Incorta | eBook

REIMAGINE RETAIL ACROSS EVERY INDUSTRY, DEFINING AND DEFENDING A BRAND’S COMPETITIVE FUTURE DEPENDS UPON THE COMPANY’S ABILITY TO LEVERAGE DATA, AND QUICKLY. RETAIL IS NO EXCEPTION.

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Table of Contents

Data is the Key to Competitive Advantage

Retail’s New Reality

Pivoting to Meet Rapidly Changing Customer Preferences

Retail’s Secret Weapon: Data

Actionable Insights with Unified Data Analytics

Driving Valuable Change from Insights

Transform Retail with Real-time Data

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I N T R O D U C T I O NOnly when we empower employees and business leaders to ask the hard, curious questions about their customers, their supply chains, and their futures – we can then reimagine retail.

The key to reimagination and competitive advantage is data and it starts now.

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A CUSTOMER-FOCUSED LENSAlong with many other COVID-19 consequences that will last long after the pandemic ends, comes the demise of a concept around which many retailers built core strategies and even complete businesses: channel-focused retail management

Managing a retail business at the holistic channel level once was a very relevant—if hypothetical—way to bridge the online and physical storefront worlds. It came about as a way for retailers to view and understand buying behavior across any channel and any device with a goal of delivering a superior and consistent customer experience across all.

In the past, many retailers dedicated one team to managing its online business and another, separate team to managing its brick-and-mortar stores. The result?

No one focused on analyzing and understanding the complete, integrated shopping behavior of each customer.

Maybe this separation wasn’t such a big deal before. But evolving consumer behavior and unexpected market shifts caused by factors like the pandemic are pushing the concept of analyzing a business exclusively by channel quickly toward obsolescence: what initially were fairly clear boundaries between online purchases and those made in stores now are increasingly blurring.

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Today, online customers and in-store customers are the same customer. These customers constantly evolve over time, becoming more and more sophisticated in the ways they shop. Due to COVID-19, for example, many shoppers who historically purchased in-store shifted seamlessly to buying online and picking up in-store (BOPIS) or picking up curbside (BOPAC).

As a result, the channel through which a customer purchases product is in reality a very small part of the overall customer profile. Now more than ever, retailers need to deliver the right product, to the right place, at the right time to keep customers coming back for more. That means understanding all of these things:

Only by analyzing customer shopping baskets, shopping frequency, and shopping patterns in this detailed way will retailers gain the insights they need to adjust assortments, inventory levels, and pricing to meet ever-changing customer needs.

That’s because a comprehensive understanding of each customer’s lifetime value—which is what this kind of detailed analysis provides—is what’s needed to give retailers a marked roadmap of where customers have been and, more importantly, where they’re going.

What they buy?

Which product did they buy? How many units did they buy?

Where they buy?

Which channel did they use to make the purchase? Where within that channel was the purchase made (i.e., specific store location)?

When they buy?

In which month/on what day/at what time did they make the purchase? How often do they make a purchase?

Why they buy?

Did their behavior change in some way with this purchase (e.g., did they shop more promotions this year, did they shop regular price merchandise this time, how did we target them to bring them back into store, why did they shop in the spring but not in the fall, etc.)?

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STRATEGY PIVOTNot too long ago, retailers felt confident their businesses could continue to prosper with familiar and steady changes to their business models. And they were right. By making simple adjustments to factors like assortment offerings, inventory levels, marketing messaging, promotional offers, or pricing, retailers could overcome most of the typical challenges they encountered.

But COVID-19 and the turbulent markets that followed, changed all that. No longer will tiny steps and simple strategy shifts work to combat the challenges rising up against retailers today. To effectively compete—and to survive—businesses that still exclusively or primarily sell products via brick-and-mortar stores must be able to immediately and nimbly pivot more sales online—and quickly identify areas and opportunities for improvement as they go.

Luckily, today’s retailers don’t need to completely shift away from physical storefronts in order to sell online. Many more variations—shades of gray if you will—exist today than ever before.

