The recent COVID-19 crisis has forced retail players to reinvent themselves and accelerate their digital transformation. To gain competitive advantage, the retail industry must rely on Big Data. Personalized experiences, optimized pricing, supply-chain connectivity; discover how data has transformed the retail & e-commerce sector.
Figures from the FEVAD (Federation of e-commerce and distance selling) indicate that the e-commerce sector has exceeded 129 billion euros in 2021, up 15.1% since 2020. The increasing success of online vendors has attracted more and more historical retailers to launch their e-commerce adventure. The consequence? The line between e-retail and retail is becoming increasingly tenuous. According to the LSA/HiPay 2021 study, 63% of French shoppers say they have used click & collect at least once, 44% have had a product delivered to their home, and 37% have returned a product purchased online.
In this very competitive context, the use of Big Data, driven by Artificial Intelligence and Machine Learning, has many advantages for this industry.
Benefit #1: A 360° view of customers
Faced with an increasing amount of digital and omnichannel consumers, retail players are able to have a 360° view on their customers through data. Indeed, data plays a huge role in building a relationship between customers and the retailer by providing point-of-sale experts with in-depth knowledge about a customer or a product. With better understanding of the customer, their habits and expectations, as well as the products that were sold, salespeople can have richer and more satisfying jobs. An advantage that can be seen as a response to the talent shortage affecting the industry.
But that’s not all! By using purchase records from a large portfolio of customers, retailers can use predictive analysis to adapt their offers in real time. For example, companies can define specific personas or offer personalized discounts.
Benefit #2: Optimize pricing
The analysis of supply and demand is a must for any business. In a hyper-competitive context, with tense consumer purchasing power, selling at the right price is an absolute necessity. One of the main guarantees of the use of data to optimize pricing is to preserve the attractiveness of the brand while protecting its margins.
This is even more critical for multi-site brands, spread over a vast territory. They must not only adapt their pricing based on customer expectations and behavior, but also to the competition in a given area – two major strategic levers for the retail industry.
Benefit #3: Innovate to improve products & services
Under the effect of digitalization, consumer habits are evolving at a very fast pace. Brands must therefore constantly innovate. But innovating can be a risky and expensive process.
With data, retail players can rely on the knowledge they have on their customers’ preferences and expectations to define the roadmap for innovating their products and services. The challenge? Winning the race to constantly conquer new markets, while keeping the R&D budgets under control.
Benefit #4: Offer personalized shopping experiences
Since the beginning of the COVID-19 crisis, the explosion of online shopping has attracted a population that used to shop in physical stores. To differentiate themselves, retail players must do everything they can to offer personalized shopping experiences.
Data is the basis of all personalization, especially for retailers who have embarked on the path of e-commerce. The ambition? To exploit the knowledge of on and off-line customers to harmonize experiences. Optimized and controlled data allows retailers to take advantage of the benefits of digital platforms while reinforcing the quality of in-store contact.
Benefit #5: Fluidify the supply-chain
One of the reasons why customers will visit a physical store rather than purchase a product online is to make physical contact with the said-product. In fashion for example, trying on a piece of clothing almost always makes the difference. In addition, having the possibility of leaving with one’s purchase without shipping delays is one of the most important factors for purchasing in a physical store.
Optimized inventory management, fluidity of supplies, control of logistics costs… It is crucial to ensure the excellence of data in order to guarantee the availability of products at the point of sale.