Retailers have gotten good at collecting customer data. But few have figured out how to monetize the insights gained from that data.
Some leading retailers have implemented modern data platforms that harness AI, machine learning and a portfolio of engineered applications to produce insights into the retailers’ workforces, inventories and customers.
The need for all retailers to take advantage of these platforms to make more effective use of data is urgent. New consumer habits have emerged, requiring retailers to renew their focus on faster and easier delivery options that help consumers along their buying journey. In addition, it’s estimated that as many as seven in 10 adults are now omnichannel consumers, which creates challenges in areas including customer purchase order synchronization and order fulfillment. And competitors with new business models are emerging, enabled by technological advances that have lowered barriers to entry.
The need for retailers to generate actionable insights from their data has never been greater. They face challenges in:
- Revenue and growth: Although worldwide retail sales are expected to rise 5% year-on-year for the foreseeable future, retailers face a perfect storm of revenue challenges. That includes rising costs, labor shortages, inflation and increased omnichannel complexity.
- Customer experience and loyalty: Consumer “stickiness” is vital, as repeat customers represent nearly two-thirds of a typical retailer’s total business. Retailers need to become trusted providers as customer expectations continue to rise around personalization and service. Meeting these expectations can be both challenging and expensive.
- Health, well-being, and environmental/social/governance (ESG): Retail customers increasingly expect that the products they buy and the companies they buy from incorporate sustainability into the plans. They also are increasingly demanding healthy food and beverages, and other products aimed at personal well-being.
- Technology-related evolution: Another perfect storm is brewing as retail supply chains come under intense pressure even as retailers’ aging legacy systems fall short of meeting new demands for digital commerce capabilities – such as in-store technology that gives sales staff a 360-degree view of their customers, empowering them to guide the buying journey in innovative ways.
Enabling data-driven insights
On the technology front, leading retailers are forging ahead by doing far more than simply implementing point solutions. Instead, they’re building data platforms that produce insights from data while maintaining robust data governance.
For example, one multi-national retailer worked with DXC and Microsoft to move its digital transformation strategy forward, leveraging data to enhance their operations. The company now has a single, centralized retail operations platform, giving workers easy access to the tools and data they need in one place; its sales staff are increasing customer satisfaction because they can give buyers the information they need in real-time to make their decisions.
Retailers should be mindful that successful data platform implementation plans must include streamlined governance processes that address regulatory obligations, or else they will risk introducing a layer of data stewardship that can create a barrier to change. Indeed, a recent research survey, conducted jointly by DXC Technology and Microsoft, found that over nine in 10 respondents (92%) say the biggest challenges around data are process, people and culture.
Differentiating with data
A modern data platform can help retailers use data to differentiate themselves. And in today’s new normal, standing out is important. Here are just a few of the possibilities retailers could profit from:
- Augmented virtual shopping: Retail apps can curate retailer and product and data to convey beneficial insights about both the seller and its offerings, ideally increasing consumer confidence and making it easier for them to decide on and complete a purchase. Using mobile apps, buyers can get quick and easy access to price comparisons, as well as to how a product the retailer is promoting compares to others in the way of health, well-being attributes and ESG ethics.
- Contactless commerce: Also known as “touch-free retail,” contactless commerce leverages data to track personalized and aggregated paths to purchase in order to increase average cart size and lead shoppers to new or alternative product offers.
- Order Fulfillment: Companies that leverage data to streamline the process of receiving goods, processing orders and delivering products to customers can improve profit per transaction.
Retail is a tough business, made tougher by a slowing economy, increased shipping costs and changes in consumer behavior. In response, retailers must seek out a new approach to gleaning monetizable insights. Learn how DXC’s Microsoft Practice and consumer and retail practice can help.