Keep in mind, pivoting more to online isn’t purely a go-to-market shift for retailers—it’s also a pivot in how they understand and apply data to the business decisions they make.

Retailers primarily use internal data in their analyses because they want to understand what is happening in their business. But this simple, internal-only approach to analysis may not be enough to glean insights into why customers behave a certain way or why results differ from one market to another.

Now, most retailers need to analyze both internal and external data and look at that richer data through many more lenses. They need to understand the behavior of their consumers more intimately—and the impact of that behavior on the purchasing decisions made by them—at a much deeper level. Even more importantly, they need to understand not only what trends are happening across the country, but why those trends are happening—they need to understand the factors igniting or influencing a trend.

$300Blost in revenues

Inventory misjudgments at non-grocery retailers in the US account for roughly $300 billion lost in revenues due

to markdowns in 2018 (~ 12% of total sales)1

1, “2020 retail industry outlook: Convenience as a promise,” Deloitte, 2020

For instance, retailers with an existing online presence might choose to:

• Shift more business online, so online becomes a larger sales channel for them

• Offer additional options to appease temporary or permanent consumer desires—like the new “buy online, pick up at curbside (BOPAC)” option that came about because of the pandemic and quickly became a consumer favorite

• Growing popularity of existing options like “buy online, pick up in store (BOPIS)”

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DATA TO SUPPORT A PIVOTBy applying—in parallel—internal and external data, retail businesses can gain these kinds of insights and make recommendations for business improvement faster than ever before.

For example, by analyzing select external data, a retailer might decide to modify its inventory based upon how the weather conditions, price of gas, or a rising unemployment rate affect consumers’ purchasing decisions in a specific region.

Another timely example, by adding publicly available COVID-19 infection rate data from Johns Hopkins University to their analyses, retailers can better understand why customer behavior in a region has changed due to the virus. Data supports pivots such as:

Data Supports Operational Pivots:

• Add new assortment in specific regions to meet a temporary need related to the virus (such as selling hand sanitizer or face coverings during the pandemic when the retailer doesn’t stock it during the normal course of business)

• Communicate with customers on a market-by-market basis to deliver important, relevant information about inventory levels, special pricing, or new buying options in their area

• Stock more inventory in certain regions for categories or attributes (such as at-home fitness and outdoor products) trending there during the pandemic

• Tracking new types of shopping like BOPAC on a location-by-location basis

• Offer customers in some regions more aggressive pricing to keep sales and inventory moving

• Customized messaging by market/account to specifically acknowledge and better support the situations faced by its customers

When retailers pivot like this, it suddenly becomes clear how to use unified internal and external data to nimbly shift their business to appease fast-changing consumer preferences.

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BRINGING DATA TOGETHERIn January 2020, at NRF 2020, Microsoft CEO Satya Nadella made this statement: “The fact that there is 40 petabytes of data that is generated every hour in retail is what, in some sense, is shaping the entire economy. This data is the demand signal for the world. And the question is: what is it that we are going to do collectively as an economy; as a society? What is it that you, as retailers, are going to be able to do with this data? And that’s I think perhaps going to shape not only retail, but all of the economy going forward.”

Retail has focused in recent years on leveraging their data to improve customer experience, retention, and revenue. As the data demands on retail continue to increase, retailers will need to “translate” or “carry across” more data within their enterprise.

To truly pivot, retailers need to bring data together and translate it for unification across their enterprise in order to generate insights. But unifying data is not simply about bringing it together all in one place (e.g. moving all of it into a data lake). Rather, to really unify data is “to make whole”, so it can be utilized, explored, analyzed, and acted upon at the pace of a consumer’s expectations—and it goes beyond point of sale (POS) data in-store and/or online, to now include mobile engagement, promotion, marketing, inventory, enterprise resource planning (ERP), and financial forecasting data.

In an always-on, omnichannel world, this might mean using unified data to:

RetailOmnichannel

Data UsesIn an always on, omnichannel world,

unified data can be leveragedin many ways.

