Data-driven decision-making helps retailers make decisions faster, deliver personalized customer service and maintain a competitive edge. Learn how.
Besides the usual challenges retailers face, like economic headwinds and stiff competition, retailers must also deliver on shopper expectations. In the current logistical climate, supply chains are more important than ever; if retailers cannot acquire the necessary products, consumers will shop elsewhere.
While retailers may not always have the most comprehensive assortment of products in stock at every location, they are still responsible for building and maintaining a strong relationship with customers to ensure that engagement and sales do not decline. This is among the aspects that are reliant on quality data and analytics, particularly as retailers continue to evolve both digitally and physically. For retailers to stay competitive – and keep customers coming back – data will be crucial to answering their most pressing questions, including those they didn’t even know they had.
Retailers Need Actionable Data, Real-Time
Shopping online and in-person are not mutually exclusive. Before buying an item online or in a store, consumers can visit a retailer, examine it, and make sure it is what they are looking for. They might even ask in-store if they can have a different size or color shipped to the store or their home from your online stock or another store. As a result of these developments in retail, consumers now have the freedom to shop wherever they want, whenever they want.
Consumer shopping behaviors, purchasing decisions, and overall trends are all particularly important for retailers in this hybrid evolution. It has never been more crucial to view, work with, and take advantage of that data when inventory management and store performance goals are critical.
Brick-and-mortar establishments also rely heavily on data to succeed and thrive. Having physical stores that are engaging places where customers can engage with them is imperative for retailers in today’s competitive landscape.
Whenever a consumer has a question or concern, they want to be able to get an answer quickly and efficiently. Additionally, they want to know they will be able to receive or retrieve their item as soon as possible when they order something for delivery or in-store pickup. Retailers can meet that demand more effectively by using physical stores as supply chain hubs than they could if they relied solely on warehouses.
Each of these objectives can be achieved with the help of data. Employees can make smarter decisions right at the shelf, with the customer, or back in the office with the help of analytics that are powerful and easy to understand. A retail store must be able to serve both consumers who come in and those who order online, so data plays a crucial role in deciding where to open new locations. To make informed, site-specific decisions and ultimately determine the optimal location of a new store, retailers can perform spatial analysis of an environment that includes analysis of customer distribution, analysis of customer behavior, and drive-time calculations.
Data-driven Engagement, Customer Satisfaction, and Adopting a Customer-Centric Approach
Data is only as good as its usability, regardless of how important it is. Data won’t serve its purpose if it can’t be used by those who need it. This empowers store employees to better supervise inventory, monitor sales, assess store demand, and understand trends, all via mobile devices that can be used right on the shop floor.
The retail sector is evolving. Retailers are becoming engagement centers and supply chain hubs, effectively strengthening their position as a place where consumers can do more than try and buy products. Adapting to consumer tastes and buying behaviors is a significant step in the growth of the industry. Data and analytics are the only way for them to make these changes and fulfill the expectations of customers.
In a crowded and highly competitive market, data reveals the best path to take. Data provides a map for success that doesn’t rely on assumptions or guesswork for businesses at a time when many don’t know what to do.
Considerations for Becoming More Data-driven
To become more data-driven in your business approach, there are numerous steps you can take. The following are some tips on how you can approach daily tasks with an analytical mindset.
1 – Observe patterns everywhere
At its core, data analysis is about finding patterns within, or correlations between, different data points. It is from these patterns and correlations that conclusions and insights can be drawn.
Making a conscious effort to be more analytical, both in business and in your personal life, is the first step to becoming more data-driven. It might sound simple, but it requires practice.
Look for patterns in data around you, whether you’re reading financial statements at your desk, standing in line at the grocery store, or commuting on the train. Practice extrapolating insights and making conclusions regarding why those patterns exist once you have noticed them. Including this simple exercise in your life can help you become more data-driven.
2 – Base every decision on data
Avoid making decisions based on gut instinct or past behavior, no matter how personal or business-related they are. Instead, take an analytical approach.
Assess the data you have available for use in making your decision. If no data exists, see if you can gather it on your own. Take the data that you have, analyze it, and use the insights to guide your decision-making. The idea is to practice enough that analysis becomes an integral part of your decision-making process as you did with the pattern-spotting exercise.
3 – Identify the meaning in the data
An integral part of data analysis is data visualization. The meaning of numbers is not apparent without understanding the context in which they are used. You can quickly identify trends and conclude data by creating engaging visuals in the form of charts and graphs.
Get familiar with the most popular data visualization techniques and tools, and practice creating visualizations with any data you have at hand. You can do this simply by drawing a graph to see your monthly spending habits and then conclude it. This information can then be used to create a personal budget for the following month. When you complete that exercise, you will have successfully made a data-driven decision.
4 – Leverage the right software to make it easier
It can be fun and rewarding to mine data for insights on your own, especially if you have statistical training, a little coding experience and a lot of time and processing power. For the rest of us, the right tools make the job a lot easier. Look for tools that can integrate data from all of your processes and offer prebuilt reports and dashboards as well as the opportunity to build custom reports when you want to dig further into specific correlations or insights.
There are many benefits to data-driven decision-making, but it’s important to remember that you don’t have to go all-in or nothing at all. You can become more data-driven and thrive in your organization by starting small, benchmarking your performance, documenting everything, and adjusting as you go.
Competitive retailing is all about improving your decision-making process to better drive the outcomes you want. By embracing today’s data and analytics tools, including artificial intelligence and machine learning, you’ll be able to make the right decisions that will help you meet the north star for any retail company: the consumer.