Retailers Need to Give Data the Reins
Taking a two-pronged approach to a data-driven strategy is crucial to retail success in today's competitive market. Decision making and measurement are your tools for growth.
Today’s retail businesses so often claim to be data-driven. The reality couldn’t be further from the truth. Many organizations mistake vanity metrics for data analytics. Tracking social media engagement and email marketing clicks is important, but that doesn’t make you a data-driven business. In order to be truly data-driven, you need to let the data take the reins.
When retailers make important strategic decisions, they have to consider so many factors. What are the market trends? In what areas are they currently lagging where sales are concerned? How accurately are they tracking inventory? There are dozens of factors that translate into strategic pivots for these organizations. However, when making decisions, retailers lack two things: the right information and the right measurement metrics.
The Right Information
A holistic data-driven strategy involves drawing upon all of your metrics. This includes global sales data, online marketing engagement, competitor success, mobile app engagement, in-store experience and more. Many retailers don’t even realize how much data can be gleaned from these sources. Taking all of these into account means that you hardly even have to make decisions anymore. The data will literally tell you what you need to do. The key to this is to enable data collection. An example of a way that retailers are doing this is by encouraging customers to use a mobile app to navigate the store and find deals. This allows businesses to learn about their customer behaviors while in-store, and online.
The Right Measurement Metrics
A data-driven strategy is adaptive. First, you need to be prepared to pivot at any time. The data will often reveal trends to you in real-time. This allows you to measure the impact of your decisions. If your strategy is not working, you will know right away, and you have to be ready to revert or modify your strategy at a moment’s notice. Many customers are fickle, and one bad experience can prevent them from ever returning to your brand.
The second way that measurement will impact your data-driven strategy is through the data analysis itself. To make a decision, you study the data and implement a strategy. That doesn’t always mean you’ve learned the right lessons from the data. What drove you to that decision? If your strategy doesn’t pan out, you need to know why you chose your course of action. That way, the next time you make an important strategic decision, you will be able to more effectively analyze the data you have access to.
This two-pronged approach to data-driven design is your key to success in the highly competitive retail market. Learning how to leverage the data you have available to you is pivotal to your organization’s strategy.