When I started in retailing during the late 1970s, sales and SKUs were listed on enormous spreadsheets;. Buyers flew around the country and world finding the optimal products to fill the store’s shelves.
Fast forward just three short decades later and computers, software and Big Data have taken over much of the “on the road” forecasting efforts. Manufacturers, wholesalers and retailers are talking about and dealing with the issue of Big Data, and the effective use of Analytics. Some companies are dealing with Big Data and Analytics more effectively than others.
Having worked with the Prosper Foundation, I have had access to large amounts of data for over four years. I’ve closely monitored the trends in consumer behaviors and attitudes and I’ve learned valuable lessons in relation to the changing retail world.
Change #1 - Predictions are becoming more difficult to make: Predicting consumers’ actions is becoming increasing more difficult. The adoption of technology is a two-edge sword. On the one hand retailers have more access to consumers (e.g., online coupons, mobile devices). On the other hand, technology enables consumers to made snap purchase decisions and switch brand and/or company loyalty. Technology can blur consumers’ intentions. For example, the addition of a mobile device may change a consumer group into a frequent purchaser of a different retailer due to convenience. The loss of the consumer is not due to anything the original retailer did, it simply is because the original retailer is not available via a mobile device. Without looking at longitudinal data and a large market share, predicting the number of consumers your company will lose or gain will be difficult.
Change #2 - Consumers are unforgiving: There is a saying “happy consumers will tell one person; unhappy consumers will tell 10 persons.” Social media is changing this statement. Facebook, twitter and YouTube reaches hundreds if not thousands of our “closest” friends. A consumer’s description of a negative encounter with a company can go viral overnight. If the description is humorous, it may even end up on a late night talk show. United Airlines learned this lesson all too well when the company broke a passenger’s guitar. The YouTube video generated 12,788,590 views. While viewers of the video are laughing, United probably doesn’t find anything funny about the video.
Change # 3 - Trends are changing faster: Trends are changing at an increasingly faster pace. This can be attributed to changing technology (e.g., updated cell phones), improved methods of communication (e.g., social media) and BIG Data. SKUs, loyalty cards, security cameras, email addresses, purchases and returns provide companies with valuable information regarding changing trends.
Change #4 – Advertisers are wasting money if consumers do not purchase the product: Companies spend millions of dollars annually to promote its products. Advertisements and promotions may make the consumers laugh, cry or sigh – tugging on the sentimental heart strings. While all of this may be nice, advertisements and promotions fail if the consumer does not purchase the product. The analysis of data are required to understand (a) why consumers purchase a particular, (b) how consumers purchase the product, (c) the demographics and psychographics of the purchaser of the product and (d) the ultimate user of the product.
Change #5 – Streamlining data is critical: Companies are becoming increasingly dependent on internal and external data to make wise financial decisions, refine logistics and operations and improve sales and marketing initiatives.
This growing reliance on data-driven decision-making creates challenges for some of the market research providers. For expediency purposes, readily consumable insights are required. Some market research firms use data that are already sorted, tabulated and analyzed. This static reporting method may provide fast results but the findings may not be insightful or critical to the retailer.
In summary, technology and BIG data are changing the retail world. Together they help bring insightful and analytics to the boardroom, buying office and consumer’s home. If your company is not currently maximizing the power of its data, find a service provider that will:
- Streamline data and data gathered for you by market researchers
- Help you manage, tabulate, analyze, visualize and deliver data in interactive, web-based and mobile formats
- Provide insight into your target market
- Offer solutions to pressing business problems.
The effective use of technology and BIG Data can give you the competitive advantage you need in today’s competitive and rapidly shifting environment.
