Data is now at everyone’s fingertips, at every level of every business. The analysis of that data and optimisation based on the insights yielded is another story for many operations, writes Stephen Duncan.
As retailers we are constantly managing transactions, from purchasing to promotions through to sales and service. The question is, are we capturing it efficiently and translating it effectively?
There are a number of touch points that make up a holistic approach for effective data analysis and strategic implementation, with each component having its own set of challenges to the business. In part one of this article we look at two of the four components being creating a strategy and understanding the appropriate channels from where we’ll be acquiring it.
It goes without saying that having a strategic approach to managing the capture, collation and output of data is critical. This is more than simply ensuring that we have a suite of standard reports, such as sales by product group or gross margin return on investment.
Correct and effective strategy requires us to achieve a ‘forest view’ of the information we need to publish to all levels of the business that drives the operations based on past, present and future insight. This might be where we need to expand our data scope and output and potentially look at what inputs are seen as unstructured data. For example, Gartner found businesses that enable their sales representatives to leverage data on a day-to-day basis stood to increase revenue productivity by 17 percent. That could be a considerable increase for many retailers, although there still seems to be issues with collecting and providing the relevant information to staff in real-time.
Tracking, analysing and publishing data with its considerable variety and velocity can prove cumbersome. Many businesses will embark on a complex merchandising and allocations program with the goal to predict and ensure the appropriate stock is in store or online, although much of the intelligence on the actual floor or website is either not translated back to head office or exposed to staff quickly enough to increase productivity where it matters most.
Does this sound familiar? Like it or not, many businesses grapple with not just the technological elements involved in leveraging data – whether big or small – and if this is the case for your operations, it’s crucial to begin by being frank about your strategy. Perhaps your approach needs to be revisited before significant, positive outcomes can be reached.
What data and where it will be coming from is another challenge, one that retail ventures in particular are continuing to struggle in regard to sales.
From sales per hour, to basket size and gross profit, there’s a mountain of transactional data that our IT systems might already be capturing for analytical purposes. But what about the non-transactional aspects of our retail environment? Is there a channel of information that we are yet to capture?
With the rise of Big Data – or large amounts of data/unstructured data – there has been an increase in market insight not seen previously. Big Data has been linked to predictive analysis; take, for example, discussions regarding your specific business or the market captured via Twitter or Facebook. Customers might be speaking to their desires, future transactions or even frustrations. These conversations could provide not only a directional path but form the future framework for our business processes.
Then there’s that more localised data that speaks to business directly.
For example, the weather or average localised temperature are both variables that might provide valuable insights into buying patterns and this supports benchmarking between locations. We might all agree that the weather is getting warmer but how does this translate to sales during those periods and how do we reference this against hard transactional data in the future? A snapshot of the number of car spaces available throughout the day, events such as sporting matches or local theatre all create anomalies in spending patterns that our historical data simply doesn’t have the means to interpret.
Stephen Duncan will continue his discussion of the many challenges that businesses face when striving to analyse and affect meaningful change using data in next week’s instalment on this series.
Also, REGISTER NOW for our webinar, presented by Stephen Duncan, entitled ‘Retail 20/20: Enabling a Clear Customer View’. This informative audiovisual presentation – scheduled for 1pm AEST, November 28 – will provide insight into how to overcome these challenges, alongside real case studies from a variety of businesses.