5 Ways Retailers are Crazy Good at Using Data
Retailers Who Know How to Use Data…
… are basically unstoppable. Being well-versed in data for retail can unlock the ability to rock conversions, see into the future, and, perhaps most importantly, prevent fraud instantly. Recognizing the importance of data and knowing how to use it is like unlocking all the secret levels in a video game, but instead of just enjoying the satisfaction of beating the last boss, retailers experience the evergreen satisfaction of improving all business operations for the long-term.
What Exactly does Retail Data Entail?
Data comes into any organization from a vast array of sources. For retailers in particular, these sources could include customer activity on their website, competing retailers, social media engagement and platforms, the list goes on. Although data is important, this information often does not come wrapped neatly in a bow nor in one standardized form, so how does data become usable for gained insights and actionable knowledge? Integrating data from all these sources requires data quality routines that standardize, verify and clean disparate data to enhance focus and make it more usable. Let’s see how using clean data affects the retail industry.
Rock the Customer Experience
A recent survey showed that 48% of shoppers have left a brand’s website and completed purchases elsewhere because their experience was poorly personalized. We’ve explored various customer retention strategies and found that the customer experience is now king. A few ways to use data to personalize the customer experience include:
- Adding recipients’ names to email and marketing messages
- Tailoring loyalty programs to specific tastes and preferences
- Using purchase history, location tracking, time spent on various sections of the websites, etc. all to personalize promotions and create specialized offers
- The possibilities are endless…
Crystal Ball of Trend Forecasting
Using accurate data to forecast trends can be a critical advantage on the retail stage. Now, because data is so easily accessible, it has taken much of the guesswork out of trend forecasting. Analyzing historical sales records, current sales trends and many other data-points can make sales predictions highly accurate. For example, a fashion retailer may use data-driven trend forecasting to fine-tune predictions in color, trim, accessories, etc. and predict what will be in vogue when, to better time their product launches.
Design Effective Marketing Strategies
Traditional marketing strategies were based solely on historical sales data. Today, retailers have access to data from so many sources that it allows them to create a more detailed customer profile and reveals unexpected insights into their behavior. Social media, for example, can tell marketers where to place their ads for highest visibility. These marketing maneuvers lead to higher conversion while reducing customer acquisition costs. Plus, retailers can easily quantify their impact and make adjustments as needed.
Improve supply chain efficiency
By utilizing clean addresses and converting them to precise rooftop latitude/longitude coordinates (geocoding), retailers can analyze their sales data to recognize trends in the relationship between specific localities and sales. For example, if a specific locality in a large chain of stores is purchasing more rain boots than another location, the retailer will want to increase their stock of rain boots in that specific locality and optimize pricing per demand. This could also be utilized to boost collaboration between business partners and make the supply chain smoother and more efficient. Traffic congestion can also be analyzed to find the fastest and most fuel-efficient routes.
Detect Fraud Quicker
There are multiple ways to detect fraud in the customer funnel. One way is to determine whether the IP location of a customer’s activity matches the billing address or shipping address of the purchase. This is a big red flag for fraud and may be flagged or blocked for suspicious activity before the purchase is even made. Further investigation may ensue, otherwise a fraudulent transaction is averted in one simple data check.
Retail – You’ve Got it Made
62% of retailers who analyzed data to make business decisions found that it gave them competitive advantage, deeper customer insights, revealed hidden patterns and correlations, and identified business requirements that, in turn, helped the organization tailor its infrastructure and service to help the business grow.