Retailers show a notable resiliency and adaptability through and beyond impacts stemming from COVID-19. Well before the pandemic, they adapted to evolving consumer preferences with increased online delivery infrastructure and omni-channel experiences, including social marketing and engagement. Demand for online and mobile shopping then sharply increased during the pandemic in the face of lockdowns, restrained activity, labor shortages, and supply-chain breakdowns. Although customers appear to be returning to brick-and-mortar establishments, labor issues persist. Retailers additionally face significant external forces of inflation, slowing economies, geopolitical instability, and, in many countries, higher capital real-estate costs due to increasing interest rates.
Given the strategic and operational complexity of retail and its relatively low profit margins compared to other sectors, effective use of business intelligence (BI) and analytics can help mitigate impacts from external forces and provide a source of competitive advantage. In addition to general business functions such as human resources and finance, retailers must manage and optimize decisions across a complex array of systems, including market positioning, customer experience, supply chains, products and placement, warehouse/inventory, and sales. Yet the demand for BI and analytics remains unexpectedly low for many retailers, with retailers generally investing in technologies to improve operations and reduce costs, rather than to make better strategic decisions.
Retailers should continue to invest in building trust and buy-in for BI and analytics through foundational advancements in data culture, data quality, and data governance. Well-supported, formal data-leadership positions are key to effectively implementing these improvements. Thankfully, many retailers already collect data at enough points along the value chain for a data leader to work with. Retailers then need to make two simultaneous and coordinated sets of investments to operate hyper-decisively—improved data management and comprehensive analytics capabilities—to achieve effective Digital Grade Intelligence.™
But to harness the full benefit of BI and analytics, retailers need to continue shifting their focus from merely tactical cost cutting to data-informed strategic insights that can grow revenue (perennially, the top challenge for almost every retailer), and better understand and effectively engage customers.You do not have permission to access this document. Make sure you are logged in and/or please contact Danielle with further questions.