How a data strategy helps retailers survive holiday season and beyond
The worldwide coronavirus lockdown has wreaked havoc among brick-and-mortar retailers. We’ve all heard the gloomy predictions for the retail industry; legacy businesses like J.Crew, Hertz, and J.C. Penney are now filing for bankruptcy protection and many retailers have shuttered indefinitely. Studies show that a hybrid online and in-person retail model reliant on social media can help retailers survive. Many businesses are working to adapt digital transformation strategies quickly, but without a comprehensive data strategy the “the store is everywhere” ethos may prove to be disastrous. From vendor to customer, why is data infrastructure imperative to ensuring a positive retail experience? Vendors use data strategy to target and retain customers, streamline operations, optimize supply chain, improve business decisions, handle peak levels of online traffic, and save money. All-out holiday buying frenzies can put great demands on a company’s resources, especially if inventory data is incorrect, resulting in many operational headaches.
In terms of customers, businesses that adapt their predictive models with advanced data analysis technology are better able to assess consumer behaviors. Doing so helps them identify trends, secure and protect customer information, erase inefficiencies in the online purchase experience, and ultimately ensure shopper loyalty. Companies that implement good data habits can better understand and protect their entire holiday supply chain ecosystem.
Independent of a retailer’s size, adopting a culture of change and flexibility and a strong data strategy can provide in-depth insights about consumer purchases and engagement. The 2020 holiday season is one of the best times for this adoption, as it will set a new precedent and help retailers prepare for uncertain environments of the future.
What’s happening in the retail industry isn’t total apocalypse. It’s massive, rapid change. And the secret for retailers to surviving that change will be how fast they can detect societal trends and then super-serve those trends to their customers.
So why aren’t most retailers engaging in digital transformation? Most retailers aren’t set up to think this way. Digital transformation has come slowly to retail — mostly because retailers never needed to think about their digital capabilities before.
Laurent Letourmy, CEO of retail consulting firm Ysance — with clients like Sephora, Decathlon, Zadig and Voltaire, and Yves Rocher — notes that the best retailers have only about 20% of their revenue coming from e-commerce, and the worst, just 2%. “Imagine if your business has a thousand stores and hundreds of thousands of employees in your brick-and-mortar operation, and a couple of hundred in your e-commerce operation. What are you going to think about every morning? What is going to be most on your mind?”
The coronavirus crisis has exposed just how flat-footed most retailers have been when it comes to digitizing their sales operations and taking advantage of e-commerce data. “Adopting a customer-centric outlook and data-driven decisions is difficult when you’re in a difficult position,” says Letourmy. “But we live in a different world now, and now retailers are going to have to be digitized by force.”
The first step, says Letourmy, is improving retailers’ websites to provide a good customer experience. “Retailers don’t want to lose customers,” he says. “The online experience has to be a good one.” But, he notes, just as important is a global view of available stock and where it is. “You need to have a global view of the products in store, even if they are not in the central warehouse. Optimizing your supply chain can have a dramatic effect.
