data-driven vision for store management. They can also optimize merchandising and inventory management on their store network.
SHOP MANAGER: HAVE EASY ACCESS TO VALUABLE INFORMATION THAT MATTERS
hop managers need access to a certain key and valuable retail data analytics to ensure sales performance. However, this information can be a hassle to collect or is poorly communicated.
Thanks to a data storytelling solution, shop managers can access the data produced by the top management at a glance. For example, they can know in real-time the expected turnover, current promotions, how to position the merchandise in the store, orders to be placed for supplies, opening hours to be respected… In the opposite direction, shop managers can easily enter certain data that the head office needs.
This information is useful to the entire in-store team. Having access to it allows you to challenge the sales forces with precise objectives and information. The management and quality of the sales forces are improved, thanks to the clarity of the available data.
HUMAN RESOURCES: BETTER MANAGE SALES FORCES THROUGH A CUSTOMIZED APPLICATION
Yet, the implementation of good working methods can make up for this phenomenon in the long term. According to a study by National Study of the Changing Workforce :
“The intention to change employers varies among retail employees based on a variety of factors and workplace conditions, including several measures of workplace flexibility and schedules satisfaction”.
The use of a data storytelling tool also makes it possible to monitor in real-time which employees have received certain professional training, are in the process of being trained or are required to undergo this training. This allows a broad perspective on all store employees in a given region or in their entirety.
MARKETING: A COMMON APPLICATION FOR BETTER COMMUNICATION WITH OTHER TEAMS
In the retail industry, the marketing department needs to know quickly the ROI of their actions. : What is the number of sales generated after a promotion is implemented? Did this promotion increase the number of visitors in stores? Did consumers enjoy in-store events? Did the new product perform well thanks to in-store communication?
However, to answer these questions, marketing teams often have difficulty in being in direct contact with shop staff.
The use of a common application, where this information can be aggregated in a few minutes, helps to resolve this situation. This way, they can cross-reference their campaign data with in-store sales data and objectively demonstrate the effectiveness of their operations.
How data visualization help retail company to embrace their data transformation?
Data analytics have the power to enable the retail industry to reduce competition with pure players. The solutions that Toucan Toco implements are designed and adapted for specific department issues (Marketing, HR, financial services)… Sharing this data is easy and allows you to objectively demonstrate your results.