The volume and value of data in the retail industry are increasing exponentially each year. In this article, Toucan Toco experts explain how to transform retail data analytics into easily available information.
Why new consumers’ habits have transformed the retail market?
Consumers are less loyal to brands
According to a study conducted by Ernst & Young, we are witnessing a radical transformation in customer behavior in retail. Only 15% of American consumers are loyal to a brand. This trend is increasing among the “millennials” generation (Forbes – The Future Of Millennial Consumer Engagement). How to explain this phenomenon?
The observation of consumer behavior since the advent of e-commerce has provided some interesting answers… Digital channels have made it very easy for consumers to find similar products at lower prices on competing sites. They are also empowered to check evaluations, compare criticisms and therefore change brands according to the opinions expressed. they also look for coupons or promotions while they shop online, to be sure that they find the best price.
Another interesting observation, 82% of smartphone users consult their phones on purchases they are about to make in-store. This behavior leads them to make more rational purchases: they know exactly what they want when they arrive in the store and want to be able to find it easily.
Pure-players retailers have been able to take advantage of this conjuncture
In a few years, Amazon and other pure-player retailers have become major players in the retail market. In 2018, the company founded by Jeff Bezos reached a turnover of nearly 178 billion dollars. This success is largely due to value and service proposals that respond to consumers’ new purchasing habits.
Another important factor in their economic success: pure-players retailers have built their business model on the internet. Therefore, these companies have a high level of control over their user’s data – thanks to the use of web data-driven tools. It is easier for these companies to know the customer’s journey on the web – their access channels, the sites they visited before arriving on theirs or even the list of products they have consulted. This allows them to offer users highly targeted advertisements and offers.
Brick-And-Mortar Retail Is Not Dead
Despite the highly competitive arrival of pure-players retailers, consumers remain attached to physical stores. An interesting phenomenon testifies to this.
Many pure-players retailers invest in physical spaces, such as pop-up stores, to fill the virtuality of their customer experience.
The most obvious reason is that visitors find a customer experience that does not exist online: a human contact, expertise, without forgetting the possibility of testing the products and integrating the universe of a brand (thanks to merchandising).
Interesting data: conversion rates in physical stores are 20 times higher than in e-commerce – the average conversion rate for e-commerce is only 3% (all sectors combined).
However, Brick and Mortar retailers must reinvent themselves by integrating the best of digital innovation. This would allow them to better understand their customers’ needs and offer more personalized shopping experiences.
This change is already tangible. From a strategy of selling products in stores, the business model of many traditional retailers has evolved into a physical offer, complemented by an online offer.
Also, from a simple product sales logic, they have moved on to propose a multitude of third-party services (omnichannel): the creation of in-store workshops, the development of consulting services, customer service….
Why retail data visualization can help brick and mortar to improve their strategy ?
If Bricks and Mortar shops want to compete better against pure-players retailers, the improvement of their offer must be based on data-driven strategies.
However, the multiplicity of information sources and actors is detrimental to the proper collection of retail data in these companies. When retail data are collected are often difficult to read. This is where data storytelling can take place!
Data Storytelling is a method that allow Brick and Mortar to reduce competition from pure-players retailers.
Data Storytelling refers to the ability to tell a story with data customized to the audience. To build an image, a marketing director does not have the same reporting needs as an operational manager of digital campaigns. Data Storytelling analytics presentation provides access to and reporting of data that is specifically tailored to the needs of a department.
Thanks to our mobile solutions, interactive dashboards make it possible to adapt the execution of each department’s actions to your company’s global strategy. Your stakeholders involved in monitoring certain retail data have access to the same key indicators and can easily share them. Let us review some of the concrete contributions of these solutions.
From an organizational point of view:
These solutions allow you to align operational strategy choices with retail data related to your company’s activity. It must be noted that within many retail companies, there are still gaps between operational decisions and the data used by each of the departments.
Why is this point particularly recurrent in the retail sector? The particularity of this industry is that there are many information systems and data sources. Because it is numerous and difficult to prioritize, this information is often poorly communicated.
This leads decision-makers to rely more on their instinct or experience than on objective information.
By enabling your decision-makers to base their sales, marketing, financial or HR strategies on reliable and easily readable data, you can ensure that the operations implemented are consistent with your company’s situation!
The decision-makers in your company are able to:
- Quickly obtain information from reliable retail data to make the right decisions at the right time.
- Discover new opportunities to increase your turnover or achieve efficiency gains.
- Present and understand the data in a way that demonstrates the value of their actions.
- Explore omnichannel marketing impact in understanding customer behavior as it relates to campaigns, using online and in-store data to create heat maps and compare behaviors
Store managers and sales assistants are able to:
- Create real-time connections with customers according to their purchasing desires.
- Take advantage of real-time analysis of in-store promotions, allowing increased in-store decision-making.
- Capture behavioral data as well as transaction data to develop personalized loyalty interactions with different types of consumers.
Using a data storytelling software provides a holistic understanding of what consumers want at each stage of their customer journey. This allows Brick-and-Mortar to solve one of their main pain: creating value from extremely disparate data sources.