Retailers must see advanced analytics as a transformational opportunity, and they need an integrated approach that emphasizes organizational aspects.
FREMONT, CA: Today’s retailers function in an environment of relentless competitive and financial pressure, in which they must handle multiple formats, ever-changing consumer preferences, and massive volumes of data. To succeed, they must invest in advanced data and analytics to change their merchandising. Making analytics work effectively means retailers must take an integrated approach to strategy, organization, and technology levers. Read on to know more.
Many retailers could win with a clear value proposition, as long as merchandising articulated a fair pricing strategy, understood its promotion effectiveness and had a process in place to review its assortment. Customers now need retailers to make things seamless for them, with localized assortments, personalized offers, a better shopping experience, new product segments, and sustainable sourcing. To win, retailers require offering all of this, along with real-time price adjustments and integration with third-party online marketplaces.
Many merchandisers are less armed to manage this complexity. Some still depend primarily on manual processes. They reside data in multiple silos and run ad hoc processes resulting in disconnected, lagging reports, which means they cannot run tests or make data-driven assortment decisions. Besides, frequent turnover among category managers hinders institutional knowledge and short-circuits the opportunity for continuous enhancement. Most retailers recognize that they want to do better, and a number of them have already made investments in analytics.
The vital stumbling block is that retailers often lack an integrated method to advanced analytics. Ways of working, technology, and the underlying algorithms all come together to reinforce and give the company a differentiating benefit. Retailers try to apply advanced analytics as a plug-and-play remedy, instead of taking an integrated means, as the merchant team struggles to unearth value from the torrent of data now available to them. Out-of-the-box solutions force merchants to make several low-value changes to their processes, while customized options need too much difference and compromise too rapidly.