Why Data-Driven Decision-Making Will Define the Future of Retail

?This article was originally published on Retail Touchpoints

?When the first department store?opened ?more than 100 years ago, the goal was to offer a multitude of specialty goods to a large number of people. Today, online stores serve that same purpose, but brick-and-mortar retail remains a powerful mechanism for both buyers and sellers.

Providing consumers with the ability to see, touch and experience products firsthand, physical shops offer a degree of instant gratification that simply cannot be replicated in an online environment. Delivery is getting faster, but the magic of in-person shopping will forever be an important driver of commerce.

That said, there have been a few bumps in the road. With a crowded market of both physical and online retailers, many brick-and-mortar retailers have?confirmed ?their plans to close, but that’s the natural order of the industry. Changing trends, both in consumer tastes and shopping habits, make way for new entrants to deliver satisfactory results — and those that fail to do so are unlikely to last.

Now, on top of the usual challenges that retailers face — fickle consumers, stiff competition, product availability and pricing pressures/low margins — they must go above and beyond to fulfill shopper demands. Supply chains are more critical than ever; if retailers can’t get the necessary product, consumers will look elsewhere.

Even with the most desired products in stock, retailers must build and maintain a strong connection with shoppers to ensure that engagement doesn’t wane. Both of these are among the aspects that rely on quality data and analytics, especially as retailers continue to evolve digitally and physically. To keep up — and keep customers coming back — retailers will need to use data to answer their most pressing questions, including those they didn’t even know they had.

Data Provides the Clarity and Actionable Information Retailers Need

Contrary to popular belief, online and in-person shopping are not mutually exclusive. A consumer may visit a retailer to examine an item before ordering at home or research the item online before heading to a store. These are important developments in the world of retail, and they have helped pave the way for a hybrid form of commerce that enables consumers to shop whenever and wherever they please.

This hybrid evolution requires retailers to pay extra special attention to consumer shopping behaviors, purchasing decisions and overall trends. In order to do so, they’ll need to combine all of their data — across all possible channels — to gain a complete view of customer buying habits and preferences. In a world where inventory management and store performance goals are critical, the ability to easily see, work with and take advantage of that data has never been more vital.

Data is also crucial to the success and prosperity of brick-and-mortar establishments. Retailers can no longer afford to merely stock the shelves and racks and call it a day — they must now work to transform their physical stores into customer engagement centers.

Consumers want to know that when they have a question or concern, they can turn to someone for quick and efficient answers. They also want to know that when they do order something for delivery or in-store pickup, they will be able to receive or retrieve their item as quickly as possible. By using physical stores as supply chain hubs, retailers can satisfy that demand more effectively than if they were to rely on warehouses alone.

Data is invaluable in achieving each of these objectives. By using analytics that are powerful and easy to understand, store employees can make smarter decisions right at the shelf, with the customer, or in the back office. Data is also essential in deciding where to open new retail locations, as they must serve consumers coming in as well as those who are ordering from home. Retailers can use spatial analysis of an environment — including customer distribution, customer behavior analysis and drive-time calculations — to make informed, site-specific decisions and ultimately determine the optimal location of a new store.

Drive Engagement and Satisfy Customer Needs With Data

As important as data is, the information is only as good as its usability. If the people who need it can’t take advantage of it, data can’t serve its purpose. To that end,?URBN ?— the retailer brand encompassing Urban Outfitters, Anthropologie, Nuuly and others — is democratizing in-store decision-making to provide its staff with the insights they need when they need them. With access to an array of dashboards and reports — updated with fresh data every two minutes — URBN employees can immediately view integral information at exactly the right moment.

This empowers store employees to better supervise inventory, monitor sales, assess store demand and understand trends — all via mobile devices that can be used right on the shop floor. By consolidating three previously separate reporting locations into one central analytics hub, URBN is also becoming more efficient. Instead of searching for insights and answers from three different places, URBN staff are able to perform their job with greater speed and agility and spend more time focusing on customer engagement and satisfaction.

Kendra Scott, a leading fashion lifestyle brand that specializes in jewelry, home décor, gifts and beauty, is using cloud analytics to improve its business. Staff across numerous departments, including sales, marketing, finance, operations and sourcing, have been using cloud analytics to drive the retailer’s digital transformation. Cloud analytics are especially beneficial because they enable staff to obtain near-real-time insights throughout retail stores, ecommerce, BOSS and BOPIS sales in a self-service environment.

Use Data to Adapt to Consumer Tastes and Buying Behavior

Retailers are evolving. They’re becoming engagement centers and supply chain hubs, effectively solidifying their position as a place for more than trying and buying products. This is a notable development in the growth of the industry, which is learning to adapt to consumer tastes and buying behaviors. But they can only make these changes — and fulfill shopper expectations — by using data and analytics.

Data informs action, revealing which path to take in a crowded and highly competitive market. At a time when many retailers don’t know what to do, data has the answers, providing a map for success that doesn’t rely on assumptions or guesswork.

About the author

As the Executive Vice President of Strategic Clients at Qlik, I lead a multi-disciplinary team that blends sales, value engineering and consulting services. My teams advise strategic clients on their digital and data transformational strategies for large enterprise customers to maximize the value of their overall investments in data, and in Qlik’s data integration and analytics platforms. If you would like to discuss how your organization can start leveraging the full value of your data, please feel free to get in touch with me at [email protected] .