CEOs are under immense pressure from shareholders to run profitable businesses that pay dividends. The challenge for retail leaders is how grow in a tough economy that has weakened consumer confidence.
Shoppers today continue to watch every penny, looking for high value details and using different channels to research and compare products and prices. This frugal spending has hit retailers hard, resulting in many CEOs giving their keys to the business to administers. Something needs to change.
Retailers have a huge opportunity to turnaround their businesses by getting closer to their customers. However, the problem they face is a lack of insight into customer behaviour and attitudes. Without this basic information, CEOs are unable to make informed decisions on where to identify and plan efforts to win-over shoppers.
Retailers could be leaders in big data adoption
In my 20 years in the retail space, I have seen numerous companies fail to capitalise on the large volumes of information they have collected on customers. On the one hand retailers are leading the market in collecting data but on the other, they are failing to make sense of it all to give shoppers what they want - targeted, relevant deals and the right products.
Now, more than ever, retailers must be equipped to effectively analyse and react to customer intelligence in real-time. They must understand their customers by creating a single view of them and responding in a way that is engaging, relevant and personal. Amazon is an excellent example of a business that effectively uses Big Data to automate recommendations for customers based on their purchase history. It also uses predictive analysis to target customers around future availability of products, such as books and CDs, so they can order items in advance of the release date.
Effective use of information and insight also gives retailers the opportunity to identify issues like missed sales (in-store and online).
A good example is lingerie retailer Bravissimo which used web data analysis around mouse movement, conversion rate, and screen size to increase the sizing guide on its website. This change resulted in increased sales by £2m the following year.
4 tips I recommend every forward-looking CEO consider when evaluating whether his or her business is getting closer or further way from understanding its customers
- Know your customer. Go out and experience how your customers interact with your brand, in-store and online. Is it a seamless experience or have you put up barriers that put-off or make it difficult for shoppers to spend with you?
- Ensure the business is aligned. Is your entire organisation working towards achieving the same business goals such as improving customer retention? It's imperative that the different parts of your business, such as e-commence and fulfillment, are not sending out conflicting messages and customer experiences
- Value your data. Based on your organisation's goals, are decision makers empowered with the data required to effectively identify, improve and monitor the user experience across different channels?
- Exploit new technologies to gain new insights. Is your organisation, for example, Mobile First? Does it even have a mobile strategy? Steffen Boelaars has written a good blog "Is your organisation 'Mobile First'? Empower your shoppers on the road."