The Brave New World of Analytics and Actionable Items

In 1942, economist Joseph Schumpeter coined the term “creative destruction” to describe the painful process by which innovation and technological advances make an industry more efficient while at the same time — leave older, less adaptive businesses fatally wounded by the side of the road. Creative destruction has had its way with transforming the retail industry over the past 100 years. We are now clearly in the midst of Round 2 of this change, and the scope of changes that we have already seen vastly outstrips those of the past. The Internet, mobile platforms, social networks, smart sensors and smart shopping agents are transforming the way all consumers shop (not just the once “digital elite”), while simultaneously obliterating traditional retail business models.

Explosive growth in the amount and types of data collected by, and available to, retailers has created something of a conundrum for them. In the not-too-distant past, a retailer simply had store-level sales data, from which virtually all planning decisions were made. Today, omni-channel retailers — from sporting goods manufacturers to fashion retailers — are bombarded with flows of data that, with the right tools, could help them gain unique and actionable insights into shoppers’ behavior across channels. The key is having the right tools to uncover insights, as more data is well… just more data otherwise. With real actionable insights, merchants can ask new questions about how their processes work and then, take new action accordingly.

By enabling visibility through insights and analysis at a deeper level of detail than previously possible, retailers can accurately measure consumer interest in specific merchandise at any given point in the sales cycle. They can apply that knowledge from one channel to the next, understanding the implications of promotions on specific customers and customer segments, price on product performance, plan channel-specific assortments accordingly, and coordinate supply chain processes. Collaboratively, CPG and retailers can work together to enhance consumer needs and satisfaction.

The Retailers’ Quandary – Separating Facts from Fiction

Collection of the data that enables this deep level of understanding is now gathered with every click of a mouse, swipe of a card, fulfillment of an order and issuance of a digital receipt – in real time Yet, in spite of this technology and data explosion, retailers and CPG manufacturers appear to be struggling to understand how to find the information – and the affiliated actionable insights — within that data. If they can’t do that, how will they ever be able to make better cross channel retailing decisions to gain competitive advantage?

It’s not surprising that retailers are experiencing an increased sense of urgency to unlock the secrets of deep-seated analytics. In large part this is fueled by the change in focus from product to the consumer. Previously, when decisions were made based solely on historical sales and price, life was relatively easy. Now, competitive retailers must be consumer-centric, which adds a dynamic to the supply chain equation that requires insight into not only transactional data, but other new sources such as household panel data, plus demographic and syndicated third party market data along with data emerging from the social media.

The tracking tasks that consumer-centric retailers must measure can be mind-numbing. They must accurately measure demand by monitoring not just what was sold, but what could have been sold; not just what was bought, but what was searched; not just that it was searched, but why it was searched, when it was searched, and who did the searching. They must measure fulfillment of demand, within their brand and within the market at large. And they must analyze new sources of data, such as brand and product sentiment across multi-channels.

Using Data Science to Transform Information into Insight

Visibility is a prerequisite to supply chain agility and responsiveness. But before a retail organization can reduce or increase inventory, it needs visibility into the data that describes their activity. Only then can it apply tools to agilely adapt, segment, and ultimately control the information it collects. Improvements in revenue and profit margins can be derived from enhanced visibility, as can improved intelligence, and control of supply chain logistics activities. Gaining visibility requires much more than basic track and trace functionality. It involves a highly integrated or connected approach so that the loop is closed between planning, execution, and synchronization of end-to-end activities

Without actionable insights based on accurate data derived from connected interactions, merchants are left to unproven, non-scientific decision making and guesswork. This doesn’t facilitate the effective targeted consumer promotions, accurate planning, consistent pricing, and sound merchandising judgments that they desperately need.

Conversely, by gaining actionable insights to support smarter decisions by connecting siloed, cross channel sources of data and embedding analytics, retailers can leverage external data to optimize decision making across a now intelligent supply chain. Ultimately, by aggregating and reconciling key business metrics with company objectives, a brave new world of analytics and actionable insights is born. Brillio is operating at the cusp of emerging business models and technology, thereby creating a new know how and helping its customers be at the forefront of much needed disruptions.

~Written by Gaurav Zibbu
Director – Growth, Products and Resources at Brillio

Related Content: Learn how to be a true mobility partner by downloading Brillio’s eBook, “The Seven Things You Must Do to Succeed with Enterprise Mobility.”