Retailers must utilise data better or risk losing younger shoppers
As the cost of running retail businesses continues to increase merchants must utilise their data more effectively if they are to compete successfully against their rivals in the future.By Glynn Davis in Monaco
Speaking at the IBM Smarter Commerce Global Summit 2013 in Monaco this week, Sir Terry Leahy, former chief executive of Tesco and an investor in various retail businesses, told delegates that whereas data gets cheaper the cost of energy, labour, land and regulation continues to increase.
“Data costs are going down, which helps the P&L, and enables retailers to understand their customers better, create loyalty and increase spend – more profitable spend. The key is how retailers use the data to engage with customers,” he explains.
Unfortunately many retailers are not utilising this growing “mountain” of data: “Companies are not making as much use of the data as they should.”
There is also a failure to use the data to engage with customers across channels. “Online and offline should become invisible. Customers are not bothered about how retailers contact them. They want them [the retailer] to be ubiquitous but under the customers’ control. This is where companies are falling down at the moment,” suggests Leahy.
In order that Tesco could act fully upon its data he says it had to develop a totally responsive supply chain. “It was re-designed and re-platformed. The bleep at the checkout goes back to the farmer and adjusts the global supply chain. The customer drives the supply chain,” he says.
Tesco has more recently brought social media into the mix as one of its many data sources it utilises to gain insight, which has been made possible through its purchase of BzzAgent. There is no denying that social media will play a bigger role, according to Jill Puleri, vice president and global retail leader at IBM’s Global Business Services division, who says this is the way to engage with the increasingly important Millennial generation.
For fashion retailers there is a recognition that this younger audience are using such platforms to communicate and that they need to be involved in this dialogue. “They are using technology differently and the smart retailers are saying ‘we’ve got to grab them now’,” says Puleri.
By understanding who the ‘influencers’ on social media are, and how they communicate, Puleri says retailers can engage with this audience who are shopping differently and whose buying power will only increase over time.
They have also been the biggest embracers of mobile and it is the usage of such devices, and the rich online experience they are giving shoppers, that she says is prompting retailers to take data more seriously and use it to improve the in-store experience for their customers.
