How retailers can use analytics to stay ahead of the competition
As consumers are bombarded with new innovations and technology, they are starting to find them ingrained in almost every part of day-to-day life, and shopping is no exception.
According to a survey by retailer Shop Direct, a staggering 95% of Brits now shop online and one in four people do so at least once a week, meaning that the ordinary retail outlet – with its baskets, cashiers and customer assistants – is becoming increasingly redundant. The technological progress that has been made over the last 10 years has paved the way for online e-tailers to threaten the business of traditional bricks-and-mortar retailers, meaning stores are now thinking outside of the box, and looking to technology, for help in winning back customers and generating footfall through their doors.
There is also a growing trend of ‘showrooming’, where people will visit a shop to browse the products available, test and try out what they want to purchase, only then to go home and buy these items online at a cheaper price.
This trend demonstrates that customers are looking for a holistic approach to their shopping. They want to be able to assess a product tangibly and get a feel for what it is like, while also benefitting from the convenience of ordering online, where they can compare prices on the item and have it delivered to their front door. Sportswear company, Lululemon Athletica, has embraced this showroom trend, demonstrating this through their European expansion, where 11 of their 16 European stores are showrooms.
Aside from showrooming, retailers are looking into different ways they can compete with online businesses. One good example is John Lewis’s investment in beacon technology. With online shopping accounting for one third of John Lewis’s trade, the retailer has taken it upon itself to merge the online and in-store shopping experience for customers. In November 2014, John Lewis decided to invest £100,000 in a company called Localz, a micro-location specialist and developer of a system which John Lewis believes will cut waiting times for collections. By using Bluetooth emitting beacons, the company hopes to manage collections more effectively by finding out when a customer is approaching the store and notifying staff of the items that need to be ready for collection. It’s pushing the boundaries of customer service and disrupting what we’ll come to expect in the future; those who don’t take note of these technological advancements risk being left behind.
Another excellent example is the Inspiration Store, a retail concept created by METRO GROUP, PayPal and eBay, which also created a multi-channel environment for its customers to experience. The state-of-the-art, bricks-and-mortar retail space was open for 3 months and used a combination of sensalytics and EXASOL’s analytic database technology in order to capitalise on data such as the movement of people within the store. In turn, this allowed shoppers to touch and experience different products in-store before they purchased them online using a computer or via their mobile.
As a completely new and innovative store concept, the partnership required precise, comprehensive data in order to test the viability of the project and assess the customer experience from the beginning to the end of a consumer’s visit.
By installing a high-performance analytic in-memory database, the data obtained from sensors around the store was exceptionally easy to analyse, and helped to evaluate the effectiveness of this new type of retail business, as well as its subsequent potential. Coupled together with transactional data, retail stores would have the ability to calculate purchase rates and assess which products sell well and which ones don’t.
The Inspiration Store clearly demonstrates how a multi-channel strategy can bring retailers into the 21st century and compete with their online counterparts. However, in this instance, it is not just the technology that enabled the store to do so well, but it is the data that was captured, too. Only by analysing the data and assessing customer behaviour can retailers truly maximise their success as a business. With customer habits changing all the time, it is imperative that retailers pay attention to this and react in real-time to these trends, or else risk losing business in the future.
So, by adapting and embracing technology, bricks-and-mortar retailers are remaining relevant to the current generation of shoppers and the collection of data, and its rapid analysis is fundamental in this process. It provides businesses with the opportunity to react to customers’ wants and needs in real-time, giving them the shopping experience that they desire and encouraging them to return on future visits. The boundary between online and offline commerce is more blurred than ever, and multichannel shopping experiences are going to be vital to the success of retailers in the future.
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