Retail IT has brought about a major shift in consumer behavior. The world has moved on from solely depending on brick-and-mortar retail shops to virtual stores. These stores are now accessible through various touch-points like traditional and mobile web, apps, emails, social media, chats, online forums and other channels. Research shows that modern consumers prefer to window-shop on online shopping portals. According to PwC’s Annual Global Total Retail Consumer Survey, conducted in February 2015, 31 percent of consumers use their mobile phones to locate stores and 49 percent browse products on it, while 49 percent use their mobile devices to compare prices with competitors. However, this statistical data does not necessarily indicate that brick-and-mortar stores have become passé due to digital channels. An online research by Google highlights that 71 percent of shoppers in physical stores admit that their smartphones have a key role to play in their in-store experience.
Despite the global economic slowdown in Retail IT, the fact that the retail sector has witnessed and is still undergoing a phenomenal change speaks volumes about its future scope for incremental growth. The rapid pace of the transformation journey in retail is being considered by industry experts as the third Industrial Revolution, with data being treated as the new currency. The only
difference between the two revolutions is that the contemporary revolution focuses on Big Data and data analytics, as opposed to being the catalyst for electricity or steam power like in the first revolution.
Highly informed customers and their evolved preferences pose a tough challenge for the retail industry to delve deep into the customer psyche and ever-changing buying behaviors to ensure a seamless customer experience consistently. Today’s customers are very active on multiple channels and are highly mobile, compelling the retail industry to change their approach of reaching out to their target audiences. In the retail scenario as demanding as this, Big Data and data analytics present the smartest solution for this sector to track consumer behavior and capitalize on the exciting opportunities that it has in offer. Retail Analytics is the one-stop solution for this industry to find answers to compelling questions that hold immense relevance in the competitive marketplace— customer needs and wants, buying frequency and pattern and promotions they will respond to positively amongst several others. The answers to these are available only through the following analytical process:
- Convert available data into actionable insights
- Drive necessary actions based on these insights
- Predict what is likely to occur and formulate measures to act upon them
- Influence future trends and occurrences for competitive advantage
Advanced analytics present an extensive portfolio of analytical techniques and tools that can be applied to address an extensive range of business concerns, enhance the accuracy of business decisions and drive value for their stakeholders. The indispensability of data as a driving force for incremental business growth has been perfectly defined by Splunk as ‘making data accessible, usable and valuable to everyone.’
However, simply concentrating on taking business decisions accurately is not enough considering the vast challenges that the retail industry faces. Marketing has shifted from simply telling a great brand story. Therefore, ensuring smart solutions in real-time is the need of the hour since it is one of the primary factors that differentiates data analytics from traditional business intelligence and enables retail IT to predict trends. A Survey by Strategy&/INSEAD highlights that a business that has achieved more than average performance with data-driven decisions surpasses its competitors by two to three times on parameters like profits, margins, sales and shareholder returns.
Some trends that are expected to define the future course of the retail industry become apparent when tracking the current evolution of Big Data. One of them is the ‘Amazon Effect,’ the art that Jeff Bezos’ brainchild has already mastered. Retailers have realized that, to be as successful and efficient as the online shopping brand Amazon, there is no other way but to follow their smart Retail Analytics model. This model that makes timely delivery, supply chain accuracy, extensive inventory and surprisingly low prices a reality is just what the retail organizations need to stay ahead of the curve.
As modern customers are omnipresent on omni-channels, offering them a seamless customer experience will become even more critical than it is today. Creating a brand presence on multiple channels and tracking the target audiences there offers retailers an edge over competitors in understanding how their customers interact with brands and transforms them into valuable insights. No wonder social listening has emerged as an integral part of the process of leveraging data and is expected to take on a role of paramount importance in the near future. Closely following customers on social media throws light on valuable nuggets of information regarding customer preferences, receive feedback and grievances regarding the brand products and sense a transition in customer behavior. This enables Retail Analytics to derive actionable insights with precision.
Last but not the least, Internet of Things (IoT), is believed to take the retail IT industry by storm too. A study conducted by Accenture points out that IoT will provide retailers with the opportunity to streamline supply chain, customer experience, revenue streams and open new channels of communication. Adjusting product pricing in real-time and tracking inventory by harnessing the powers of IoT will soon become a reality.