Report: Consumer data can guide retailers to actionable insights
SCOTTSDALE, Ariz. — Retailers can gain huge competitive advantages in an increasingly digital marketplace by leveraging consumer insights.
That's according to “The JDA Voice of the Category Manager.” The report, from JDA Software Group, tapped nearly 100 professionals responsible for category management and merchandising activity in North America.
Among this group, their top investment priority in the next five years is big data and predictive analytics (4%), followed by investments in customer-driven data science (37%). This is promising, as the study also revealed that most companies currently lack the ability to mine and leverage important customer data, therefore failing to meet evolving shopping demands.
Currently, companies have access to volumes of essential data about their customers’ shopping preferences and behaviors. Where companies fall short is in their ability to derive actionable insights from this mountain of consumer data. While respondents on average stated that they are “somewhat” successful in mining consumer data to generate usable insights (82%), less than one-fifth (17%) feel they are “highly” successful in their ability to leverage the data to derive actionable insights.
When asked to identify which processes they lacked the most proficiency in, nearly 70% of participants indicated that they are most behind on leveraging predictive analytics for improved pricing and merchandising — two capabilities that are of paramount importance for sustained success in today’s customer-centric world. Additionally, nearly 60% of respondents claimed that they are also behind in leveraging geographic and socio-economic data for targeted promotions and offers.
The modern shopper has transformed the ways retailers and manufacturers operate and maintain profitability, and shoppers expect merchandise assortments to meet their needs from the first attempt. That said, participants cited personalization and localization (68%) and increased development of digital technologies (62%) as the top two priorities they plan to implement within the next year to reach modern shoppers. Omnichannel retailing also remains a high priority. In fact, it is among the top two among nearly 60% of respondents.
Effective assortment localization is dependent on a company’s ability to identify the key product attributes that drive local preferences and demand in each category. Companies are best able to evaluate the success of their localization efforts by measuring an increase in sales (37%), increased visibility into stores (21%) and improved inventory levels (21%).
With increased focus on localized assortments, technology investments are top of mind for both manufacturers and retailers. The top two priorities driving the need for new technology solutions are automation as a means to do more with less, and consumer insights as a tool to support increased localization, dynamic pricing and improved merchandising.
“Retailers and manufacturers that want to stay on top will need to be able to implement personalized localization at scale and with speed,” said Todd McCourtie, senior director, solution strategy at JDA. “While this will require some organization-wide changes to policies and procedures, as well as the adoption of technology solutions to help automate processes, it is a necessary evolution for those responsible for merchandising decisions.”
When it comes to adopting mobile technologies to engage shoppers, respondents differ on what is most beneficial to their business:
• 26% indicated augmented reality technology that provides shoppers with personalized information while shopping;
• 25% deemed the ability for customers to leverage beacon technology (Internet of Things) via mobile device for increased self-education on products;
• 21% identified in-store mapping for easy self-navigation around stores; and
• 19% believe location-based mobile coupons would be most beneficial.