First published by Retail Week, 24 February, 2014 |
Big data has always been one of retail’s greatest strengths – after all, the Tesco Clubcard is arguably the predecessor of big data as we know it today. It is also one of the biggest challenges retailers face.
Ian Cheshire, Kingfisher chief executive and chair of the British Retail Consortium, has labelled big data “a game-changer”. He went on: “Many big names have already disappeared from the UK high street and there will be many more to come if retailers fail to address the big data challenge, understand their customers and adapt to their needs.”
Meanwhile, IBM chief executive Ginni Rometty predicts that thinking strategically about big data “will determine the winners and losers” of retail. Ironically, the biggest hurdle around big data is data itself.
This seems absurd when Amazon, arguably the world’s most successful retail experience, is built on understanding and using data. The etailer uses collaborative filtering technology to develop automatic recommendations for customers based on their purchase data. But introducing such a process with reams of pre-existing data is no mean feat.
“When it comes to data strategy, retailers must ask themselves what it means to be relevant today”
Data is a rich vein to tap and is relevant to nearly every discipline and industry. Where once the aim was to collect as much information as possible, the emphasis now is on turning this into customer-focused intelligence, helping retailers to deliver the shopping experience today’s agile consumer expects.
Much has been written about big retailer failures and the slow death of the British high street. The reality is that both the way we shop and the way we want to live our lives is changing and, as a result, many retailer offerings are no longer relevant.
Retailers should provide customer-centric experiences. Loyalty will always be defined by how brands make people feel. Retail is no different, and experience is everything.
Today’s agile consumer is tech savvy and as mobile as the devices they use. Most of all, they expect their retail experience to be personal and relevant. Data enables retailers to deliver both.
This is the year some of the UK’s biggest retailers should make headway in their use of data. Much of this will come from new data tools. Asos, for example, has been using a start-up fashion data tool called Editd to access insights into consumer fashion retail trends. Editd’s information on pricing has reportedly helped push the etailer’s sales up by 33%.
When it comes to data strategy, retailers must ask themselves what it means to be relevant today, define their experience and understand how best to deliver value to their customers.
They can also use data to help them decide whether a customer is worth keeping – the power balance hasn’t shifted entirely into the hands of the consumer.
Both Cheshire and Rometty are correct that data enables business agility and getting smart with data is at the core of modern retailing.
What they’re fundamentally missing is the how. Every retailer will find their own way, but for those brave enough to face the data challenge, there are many rewards to be reaped.