4 Steps to Getting the Most from Your Retail Data in 2019
Turning data into dollars is achievable and should be a priority this year.
Retailers are practically swimming in data.
No matter whether a retailer is all-online or runs a brick-and-mortar store — or whether it’s a tech leader or laggard — virtually everyone handles a wide variety of data: inventory information, customer payment data, loyalty programs that incorporate buying histories, employee payroll data and countless other sources of information.
Many of these retailers are coming to the same conclusion: Owning data is relatively simple, but the challenge lies in tracking, managing and integrating it in ways that boost sales, create efficiencies and improve the customer experience. In my experience, retailers often have their hands full simply storing their data securely, and thus they frequently miss out on opportunities to use the information they manage to create value in new ways.
As 2019 gets underway, here are four digital transformation steps retailers should take to ensure that their data is working for them.
1. Invest in Inventory Tracking
Inventory management has always been important in retail, but the rise of online shopping has made it even more crucial. Customers now have plenty of other options if they encounter stockouts at their favorite brick-and-mortar stores. Further, online retailers have recalibrated consumers’ expectations, so that they now not only expect items to be in stock, but also demand visibility into a store’s inventory. By investing in solutions such as radio frequency identification (RFID) and data analytics, retailers can improve forecasting and help customers locate the products they want.
2. Integrate Customer Data
Every time customers interact with a retailer, they provide valuable information. But far too often, that information simply sits in storage, when it could be used both to create value for the company and to improve the quality of the customer’s experience. For example, when a customer buys something online, many stores fail to tie that purchase into their brick-and-mortar operations — either by including the purchase in the customer’s buying history to better inform targeted marketing, or even by linking the purchase to the system that manages in-store returns. This is a massive missed opportunity. In one survey, 59 percent of millennials said it would be helpful if retail store personnel knew about their online product research as a way to improve customer service.
3. Embrace Artificial Intelligence
Artificial intelligence (AI) solutions are giving stores the ability to use data in ways that simply weren’t possible even just a few years ago. For instance, grocery chains are using AI and machine learning to optimize product replenishment and automate ordering, freeing up staff for other tasks and reducing shelf gaps by as much as 30 percent. Also, AI can improve the efficiency of customer engagement centers. For example, IBM says its Watson Assistant can answer up to 70 percent of inquiries, leading to satisfied customers and allowing companies to dedicate their staff to more complex customer service issues.
4. Improve Omnichannel Operations
Customers now expect retailers not only to have multiple channels for sales, marketing and service, but also to connect these channels to make their lives easier. This is one area where brick-and-mortar retailers can potentially differentiate themselves from online-only retailers, as the physical store, floor staff and customer service counter all serve as additional channels for customers to solve their problems and have positive interactions with a company.
Essentially, the physical store becomes an “anchor” that serves as a brand hub, giving customers multiple ways to buy and return products. However, retailers must tie these various channels together to avoid frustrating their customers. For example, when customers make purchases online for pickup in a store, they expect their products to be available the moment they walk in to pick them up. By integrating various channels, retailers can not only keep up with their online competitors, but also set themselves apart.
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