PredictPredict how a consumer’s purchase history will influence future shopping decisions and buying patterns.

DiagnoseDiagnose the reasons behind abandoned online shopping carts.

Target and DeliverTarget and deliver to consumers in different geographic regions the marketing messages most relevant to them.

AnalyzeAnalyze the contribution each channel delivers to the company’s revenue and profits.

PersonalizePrescribe personalized messages to compel a buyer to complete a stalled purchase.

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HIGH-VALUE INSIGHTSOnly by truly unifying data can it illuminate high-value insights that can be shared across the retail organization—from supply chain, consumer insight, revenue management, merchandising, assortment, and category management to pricing, promotion, and marketing. And by unifying data retailers will be able to create entirely new, curiosity-driven insights from their data, empower employees to ask questions, and foster those same employees’ curiosity.

It’s not as difficult as you might think. Technology, such as Incorta, now exists to do this data unification. Incorta changes the way data is carried over across the retail enterprise. Data translation doesn’t rely upon multiple, complex, and often-fragile legacy data “ambassadors” (think ETL, data warehouses, data marts). Rather, Incorta’s Unified Data and Analytics Platform (UDAP) rapidly connects to data, maintains data’s fidelity from source through to insight, and provides a single platform for joining all and any data from any source.

All of this matters because Incorta’s near-instantaneous data translation lets any department in the organization immediately answer their own questions by directly accessing, analyzing, and visualizing data that’s no longer siloed—from consumer insight and shopper marketing, to merchandising and inventory management. Retailers can pivot much more quickly and easily increase their sales and margins and foster more intelligent supply chains. They can better navigate the unfamiliar, troubled waters in which we all find ourselves.

Unified data and analytics platforms (UDAPs) like Incorta are so powerful because it’s not a lack of insight that prevents many from analyzing their data – it’s largely inaccessible buyer and shopping information saved across different parts of the business. It’s the disparate and disintegrated information making it difficult, if not impossible, to complete the rich, integrated analyses that are needed.

Incorta, for example, encourages a retailer’s curiosity, so they can derive the valuable customer insights they need from their data. It lets retailers unify data for analysis while giving users easy access to transaction-level data whenever they need it. In case you missed it, I’ve collaborated with Steve Ibach, VP of Industry Solutions at Incorta who goes into unification for retailers in greater detail in his recent blog post.

Most importantly, answer virtually any question like:

• How are factors beyond our control—e.g., the pandemic, the economy, weather conditions, job losses, gas prices—impacting and affecting customers’ shopping behavior?

• What is the most appropriate, custom messaging to send to New York customers during a lockdown, for example, versus what would be most appropriate to send to Minnesota customers at the same time?

• How can we more strategically plan assortment or inventory by adding key external data—like COVID-19 data from the CDC—to our analyses?

• How can we give our top customers (who drive a significant portion of our overall sales) a unique experience, unique offers, and unique messaging, and make them feel like an important and valued part of our organization despite any external factors influencing them or affecting us?

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SUMMARYWith unified data, retailers are empowered to take a more thoughtful approach to how they market and what they offer to their customers. It’s a customer-focused approach—not a channel-focused one like omni-channel.

It’s informed, it’s powerful, and here to stay.

Register today at incorta.com/weeklydemo

A B O U T I N C O R TAIncorta is the data analytics company on a mission to help data-driven enterprises be more agile and competitive by resolving their most complex data analytics challenges. Incorta’s Direct Data Platform gives enterprises the means to acquire, enrich, analyze and act on their business data with unmatched speed, simplicity and insight. Backed by GV (formerly Google Ventures), Kleiner Perkins, M12 (formerly Microsoft Ventures), Telstra Ventures, and Sorenson Capital, Incorta powers analytics for some of the most valuable brands and organizations in the world. For today’s most complex data and analytics challenges, Incorta partners with Fortune 5 to Global 2000 customers such as Broadcom, Vitamix, Equinix, and Credit Suisse. For more information, visit https://www.incorta.com

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