Not too long ago, retailers felt confident their businesses could continue to prosper with familiar and steady changes to their business models, without having to closely track both internal and external retail data. And they were right. By making simple adjustments to factors like assortment offerings, inventory levels, marketing messaging, promotional offers, or pricing, retailers could overcome most of the typical challenges they encountered.
No longer will tiny steps and simple strategy shifts work to combat the challenges rising up against retailers today. To effectively compete—and to survive—businesses that still exclusively or primarily sell products via brick-and-mortar stores must be able to immediately and nimbly pivot more sales online—and quickly identify areas and opportunities for improvement as they go.
Luckily, today’s retailers don’t need to completely shift away from physical storefronts in order to sell online. Many more variations—shades of gray, if you will—exist today than ever before.
For instance, retailers with an existing online presence might choose to:
- shift more business online, so online becomes a larger sales channel for them
- offer additional options to appease temporary or permanent consumer desires—like what we’re seeing with the new “buy online, pick up at curbside (BOPAC)” quickly becoming a customer favorite
- grow existing options like “buy online, pick up in store (BOPIS)
Keep in mind, pivoting more to online isn’t purely a go-to-market shift for retailers, it’s also a pivot in how they understand and apply data to the business decisions they make.
Retailers primarily use internal data in their analyses because they want to understand what is happening in their business. But this simple, internal-only approach to analysis may not be enough to glean insights into why customers behave a certain way or why results differ from one market to another.
Now, most retailers need to analyze both internal and external data, and look at that richer data through many more lenses. They need to more intimately understand the behavior of their consumers—and the impact of that behavior on the purchasing decisions made by them—at a much deeper level. Even more importantly, they need to understand not only what trends are happening across the country, but why those trends are happening—they need to understand the factors igniting or influencing a trend.
By applying—in parallel—internal and external data, retail businesses can gain these kinds of insights and make recommendations for business improvement faster than ever before.
They can pivot yet again.
For example, by analyzing select external data, a retailer might decide to modify its inventory based upon how the weather conditions, price of gas, or a rising unemployment rate affect consumers’ purchasing decisions in a specific region.
Another recent example, by adding publicly available COVID-19 infection rate data from Johns Hopkins University to their analyses, retailers can better understand why customer behavior in a particular region has changed due to the virus. As a result, the retailer might:
- add new assortment in specific regions to meet a temporary need related to the virus (such as selling hand sanitizer or face coverings during the pandemic when the retailer doesn’t stock it during the normal course of business);
- stock more inventory in certain regions for categories or attributes (such as at-home fitness and outdoor products) trending there during the pandemic;
- offer customers in some regions more aggressive pricing to keep sales and inventory moving;
- communicate with customers on a market-by-market basis to deliver important, relevant information about inventory levels, special pricing, or new buying options in their area;
- track and understand on a location-by-location basis the contributions of new types of shopping like BOPAC; or
- customize messaging by market—or even by account—to specifically acknowledge and better support the particular situations faced by its customers.
When retailers pivot like this, it suddenly becomes clear how to use unified internal and external data to nimbly shift their business to appease fast-changing consumer preferences.
That’s why pivoting in this kind of way is really powerful.
But it wasn’t easily attainable by retailers until just recently, with the emergence of unified data and analytics platforms (UDAPs).
That’s why I’m so excited about what Incorta brings to the retail industry.
With the Incorta UDAP, retailers can pivot much more quickly and easily increase their sales and margins, and foster more intelligent supply chains.
With Incorta, retailers can better navigate the unfamiliar, troubled waters in which we all find ourselves.
They can pivot.
Read more about what Incorta can do for retailers in our “Reimagined Retail Starts with Retail Analytics” blog series.