New research finds that retail businesses are generally more receptive than others when it comes to using data to understand more about who their customers are, what they want to buy and how they prefer to shop.
The future data landscape was the focus of the study by The Economist Intelligence Unit, in partnership with Snowflake. It surveyed 914 global executives across eight industries, including 117 from the retail and consumer goods sector (referred to as retail in the report).
The results revealed that respondents working in retail and consumer goods were most likely (41 per cent) to see a potential opportunity to increase customer/client satisfaction and experience from utilising data-driven insights, compared with a survey average of 34 per cent.
Other big opportunities they identified – again focussing specifically using data – was expanding their customer base (32 per cent versus 29 per cent). This was followed by revenue/profit growth and developing/improving new products and services, each cited by 31 per cent of respondents from the sector.
Retailers were also shown to hold customer data to a higher value than other industries. With 59 per cent saying that it is the most useful source of data that they have, compared with an average of 49 per cent.
However, on the flip side, retailers are also more likely to see data privacy regulations as a challenge (cited by 68 per cent, compared with a survey average of 56 per cent). Likely due to GDPR, says the report.
Looking to the future, over the next three year, 43 per cent of retail respondents said they planned to invest in AI and machine learning tools as a top priority. While 48 per cent were looking to improve their data infrastructure to enhance their data capabilities.
Julien Alteirac, regional VP UK&I at Snowflake, said: “The Covid-19 pandemic has upended the retail industry, causing many companies to re-evaluate their business models in the face of physical store closures and indefinite phases of market uncertainty. However, retailers have a unique opportunity to navigate these challenges and drive success by utilising data that will develop their understanding of the customer. In an increasingly competitive landscape, customer experience will be the key battleground for continuing success.
“The days when intuition and guesswork influenced decisions about what to put on shelves, which promotions to run, and which price points to set are now past. To compete, retailers need a 360-degree data-based view of their operation and supply chain and a deep understanding of their customers and the products they will buy. Collecting and analysing data is a crucial part of this process.
“Fortunately, retail is already rich in such data, fuelled by point-of-sale systems, online transactions, loyalty programmes, product reviews, social media posts and web clickstream logs. Once this has been harnessed, businesses can make informed decisions based on data-led insights and analysis. Delivering on the promise of customer personalisation translates to tangible business benefits for companies that can do it successfully – raising the rate at which shoppers are converted into customers, increasing customer lifetime value, and cultivating higher customer satisfaction.
“In the years ahead, we will see more retail organisations capitalising on a data sharing ecosystem whereby data can seamlessly and securely be shared among external parties such as supply chain, partners and customers. While increased investment in ML and AI tools will help automate the process of data analysis and therefore allowing for improved integration of external sources. COVID-19 has forced a profound and fundamental transformation in modern retail. Tapping into consumer data will be vital staying on top of these changes and remaining competitive.”
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