Retailers are fully aware that their future relies largely on their ability to use data efficiently. ?However, in today’s dynamic and highly competitive retail sector, retailers need to accelerate their plans and commit resolutely to the path of data monetization.
Data has become an essential resource and a key element in the growth strategy of large retail organizations. The 2019 CGI Client Global Insights reveals that harnessing the power of data analytics to drive real-time insights and improved personalization for new revenue streams is a top business priority for the retail and consumer services executives interviewed. Harnessing data—be it to anticipate future consumption trends, refine sales forecasts, optimize inventory management and replenishment, or improve customer experience—has become crucial to delivering greater value to customers and the business.
Learning from pioneers
In one way or another, data is at the heart of every customer interaction and remains an invaluable asset for growth for retailers and consumer packaged goods organizations. The growing significance of data in retail is unquestionable. In fact, after a few years of experimentation, a number of organizations have formed strategic partnerships with some of the “Big Five” or GAFAM to benefit from their experiences in using data.
European retailers Carrefour and Fnac-Darty are exploring data-focused alliances with Google, while Intermarché is teaming with Microsoft, to name a few examples. Retailers have the opportunity to learn from the expertise of organizations that have built much of their success on data mining. Ignoring their experience could dramatically limit retailers’ performance, while learning from them can open a world of new opportunities.
Advancing omni-channel strategies using data and emerging technologies
Today, retailers have the opportunity to make significant progress toward enhancing omni-channel strategies by using data and emerging technologies. For example, the partnership between European retailers Carrefour or Fnac-Darty and Google focuses on voice commerce, allowing customers to order directly through the Google Assistant and connected speakers like Google Home. Personalizing the omni-channel customer journey using artificial intelligence is another area where marketers can benefit from the experience of front-runners.
Achieving next-level personalization
Data enables levels of personalization that have never been achieved before, as demonstrated by Amazon, which has mastered the art of pushing recommendations for highly targeted products. In fact, there are many opportunities in this area, such as personalizing product descriptions or enhancing the general aesthetics of a website to align with the buying habits and preferences of each customer.
Indeed, using data to enhance personalization is foundational to any efficient omni-channel strategy. Physical points of sale (which globally still account for around 86% of retail sales in 2019, according to the Global Ecommerce 2019 report) can take advantage of customer data as much as e-commerce sites to improve supply chains and enhance customer experience. Data now makes it possible to offer optimized customer support in stores, for example, by personalizing fitting rooms or shelf displays. In fact, the various screens of a point of sale, including small screens/labels of a shelf display, can adapt in real time to customer preferences. The in-store customer journey can be enriched further with meaningful related data. Take Yuka for example, an app that scans barcodes of food and personal care products to provide information about the ingredients, empowering customers to make highly personalized choices.
Anticipating the needs of consumers
However, this is only the beginning of the data journey and retailers must go further. They must now explore opportunities to monetize data, which can only emerge by providing new services that bring real added value to customers. For instance:
- Optimize manufacturing value chains: For many years now, retailers have been monetizing data like monthly sales, POS receipts, warehouse output recordings and more. In the future, retailers will be able to monetize marketing and sales data to enable manufacturers to refine, for example, the composition of products, better anticipate buying trends and purchasing volatility, and other benefits.
- Extend product and service offerings: Retailers can use historical purchases data to extend subscription models, pre-load baskets with products that customers will only have to validate, or identify and provide additional value-added services.
Using data to anticipate customer needs will undoubtedly be the next step for retailers to make the buyer’s journey easier and more seamless. While data monetization through innovative services is still in its infancy, more and more retailers are beginning to show greater interest in monetizing data, which will offer opportunities to shape new business models and build the future of retail.