Making data actionable
A new report by CommerceNext reveals that, perhaps unsurprisingly, digital-first retailers are emerging from Covid in a greater position of strength compared to incumbent retailers. The research shows that retailers whose heritage are stores, catalogues, or wholesale (before adding ecommerce) have struggled and are continuing to do so, even as people begin to resume their pre-pandemic ways of life.
The number one challenge for incumbent retailers:
Despite the digital transformation gains made by nearly every retailer in the past year, the survey found the number one challenge for incumbent retailers was making their data actionable. Whilst the report does not deep dive into why incumbent retailers are struggling to do this, it is likely that there are a few key issues.
Lagging behind due to legacy systems:
Firstly, they were already on the back foot. When lockdown struck traditional retailers had to pivot, they needed to put processes in place to enable them to sell when their stores were shut. Digital retailers, by comparison, already had all these systems in place so were starting from a position of power. For most incumbents this transformation meant having to ‘make do and mend’ and convert existing legacy systems.
Equating data with insights:
The next problem is mistakenly equating data with insights and getting hung up on data collection. Whilst insights are made from data, data on its own doesn’t necessarily result in actionable insight. To translate data into measurable business outcomes it must be processed into information from which insight can be gleaned.
Fighting the hoarding compulsion:
A major part of this is understanding what data is the most valuable and relevant for your business. Once incumbents got their online processes into place it is likely that they then went on a blind data landgrab. We often see organisations investing significantly into collecting as much customer data as possible. When asked why they are collecting the information, nine out of ten times they can’t explain their reasoning.
Data ignites a hoarding compulsion. For consumers digital hoarding has been diagnosed as an actual psychological condition. Many of us keep thousands of emails ‘just in case’; the same is true for businesses collecting data on the off chance that it will be useful. However, often the reverse is true and you end up being unable to see the wood for trees. The key to creating actionable data is understanding exactly what it is you want to do and collecting the right information to be able to do it.
Behaviour driving meaningful conclusions:
Transactional data and customer purchase behaviour data are the most important sources for actionable insights. Using advanced analytics this data can be interrogated to show exactly how customers are behaving and interacting with a business and what is ultimately driving a sale and a repeat visit. Having such meaningful conclusions means a retailer can then clearly see what can be optimised to improve the customer experience, so that every customer becomes a brand advocate – which is the goal for long term retention.
Actionable data strategy a priority for 2022
As we continue along the path of Covid and deal with whatever curveballs it throws in the future, if incumbent retailers wish to catch up to their digitally native counterparts, they should capitalise on the opportunity that digital transformation has provided and look to make actionable data strategy a priority moving forwards.
This was posted in Bdaily's Members' News section by Nicole Richardson Beyond Analysis .
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