It’s A Time of Reckoning For The Retail Industry, And The Solution Is In The Data
The great retail shift from brick-and-mortar to online shopping has brought with it an overwhelming amount of new concepts, strategies, competitors and angst. But as brands have attempted to adapt to this new reality, many have lost their way, still trying to use tools and techniques that are outdated, inefficient and ineffective. The stakes have never been higher, and brands need to act fast — especially as even popular retail brands such as Barney’s, Gymboree and Forever 21, end in bankruptcy.
As the industry becomes more cutthroat, retailers need to take charge of their destiny and make better use of the data and resources now available to them. These resources aren’t just nice-to-have, but must-have for survival. However, it’s not enough to simply pay lip service to data-informed decision making. Retailers need an effective data strategy that helps them better predict — and meet — customer needs by staying on top of a sea of new communications channels, from Instagram to Pinterest to the myriad of online shopping portals and competitors located around the world.
By making use of the wealth of data surrounding these channels, brands can get ahead of the game, look forward and pick up on trends that other retailers miss to inform buying decisions.
What Used To Work Simply Doesn’t Anymore
The most common form of retail data malpractice is to focus entirely on past performance when making buying decisions — a practice that dominates the industry today.
While there is something to be learned from past successes and failures, this tunnel vision only scratches the surface of what data can tell us. In some cases, backward-looking analysis can even lead to false positives or overanalysis — sometimes known as analysis paralysis — causing forward motion to be paralyzed, as small sample sizes and lack of insight lead to strategic dead ends. Retailers have gotten away with this type of approach for a long time, but today’s reality demands more proactivity.
The great retail shift toward online shopping has most notably impacted the speed and scope of consumer shopping habits. With shoppers glued to social media outlets, trends develop, evolve and spread faster than ever before. Just a few years ago, shoppers maintained loyalty to their favorite brands, and retailers could predict and prepare for what was to come in the next season with relative ease.
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