In a rapidly changing marketplace, speed and a data-led customer experience are essential
While most senior retail executives recognise data and analytics as key strategic enablers, the investment in building such capabilities is seriously lacking. Some major retailers are practically shooting in the dark when it comes to understanding customer expectations and needs, and blowing their marketing budget in the process!
A global analytics study by Forrester Consulting on behalf of WNS1 shows that companies need to accelerate their data and analytics capabilities to realise the benefits of analytics-driven decision-making at scale. We highlight the key statistics from the study and three major takeaways to consider:
What Do the Numbers Say:
- 70 percent of retailers agree that customer experience and loyalty are core priorities linked to topline revenue growth. No real surprise here, particularly with the e-commerce boom lately; but
- Only 46 percent of retailers are actively investing in enabling technology, with only 11 percent having some cloud-based analytics capability in place today;
- Furthermore, 60 percent admit they face a lack of maturity in data management technology and 50 percent claim they cannot effectively process ‘big data’ fast enough;
- This is a real roadblock to gaining customer insights and is somewhat misaligned with the desire of 73 percent of retailers to build predictive analytics capabilities to grow their retail business;
- Finally, 77 percent of retailers are planning to implement Artificial Intelligence-enhanced Business Intelligence platforms (with 71 percent prioritising Speech Analytics above Text Analytics, Natural Language Processing and Machine Learning); and
- To get there, 40 percent intend to use third-party service providers to bring in the skills, experience, cost-effectiveness and speed needed for the transformation.
Top 3 business priorities
Do draw your conclusions from the detailed study, but to save time, here are our summarised thoughts:
1. Invest Effectively in Data and Analytics Capabilities
Cash, costs and margins are important for retailers. Still, a mindset change may be needed to invest in the data analytics capabilities that help retain existing customers and find new ones. Look around – it is no coincidence that your major competitors are creating Chief Data Officer roles to consolidate their organisation data. They also bring ecosystem, partner, customer, supplier, marketplace and industry datasets, as well as data services and applications data, into a single view – and all on the cloud.
‘What does the data say?’ needs to be the new catchphrase because gutfeel and years of historic retail experience are proving unreliable, if not redundant. We find ourselves in uncharted territory post the pandemic, with supply chain issues, Brexit realities, inflation and interest rate rises, and even the impact of wars.
Yet, organisations with advanced data and analytics maturity have seen revenue growth. Invest now.
Take a long, hard look at why there is a lack of maturity in data management technology and an inability to process big data. Is it people, process, decision-making structures – or perhaps politics? If these business cases are being overlooked and investment is not made, it simply needs to be addressed and fixed.
New e-commerce entrants to your market are now data-driven. They know their customers and their buying habits intimately and offer a seamless, personalised customer journey. Retail startups are pricing dynamically, enhancing loyalty schemes, and even creating new revenue streams through retail media channels. This is to name just some of the value analytics brings; the list goes on and on.
Top 5 challenges organisations face in executing their vision for data, data management, and analytics
3. Use Third-party Providers to Stay Ahead of the Competition
To put it bluntly, many retailers WNS works with generally ask for either skills that usually do not exist in their own business or want more ‘horsepower.’ The latter refers to their need for people to deliver the value of data and analytics projects at pace and to leverage, in a cost-effective way, our 4,000 data and analytics people at Centres of Excellence in every continent.
The right provider will have done the data and analytics journey many times before with other retailers. They will have supported strategy and design, mitigated risks, brought effective program execution control and therefore got the job done faster, showing quicker time-to-value / ROI.
Partners may also be prepared to co-invest in your business because your commercial success means mid to long-term commercial success for them as well. Test the market to see what investments are available with leading service providers.
The top benefits realised from implementing data and analytics initiatives are well documented. They include increased revenue, new products and services development, and improved customer experience and loyalty. Retailers must leverage the window of opportunity available to build their organisations’ data and analytics capabilities and ride out the current wave of unpredictability.
To accelerate your data and analytics journey now, click here and download your free report.
To find out more about WNS and the services they provide to the retail industry, click here.
This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.