Benefits of Implementing a Data-Driven Retail Strategy
The game for retail has changed. The importance of making strategic decisions in retail is highlighted by the 7,400 stores that have and will close in 2019. Retailers need to make educated decisions to position their brand for success. The key to making educated decisions relies on one unit: data.
With terms like big data, predictive analytics, and descriptive analytics leaching their way into the retail space, it is evident that retailers are aware of the need to adapt. This is where the process ends for many, however, as only 5% of retail and CPG enterprises qualify as data-driven. So, is it important to become data-driven since many businesses are not? The short answer is yes, but there are multiple benefits that your whole team can see by implementing a data-driven strategy. Let’s review five benefits of becoming a data-driven retailer below:
1. Cost Efficiencies
Part of becoming a data-driven retailer involves looking at the efficiency of each area of the business, and each channel of marketing. This can help to reduce spending because areas that are not performing can be optimized, modified or eliminated. This extends from marketing channels to stores whose performance is in the red. Regardless of the software, programs or messaging that is being used, retailers can use data to scrutinize every area of the business to make sure all tools and tactics are the optimal ones for the retailer’s success.
2. More Agile & Responsive to Consumer Trends
This analysis of business activities does not reside for internal items only, but external ones as well. Retailers who actively monitor and analyze consumer trends can stay ahead of their competition to maintain their status as the “go-to” location for trending items. Through analyzing their buying behaviors and testing new methods, retailers can spot opportunities to build consumer loyalty or capitalize on a product’s or category’s growing popularity.
3. More Agile & Responsive to Business Trends
Going hand-in-hand with cost efficiency and consumer trends, retailers can respond to and implement new strategies within their organization to drive better growth. By identifying the areas where consumers are connecting to the business, or are coming from for help, retailers can supply the staff or supply the resources needed to address any issues and decrease the risk of churn.
4. Detect New Opportunities & Act Quickly
New channels, strategies, and products are constantly emerging. By using a data-driven strategy, retailers can spot trending opportunities before they hit the crowd. Retailers can pay attention to how their tools, strategies, and products perform over time to detect any change or transition in these areas to avoid missing out on valuable opportunities.
5. Create Stellar Customer Experiences
Marketers spend a significant amount of time creating and maintaining the company’s brand. This effort can be seen in the graphics a brand uses, the store’s appearance, and the communications a brand sends out. While creating a stellar experience is important to attract your brand’s target market, the ultimate goal is to boost sales and drive customer loyalty. Retailers can add “checkpoints” to their experience where valuable data can be gathered to make sure the brand exceeds their customer’s expectations in every interaction.
Actionable Insights Help Retailers Thrive
A brand name is not enough to maintain your status as a profitable and successful retailer anymore. Blockbuster, once located in almost every town, fell to the now giant Netflix. Their fate fell into their own hands but not adapting to the market – a feat that could only be accomplished by making decisive, data-driven decisions. Today’s retailers need the agility and responsiveness to the market to not only thrive but stay afloat, like Netflix. Retailers who integrate a data-driven strategy into every facet of their organization can create an elixir to the fast-paced society we now reside in, or risk being crushed by the Netflix’s and Amazon’s of the world.
IMPLEMENTING A DATA-DRIVEN STRATEGY IN YOUR BUSINESS
Since you know the importance of creating a data-driven strategy in your organization, it’s now time to learn the 8 steps your business can take to become a data-driven retailer.