BARE Shares: 6 Ways Data and Analytics are Transforming Retail
BARE International shares an article highlighting how Business Intelligence is shaping the future of Customer Experience in Retail.
Original Article Source: MicroStrategy.
‘Despite a perception that retail is dying—fueled by well-known store closings and bankruptcies—retail sales are actually on a steady rise. By the end of 2020, total retail sales worldwide are projected to reach $28 trillion. This is due in large part to brands leveraging data and analytics in different ways to improve and transform their businesses.
The reward for insight-led retailers is impressive. According to McKinsey, data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable as a result.
Here are six ways data and analytics are benefiting forward-thinking retailers:
1. Customer Acquisition
Data mining for insights to know who potential customers are, what they like, what they want, when they want it, what they might like to be offered (and when and how) is no longer a nice-to-have. It’s essential for any retailer set on surviving and thriving in the next decade.
2. Customer Retention
According to Accenture’s Personalization Pulse Check of 8000 global consumers, knowing what customers want is just as important as knowing what prospects want. Ninety-one percent (91%) of consumers say they are more likely to shop with a brand that recognizes, remembers, and provides them with relevant offers and recommendations. On the other side of the coin, 71% of consumers say they find it frustrating when their shopping experience is impersonal, and 81% are frustrated when the shopping experience remains unchanged after negative customer feedback is provided. Retailers should be warned that if a brand gets customer information wrong when directly marketing to them, 37% say they will be less likely to continue with their purchase, and 20% will relay the negative experience to others.
3. Boosting Sales
In a segment State of Personalization Report, 44% of consumers said that they would likely become repeat buyers if a shopping experience was personalized, and 39% said they would also tell friends and family about the brand. When it comes to cross-sell, upsell, and recommendation opportunities leveraging data, 49% of consumers said they have purchased a product that they didn’t initially intend to buy after receiving a personalized recommendation, and 40% have purchased something more expensive.
4. Improving Inventory
From sensors on shelves that show when a product is getting low or is sold out, to reorder/restocking automation, to knowing exactly where a shipment and what products are trending or trending down, data and analytics allow retailers to be more precise when saving money and responding to customer inquiries and expectations.
5. Transforming Customer Experiences
Speaking of customer expectations, data and analytics are not only improving current customer experiences. They’re also transforming the customer experience by using data and analytics to create more appealing and innovative store layouts and online experiences, develop new products and services, offer deals and augmented reality experiences based on personalization and device proximity data, and more.
For retailers with both online and brick-and-mortar stores, there’s a strong competitive edge to be gained for brands that can deliver seamless personalized experiences across both. Forty-one percent (41%) of consumers say they now expect employees in a physical store to know what they have purchased from the same brand online.
6. Delivering New Business Models
Data-driven personalization and improvement is only part of what will make or break retailers in the future. According to Accenture’s Painting the Digital Future of Retail and Consumer Goods Companies, adapting retail business models to accommodate new trends could add $2.95 trillion in value for both the industry and consumers. Digital business models leading the way in this evolution include:
- Sharing economy: products are used for an occasion and returned rather than purchased (think Rent the Runway)
- Personalization economy: products are tailored to an individual’s likes and dislikes and delivered on a single occasion or by subscription (think Stitch Fix)
- Subscription economy: products are automatically delivered on a regular basis (think Dollar Shave Club)
- Replenishment and on-demand economies: based on sensors, products are delivered when or before customers want or need them (think Instacart)
- Services economy: what customers once did or sought help with themselves is now provided as a service by the brand
For most retailers that feel they’re late to the game in investing in data and analytics, there’s still time to catch up and lead. In the HBR Closing the Customer Experience Gap Report, only 15% of respondents said their organization is currently very effective in delivering a relevant and reliable customer experience. In the same survey, only 3% of respondents said they are able to act on all of the customer data they collect; and 21% say they can act on very little of it.’
Read the full MicroStrategy blog article by Author Tricia Morris at the source here.
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