Why Data Analytics Are Crucial for Building a Smart Retail Strategy
Trying to implement a customer-centric retail strategy without the right data and analytics is a lot like trying to make your way through a pitch-black tunnel without a flashlight. When you’re stuck feeling your way around in the dark, it’s hard to make the right decisions about how to move forward.
Why waste the valuable resources of time, energy, and money by continuing to operate in the dark?
Leading retailers collect valuable insights, analyze critical data, and facilitate more informed customer-centric business decisions by developing an insights-driven strategy, supported by the implementation of real-time analytics solutions.
Benefits of Developing an Insights-Driven Strategy
Developing an insights-driven strategy provides culture-changing benefits and generates a substantial return on investment for retailers.
Enterprise-wide, culture-changing benefits. The right strategy can have a sweeping impact on a retail organization. Information breeds openness, honesty, and transparency, which affects company culture and improves employee morale.
- Access to transparency
- One version of “The Truth”
- Supports strategic planning
- Facilitates informed and actionable decisions
- Drives more predictable outcomes
- Empowers employees with meaningful insights
- Provides greater enterprise control
ROI generating financial benefits. Of course, retailers want to be confident that the bottom line is increasing as a result of all this data collection and analysis. Opportunities for financial improvements include:
- Drives influence across the customer journey
- Delivers customized consumer experiences
- Builds audiences for targeted communications
- Improves sales opportunities
- Optimizes pricing and expands gross margins
- Improves inventory utilization
- Optimizes store assortments and shelf space
How to Develop an Insights-Driven Strategy
For retailers looking to implement an insights-driven strategy, Sophelle recommends a three-step approach involving these elements:
1. Customer Journey
Data and analytics are critical at the beginning of the customer journey because they help retailers understand who the customer is and their intention at the top of the sales and marketing funnel.
Retailers can capture this essential information with the use of a Customer Data Platform and a Data Management Platform as part of a Martech stack to support their marketing technology strategy:
- Customer Data Platform (CDP): Captures and manages critical customer data from online and offline sources to access valuable audience demographic segments with historical and behavioral data. The purpose of a CDP is to drive long-term retention tactics.
- Data Management Platform (DMP): Captures and manages anonymous data to find more prospects, develop personalized advertising campaigns, retarget a retailer’s most valuable customers, and drive traffic to stores and websites.
The problem is that many retailers underutilize these functions—especially the CDP. More often than not, they outsource CDP and DMP functions to third parties with the directive to maximize traffic on their website.
But retailers don’t understand who makes up that traffic. And without a Martech stack to provide that visibility, they can’t develop meaningful relationships with customers and deliver the personalized content those customers desire.
Another critical component of the marketing technology strategy is an automated Customer Relationship Management solution which is used to manage customer engagement and long-term relationships :
- Customer Relationship Management (CRM): Engage with valuable customers, track user-generated content, and manage interactions with prospects and customers, manage loyalty programs, and build communities with proper social media.
Sophelle harnesses the power of data to clearly identify audiences, drive more significant influence across the customer journey, and deliver customized experiences.
2. Brand Touchpoints
The next step in the implementation process involves using data from the customer journey to grow relationships and deliver trusted touchpoint connections across coordinated channels.
Armed with the critical data gathered from the CDP and DMP, Sophelle helps retailers effectively reach customers in stores and everywhere on the internet: email inboxes, social media platforms, eCommerce websites, and more.
We aim to provide a unified, logged-in experience that recognizes customers and serves them compelling personalized experiences at each touchpoint.
3. Analytics Solutions
At this point in the process, we’re ready to implement real-time analytics solutions and provide transformative benefits across the entire enterprise, including sales, marketing, merchandising, channel operations, finance, and the supply chain:
- Digital marketing technology. Based upon consumer and sales data, we help retailers analyze critical metric-based statistics in order to drive customer lifecycle management and marketing mix modeling.
- Omnichannel sales and operations. We help retailers maximize in-store and online sales opportunities while optimizing operational costs based upon real-time metric-driven performance dashboards.
- Omnichannel merchandising. We help retailers analyze targeted data to help make informed decisions about pricing, promotions, and assortment management based upon transaction and loyalty data.
- Omnichannel fulfillment: We help retailers identify areas of opportunity in order management, inventory management, and fulfillment, including in-store availability, logistics, and warehousing.
We’ll explore each of these analytics solutions in future articles, so stay tuned and make sure you’re subscribed to our newsletter.
To learn more about using data and analytics to build your retail strategy, contact us today.