As changing shopper behaviour and aggressive new entrants continue to shake up the local retail industry, record numbers of Australian and international retailers have been forced to close their stores and file for bankruptcy since 2014. This trend is set to accelerate over the next five years – so using data in the right way to future-proof has never been more important.

Australian retailers are currently collapsing at the rate of about one per month, as reflected in the ill fates and dubious futures of many local brands. Menswear retailer Roger David entered voluntary administration in October 2018; cosmetics brand Avon exited Australia at the end of 2018 and outdoor adventure gear company Mountain Designs closed one in three stores across the country in 2018. Even the major upmarket department stores are struggling, with Myer currently trading at a fraction of its float price and David Jones now owned by South Africa’s Woolworths.

Perhaps most concerning is the rapid pace at which these declines are occurring. Just look at what five years meant to Sears – the United States’ ‘Original Everything Store’. Once the largest and most successful retailer in the world, Sears filed for bankruptcy in October 2018. Over a period of only five years, it lost close to $6 billion and closed more than 1,000 stores, accompanied by a drop in sales of more than 60%. According to YouGov BrandIndex, the number of consumers open to shopping at the department store dropped from 28% in 2013 to 14% in 2018.

125-year-old Sears was once considered a retail innovator that pioneered the strategy of selling everything to everyone. But it fell far behind big-box rivals like Walmart, Home Depot and e-commerce giant Amazon – all thanks to its failure to utilise the valuable data at its fingertips to develop a strategy for winning back consumers who had changing expectations and needs.

Two significant factors drove local and global retailers like these to diminish, and today remain key risks to the Australian retail sector’s transformation. The first is the inability to truly place the customer at the heart of every single business operation, end-to-end; the second is the absence of a change management and engagement program to avoid internal resistance.

Here are some key tips to ensure your retail business will not just survive, but thrive ahead of 2024.

Become truly customer-centric

As simple and obvious as it sounds, dunnhumby’s Global Customer Centricity Index (CCI) report shows that improving your customer centricity score leads to sales growth and that getting the basics right is vital –­ and harder to do than perhaps expected. In fact, we have also found that while most retailers state an intention to be customer-centric/driven, less than half manage to turn this ambition into action. Of the 20% who are successful in this quest, fewer than 1% are able to get their data strategy right and completely renew their organisation end-to-end.

Transformation that is based on a deep understanding of customers at every level is the true realm of sustainable competitive advantage and growth, as we can see among businesses like Australian luxury skincare brand, Aesop. Starting as just one store in Melbourne in 1987, Aesop is now a global brand with outlets in New York, London, Paris, Tokyo and Hong Kong. From the moment he joined the brand in 2003, chief executive Michael O’Keeffe has focused almost solely on Aesop’s relevancy and connection to its customers. With his sights now set on reaching $1 billion in sales by 2025, O’Keeffe says Aesop’s next move is “an engagement-centric model, where you can connect to a customer at every touch point.”

By constantly revisiting what your customers are telling you, as brands like Aesop continue to do, you can be sure you are driving the right decisions and strategies that will help maintain a competitive advantage.

Drive change management and engagement from the top

People intrinsically don’t like change. Many already feel overwhelmed by the magnitude of data that is now available, and are all too conscious of the gap that exists between what their organisation can currently do with it and what is expected at the board level.

The successful 1% of retailers have one key thing in common: an appreciation for just how critical a robust, ongoing change management and engagement program for employees is as part of an overall customer-driven transformation. This was prioritised by all top customer-centric retailers surveyed – each of them implementing their customer data strategy in tight unison with their own complete and tailored program.

Invest in the right technology

Aussie businesses are charging ahead and making all the right investments for a superior digital future, with local brands expected to spend $4.9 billion on improved technology, products and services in 2019. Importantly, before investing this significant amount of money, businesses should ensure that they are spending on the right technology. Again, by looking at the data, they can ensure that the money is being spent wisely and will bring efficiencies to the business whilst providing the best experience for customer

Using the data is really about eliminating risk. And embracing change through every level of a business and living the values of a customer first business will help ensure your business does not risk the same five-year-fate of many once successful businesses that have simply ceased to exist.

Regardless of the increase in technology, modern software and multi-channel offerings, the most important action to future-proof yourself as a retailer is to harness the wealth of your data assets to better understand your customers, and ensure you are delivering on what matters most.

Kylie Gleeson-Long is Managing Director ANZ of dunnhumby.