Having a sound data strategy is now critical for driving a successful digital transformation. Retailers understand the importance of having access to the right information at the right time to enable proactive and customer centric decision making.
Having data is one thing but optimising it to digitally transform your business is another. The fact is that retailers can do so much more when it comes to making their data truly work for them. However, for most retailers across the region, their data is simply not working hard enough for them.
Having the ability to consolidate all the data across the retail value chain into a common data model that functions as a system of insight is key. This enables better understanding of the customer journey, consumer behaviours and market trends, giving retailers the ability to personalise experiences.
The bottom line is that digitally transforming your business model and building data driven innovation platforms is no longer an option, it’s a race for survival. Having access to the right information and insights can not only help retailers manage costs, reduce risk, and drive growth but also re-engage with customers to form a stronger connection in this new normal.
Rise of e-commerce
Between March and August, more than 8.1 million households in Australia shopped online — an increase of 16 per cent over the same period last year. The majority of the shoppers have been forced to break their normal routines and are now trying out new products and services, adapting to the new normal.
The rise of e-commerce brings various challenges, such as anticipating changing consumer behaviour, market trends, making timely decisions on inventory, optimising fulfillment options across multiple store formats and providing unique shopper experiences.
By leveraging data driven insights, retailers can optimise their assortments, improve shelf execution, reduce out of stock, provide their customers more visibility to in store inventory which in turn leads to increased conversions at the point of sale. Having this customer-centric view and a continuous focus on driving omnichannel execution goes a long way in improving the overall retail experience and driving customer engagement.
Retailers who invested ahead of the curve building their digital infrastructure centered around strong data foundations have been able to adapt quickly and accelerate further in today’s dynamic environment. For example, during lockdowns, many IKEA stores catered to customers online only, leading to increased levels of growth in e-commerce and an acceleration of its digital transformation. Things that would normally take years or months were accomplished within weeks and days. IKEA transformed its current technology infrastructure, converted its closed stores into fulfilment centers and enabled contactless Click & Collect services whilst increasing the capacity to manage large web traffic volumes and online orders. By using Google Cloud, among other key serverless technologies, it was able to instantly scale its business globally, online and in its brick and mortar stores.
Not just surviving
Retailers know that they have to do two things to not just survive but thrive after the pandemic. First, to make more clear-eyed decisions based on data. Second, to reimagine customer interactions at a time when people are buying online more than ever.
But where do they start? Large retailers with complex business models have to connect multiple silos and optimise the data across different platforms by creating common retail data models to drive efficiencies. On the other hand, smaller organisations may require ready-made platforms and pre-packaged solutions, which are scalable with built-in capabilities for faster reporting and analysis.
However, to get there, retail leaders must define their data strategy and long term innovation agenda from the outset. They will need to make choices around technologies which are easy to set up and flexible, such as multi cloud with strong AI/ML capabilities. Prioritising the business use cases and problem areas which can deliver the biggest business value will be critical as retailers undergo this data transformation to build their innovation platforms.
It is crucial for retailers to leverage technology, unlock their data, and transform their decision making. Having real time visibility and insights across their retail value chain is essential to becoming more customer-centric and thriving in this post pandemic world. The key is not to leave the data unused or underused, and to prioritise data-driven decision making in order to stay ahead of the curve.
Sameer Dhingra is director for retail and consumer at Google Cloud Japan and Asia Pacific