How Analytics Fuels These 3 Retail Trends
Experts from every corner of the retail industry descended on Las Vegas for the Shoptalk conference earlier this month, all with one ultimate goal: find ways to better connect with customers. Though where to begin in achieving that goal is less clear, especially when effective strategies are informed by all sorts of disciplines — e.g., psychology, manufacturing, design and, of course, data analytics.
Business intelligence (BI) and analytics solutions have found purchase (if you’ll pardon the pun) in nearly every industry you can think of, but marketing and sales are among the earliest adopters — and with good reason. Early on, experts knew that the key to selling was anticipating needs, and that understanding those needs required knowledge, which is the combination of data and understanding. Today, big data and analytics tools are developed, processes are refined and whole departments are formed to do the work of gaining valuable insights into customers and their needs and what motivates them to make a purchase.
Analytics already plays a bigger role than you may think when it comes to retail sales — and it can have an even greater impact with the right approaches. Here are three big trends to look out for around the retail sphere in 2017, as well as how analytics drives or affects each.
- Customer research and store technology: While customer observation techniques and focus groups are all time-tested and valuable forms of research, they don’t tap into the power of analytics — at least not on their own. Things like foot traffic monitoring (sometimes enabled through a custom-made consumer application), smart device-carrying employees and emotion monitoring can help build a wealth of data on how consumers react to certain situations, or how they browse within a store. By applying analytics to review this collected data, you can gain insights into their actions and tailor layouts, advertisements and much more to suit them.
- Greater focus on the customer journey: In the past, too many retailers have either failed to recognize the importance of the customer journey or have tried to nurture customer relationships the old-fashioned way. Customer journeys, and the ways we enable them, need to be digitized. Not only does this help to more effectively reach customers wherever they happen to be, it also allows for data capture along nearly every point of that journey. That data provides knowledge of what’s working, what isn’t and what needs to change.
- Target less, attract more: As a whole, retailers tend to spend more money on targeting rather than optimizing the digital journey in a way that encourages customers to seek out products or brands on their own, which leads to higher levels of engagement. Although targeting certainly has its place, and can become more accurate with the use of analytics, an omnichannel customer experience that fosters a genuine connection with current and future customers is essential to building a solid, loyal customer base. With analytic insight, you can fine-tune your customer touchpoints to start building out awareness and interest. It’s a lot easier to close a sale when customers come to you.
After you recognize these trends, the next thing you must do is take advantage of them. The key to capitalizing on each of the above is to establish an underlying data strategy which all initiatives are tied to. Digital journeys need to be relevant. If data is poor quality or incomplete, the relevance is low. This can cause brand damage and lost sales as customers move to brands that appear a better fit for them.
Expect to see more on these three trends at retail industry events into the foreseeable future. Immersive, personal customer experiences can begin here, and data analytics is the fuel that drives them.
Therefore, once these approaches are mastered, where will brands go next to better connect with customers? We can never know for certain what the future will hold for a dynamic market like retail, but I’d be willing to bet the answer lies somewhere in all the data yet to be collected!
Rado Kotorov is the chief innovation officer and vice president of global product marketing at Information Builders, a provider of enterprise business intelligence, integration and data integrity software.
