Data analytics: Three main challenges faced by retailers in going digital
AS the retail industry indicates a shifting pattern towards e-commerce, many businesses in the sector have struggled to keep up with emerging marketing trends, especially with regards to using data analytics to drive growth.
Last week, the August 2017 Commercial Outlook Report from accountancy and consultancy firm SV Partners predicted some 1,600 retailers in Australia faced the threat of imminent collapse amid a difficult year for the industry and the impending arrival of Amazon to the country’s shores in 2018.
In the past, such predictions have prompted retailers hopping on the e-commerce bandwagon to rethink their marketing strategies to mimic the success of Amazon’s recommendation engine.
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And while investing in a pricey analytics engines is, by no means, a guarantee of success, Aleetza Senn, CEO and co-founder of data analytics consultancy firm Sparkline spoke to Enterprise Innovation on a number of misconceptions retailers have about data analytics and the main challenges they faced.
Lack of training and education
Many retailers who Senn met over the course of her consultancy say they might not have the right people to use the technology to make decisions off it within marketing teams.
As marketing is not traditionally a technology function, Senn said many leaders of the businesses were concerned over the talent gap in their organizations. She said this has made companies, like hers, to create different training programs that teach technology in “scalable ways” or provide them with the knowledge to look at data and analyze the information.
Brick and mortar connection
Rent has become very expensive due as most investments tend to go to the store front. And part of the reason why retailers can’t drive up sales was due to showrooming activities – involving customers getting a feel of the physical product at the stores but have a bigger tendency to buy elsewhere.
“Given that international delivery now is becoming more and more popular – competition has gone global. Really that’s a key issue and a key problem as to how to tie what is a traditional brick and mortar experience to a digital experience,” she told Enterprise Innovation.
New ideas and approaches
Senn said retailers must be willing to experiment with new ideas and take a “fail fast” approach to determine the appetite of customers.
“Make incremental budgets to test new ideas, and be ready and willing to fail fast, and move on from there.”
On her top advice to organizations trying to better understand what big data can do for their businesses, Senn said the challenge lies within the pace of change.
“My biggest piece of advice is not to try and really reinvent the wheel over and over again because it’s very expensive, it’s very disruptive and you don’t quite know if it’s going to work,” she said
Senn said her consultancy tries to work on a lot around what incremental changes businesses make with the infrastructure they currently have.
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This, she said, involved adopting a lot of the challenges within the businesses and being able to prove the value of using the information to help increase profitability.
The consultant also advises the businesses facing the challenges to focus on what kind of work you can be doing with the data that they have: “Is it accurate and useful? Do you have the right technology to be able to do what you’re trying to do long term and shorter term?” she asks.
She said companies should work on making those quick wins as overhaul that grows a business incrementally, instead of undertaking costly big transformation projects that take a long time to implement.