The retail industry is going through a challenging time around the world. Almost weekly, established retail chains announce store closings or restructuring strategies to address the competitive landscape, changing consumer shopping preferences, and the growth of online and mobile commerce.
NB: This is an excerpt from our latest eBook: 'The keys to retail success'. To download the full eBook, click here.
In May 2017, US retail sales recorded their biggest drop in 16 months, while in Australia, consumer sentiment over the first two quarters of the year “remained negative” for the first time since the global financial crisis in 2009. In the UK, “An index of consumer confidence published (June 2017) showed that Britons are feeling just as gloomy as they were after last year’s (2016) Brexit vote.”
In reality, most retail outlets around the world have needed to adjust their businesses in recent years, driven by increased competition and growing consumer spending online and via mobile devices.
It’s not all doom and gloom for retail, however, as many companies continue to grow, supported by strong commitment to data and analytics.
In Q1 2017, Costco posted 3% same-store growth in the US and globally. Success can be attributed in part to its collaborative retail exchange that allows suppliers to obtain daily sales metrics for their products so they can optimize supply and demand.
In April 2017, Tesco, the multinational grocery retailer based in UK, reported its first year of sales growth in country since 2010. The company is using analytics and real-time data to model trends in customer behavior, and to protect themselves against legacy and emerging competitors such as Amazon.
Wal-Mart saw revenues in Q1 2017 hit $117.5 billion. The company created an analytics hub called the Data Café, which is located in Bentonville, Arkansas. The tool “captures over 200 streams of internal and external data, including 40 petabytes of recent transactional data” so it can be “modelled, manipulated and visualized,” cutting down analysis from weeks to minutes.
Sephora is riding a wave of makeup industry success with a growing footprint that includes 2,300 locations in 33 countries. The retailer leverages its individual and loyalty data to optimize its customer segmentation, while blending its digital offerings with its physical locations to optimize the in-store experience.
Cotton On Group, an Australian-based fashion retailer that operates more than 1,500 stores around the world, surpassed $2 billion in revenue in 2016, and is adding 300 stores globally per year. The company uses sales and ecommerce data to deliver the product assortment that customers want more efficiently.
Data in the retail battle for survival
As struggling retail chain stores work through challenging conditions, data analytics is key to their success As the retailers mentioned above validate, winning in retail requires access to better data from across the operations to understand how products, people, and places are performing. One industry expert states:
Retailers generate and aggregate significant data from their customers, and increasingly more from other systems and departments such as marketing, HR and rostering, logistics and finance. Unfortunately, too often data from these areas resides in multiple locations and disparate silos, making it difficult for those that need it to access and analyze the information to create a complete and comprehensive picture of operations and sales.
In addition to accurate and timely data, executives and leaders from all areas of the business need to be able to turn data into insights, and insights into action.
For this to happen, they need access to powerful fit-for-purpose analytical solutions to help them identify trends; find out what products are selling, to who and where; and uncover opportunities to expand, contract, review and refine. They need business intelligence solutions that will make it easy to interpret and visualize the information, so less time is spent “running and reading” numbers and more time is committed to developing products, people and places that better serve customers. Data analytics is no longer something that can remain isolated in the IT department. It must be available and used by key decision makers and their teams across the business.
In this eBook, we will review critical metrics that every retail store needs to monitor and measure in order to compete in the modern retail world. We will also review how aggregating and analyzing your data can be done quickly and easily with the right industry-leading business intelligence (BI) solutions.
This has been a preview of our new eBook on the keys to success in the retail industry. Download the full eBook for free by clicking here or on the image below: