Is Retail Data an investment opportunity or unavoidable cost?
Data is the New Oil
A critical strategic asset to retailing success in the current era is data. More retail brands have started to rely more on data-driven insights to optimize pricing, streamline their operations and improve their customer experience. Offline data from retail stores has become extremely crucial to tally with the data from online marketplaces. It leads to many cross coordination opportunities and brands and retailers should utilise to their fullest.
Data from online marketplaces gives invaluable insights on what engages consumers; it helps to differentiate consumers with respect to their engagement patterns and will help organisations to realign their customer’s journey and enhance their buying experience.
Smart brands were compelled to adapt to the massive disruption in the supply chain and in the new normal, they have to become digital.
Social media usage has spiked after the pandemic hit, brands and retailers are finding ways to engage thoughtfully with their followers.
However, it ultimately boils down to how we utilize the abundance of data available to us efficiently. When we merge all the data from online, offline and supply chain — there is more data than we can handle. We require an efficient engagement model to integrate, align and process all the collected data.
Retailers become visionary when they are able to recognise the data that they generated is valuable and collaborate within the organisation and with their suppliers to create win-win outcomes for themselves, suppliers and their customers.
It is recommended that the retailer take a long-term view to achieve commercial success.
There are two possible mind-sets required when sharing the data with suppliers.
The right mind-set drives incremental revenue complimented with transparency and the right level of collaboration in order to strategies and execute for mutual commercial success.
The Future of Retail in Australia
1. Retail offering revolves around meeting consumer demands
Customers’ ability to compare product quality, price and express their reviews has increased potentially. They demand the exact product they want, how and when they want it. Consumers are concerned on influencing products that provides wellness and healthy lifestyle. Studies have found that 40 percent of shoppers would value more green space. 85 percent of current generation consider environmentally friendly products compared with those aged 65+. By 2030, the present generation will be the workforce and consumer market, retailers need to have sustainability part for their branding and business model. It’s anticipated by 2030, most products will be free of plastic packaging. Brand loyalty and return customers will be key to retailer success.
2. Online retail is more efficient with packaging and delivery
Amazon is creating a streamlined approach using algorithms and machine learning to deliver multiple packages in a single delivery, increasing efficiency and reducing packaging. Online retailers will transform systems to reduce packaging and number of deliveries by 2030. Digital supermarkets will be implementing virtual products that eliminates delivery, stacking and store monitoring requirements. Enables customers with flexibility to shop anytime, anywhere and delivered at time of their choice. For retailers this means less space occupied because loading and storage will not be required, and customers will still be able to have a ‘shopping experience’ and the ability to browse a physical store. UBS estimates global food-delivery sales will grow tenfold by 2030. Grocery delivery will see high growth in online adoption due to convenience, safety and timesaving advantages. Meal kits will be popular, consumers will simply select recipes rather than individual products. As retail goes online, the floor space can be used as a mini-distribution centre to fulfil online orders effectively.
3. Flexible payments accepted anywhere through a single platform
New development of apps that integrates all form of payment methods and act as a single platform for payments. Retailers need to be flexible and secure in accepting all forms of payment mostly single-click or tap will improve the experience for the customers.
4. Manufacturers the new retailers
Advances in technology and supply chains will facilitate manufactures to be retailers eliminating the need for a distributor. This reduces overall costs and benefit for consumers.
5. Sharing economy has transformed retail requirements
A key driver for new industry of rentals of premium furniture where customers rent furniture rather than buying it cheaply. Many products are entirely reusable and it paves way for sharing economy, so customers will not need to buy something to use occasionally.
6. Big data is central to retailer strategies
Data analytics will help in tracking customer behaviour and inventory in real time. Customer data can help in personalising services such as tailored sales, promotions, loyalty programs and rewards