The Key to Achieve Retail Success? Be More Data-Centric.
A lot of retail businesses understand the importance of data in order to thrive financially. Companies invest thousands of dollars in data collection tools and that’s a great start. But the cold hard truth is that, for some of them, their data is useless because they lack the knowledge on how to analyze it, and then leverage it to become more and more successful. According to a survey by Alteryx and DetailWire, 81% of retailers say data collection is part of their business plan and 76% claim they see it having an impact on their sales. However, only 16% consider themselves to be experts in data analysis, while 60% say they’re “getting there”. Let’s take a deeper look on what tools they could use to become data masters.
Covering The Basics
The first step into leveraging useful data would be to use the right tech tools. An interesting way to collect data is by using your point of sale (POS) system to gather information about your profit margins, basket sizes, sales trends, and so on. For example, online store owners need to know what areas their customers are buying from, what items they click on, and which ones of them are being converted into sales. Knowing which items stay in the cart without being bought and the amount of time their customers spend on their website before leaving is also crucial.
For brick and mortar stores, a key metric is the sales conversion rate. That’s why foot traffic analysis is so important to retailers who want to know how many customers come in store and how many of them are actually buying their products. If the sales conversion rate is not satisfying, the brand then needs to work on a strategy either to make the store more appealing or train their staff to be more “sales savvy”.
Taking It Further
Now, having this kind of data in hand is interesting, but how does one make it profitable? Retailers can use the data they have in store to make tailored recommendations to their loyal customers and to reach to those who are hesitant. For example, fashion retailers Aldo and Little Burgundy send a friendly email reminder to their customers who leave items in their shopping cart. By doing so, they prompt the customers to reconsider their purchase, which results in increased sales.
Another example is video game retailer GameStop, who uses data from its loyalty programs to gain insights on their customers’ interests and preferences. This data can later be used to create a more intuitive shopping experience for the client, being able to make further suggestions, offer promotions on preferred items, and more.
Survey feedback data and online reviews are also a gold mine for retailers. Clarabridge, a customer intelligence platform provider, has helped companies gain more customer retention by improving both their digital experience and the customer rewards program.
Using the data collected to create shareable content, like social media posts or infographics can also be an interesting way to make businesses more profitable by engaging with new customers with high-quality, curated content.
Providing better customer service by using the right data — the right way — is the goal that retailers should all aim for.
