Practical data applications for retailers
Retail operations: Collecting, storing, and executing tasks with customer data.
In today’s world, collecting data and basing decisions on the calculated data is critical to success, especially in the retail market. In today's blog, we’ll be exploring the collection, storage, and use of retail data. Retailers depend directly on consumers for their business growth, which has placed shopper experience and customer satisfaction at the top of the priority list, making customer and market research very important. The introduction of big data in retail allows retailers to curate more relevant, valuable, and enjoyable experiences for their shoppers since customer data allows retail owners to understand what influences purchase decisions. It is also critical to formulating an effective business and marketing strategy.
Collecting data — Gimme Gimme Gimme:
So, we understand that data is going to play a big role in all aspects of retail going forward. But how does a retailer actually go about collecting data, and furthermore, data that’s actually useful? There’s no point in knowing the star sign of all your customers if you sell bagels. So not only is data collection important, but relevant data collection. How can a business actually go about collecting this data?
Point of Sale Data Collection — Retail customer data collected at the point of sale is not only a perfect solution to inventory management but has other great benefits too that just shouldn’t be missed. A POS system sheds light on metrics such as profit margins, customer counts, sales trends, and more to help you understand which products and suppliers are driving revenue. This, in turn, helps in making more reliable decisions.
Online Surveys — The perfect way to know what your audience thinks of your products and services is to ask them! Online surveys help you understand the perspectives of your customers and think like them. This helps your retailing teams make error-proof business decisions. Though customers usually tend to avoid taking surveys to share feedback, you can make your surveys and survey design interesting to pique their interest with an online survey tool. Online survey software not only helps you design intelligent and creative surveys but also allows you to create dynamic reports that can help you get a panoramic view and conduct meaningful analysis.
Social Media — Social media has become a reliable source of data. All you need to do is figure out what channels your audience engages the most on. Then, you can use polls and social media groups to know what your audience thinks about your product and services.
Market Research — Market research allows data collection using a market research platform to identify if your products are satisfying the needs of shoppers and customers. Market research helps you get actionable insights about customers, competitors, and the target market, providing you a potential edge over other businesses. It involves targeting the right audience, asking them the right questions, gathering valuable insights, and taking corrective measures.
Storing Data — Where the hell do I put it all?!
So now we’ve collected some data. Great! But what do we do with it now? Well, be for we can start looking for insights and use the data. We need to put all this data somewhere! And as I’m sure you’ve heard, data storage and protection are incredibly important not just for the customers' sake, but your own legal liability. Yes, I’m talking about the big scary GDPR. Our last blog talked about GDPR regarding collection and consent so I won’t go too into it, you can read the last blog here. But to sum up, your business can face hefty fines of up to €20m if you fall foul of GDPR requirements. So let's make sure our bagel shop avoids that!!
How to store customer information has two challenges: the legal requirements your business must meet, and the task of actually doing the nitty-gritty of storing all the data you’ve collected. Keeping customer information on post-it notes stuffed into a filing cabinet isn’t effective. Your business must be able to easily access customer information, update or delete it, and control who accesses it. This means using secure, password-protected tools that allow data to be used in a variety of ways.
There are lots of ways to store customer data from basic spreadsheets and databases to cloud-based customer relationship management (CRM) tools and proprietary software.
Office software — It’s perfectly possible to store data using office tools such as Microsoft Excel or Apple’s FileMaker database software. They include data tools, password protection and can export data in industry-standard file formats. However, as your business grows, office software may be too limiting compared to a dedicated CRM system. But for a small retailer, organizing and storing data in office software will do just fine!
CRM software — CRM tools are designed to make storing and organizing information safe and easy: all your data is in one place, providing a unified view of your customer. Many tools include features such as lead generation and conversion, email marketing integration, customer segmentation, customer demographic, and analysis such as customer spending patterns.
Dedicated software — CRM tools are a great way to have a central view of customer data, but your business may need special tools such as order and inventory software or finance and accounting software. Dedicated software such as finance applications store customer data and integrate with CRM applications to have more advanced systems operating together as one.
Implementing collected data — Actually using the data:
So, we collected our data, and we’ve got it stored safely in our centralized database. What now? Simply having data is useless, now we need to analyze it, and decide what is the most effective way to use it. Here are a few ways in which companies use data and the insights they can draw from it. The main two being Marketing and customer experience.
To improve the customer experience — For many companies, consumer data offers a way to better understand and meet their customers’ demands. By analyzing customer behavior, as well as vast troves of reviews and feedback, companies can nimbly modify their digital presence, goods, or services to better suit the current marketplace. Not only do companies use consumer data to improve consumer experiences as a whole, but they use data to make decisions on an individualized level. One of the most important sources of marketing intelligence comes from understanding customer data and using it to improve a business’s functionality. By analyzing a customer’s data a retailer can improve the customer experience by creating customized promotions and special offers based on that customer's data. Since each customer is going to have their own individual preferences, personalization is key, and data analytics can be used to achieve this personalization.
To refine a company’s marketing strategy — Contextualized data can help companies understand how consumers are engaging with and responding to their marketing campaigns and adjust accordingly. This highly predictive use case gives businesses an idea of what consumers want based on what they have already done. Like other aspects of consumer data analysis, marketing is becoming more about personalization. Segmenting data effectively allows you to market to only the people you know are most likely to engage. These have opened up new opportunities in industries previously very hard to market to. Using data to identify your market and how to effectively communicate your product to that market is the biggest use case for retail data.
So now we’ve looked at collecting, storing, and using data at the practical retail level, but let's tie it all together in a way that makes sense in the real world.
Let's pretend I run a bagel shop, and I want to start using data to improve my business model. I'll start with a data collection method, something simple. Instead of just printing receipts, I install a Point of Sale Collection System that records the time of transaction and what the order was. I then install a data storage system. I Install a server and run a database that stores and organizes this data securely according to GDPR. After two weeks I look at the data and notice a pattern in some of the orders. As expected, there is a Morning rush at 8–10 am, a lunch rush at 1–2 pm, and an evening rush at 6–7 pm. But at 4:10 pm every day there is a spike of 10/15 orders of our cheapest bagel on the menu. I realize that this must be the afterschool students. This is a market I didn’t even think about. They always go for the cheapest bagel, which turns out to be my highest-margin bagel. I add “student meal” and advertise in the window and online via Instagram and Facebook Ads that we have a student deal. This Targeted marketing campaign worked and there is an 80% increase in student customers and thus an increase in daily revenue by targeting a demographic that was previously untapped.
I like to think I could run a pretty successful bagel shop, and hopefully after this blog post you'll have a better idea of how data moves through a retailer and how it can be collected, stored, and used. Until next time!!!
Forbes — Making The Best Use Of Customer Data — Anthony Smith — 2018—[online] Available at: https://www.forbes.com/sites/anthonysmith/2018/12/20/making-the-best-use-of-customer-data/?sh=5b27c9723eea
Bloomreach — Your data’s a goldmine, here’s your pickaxe — Robert Heger — [online] Available at: https://exponea.com/blog/importance-of-customer-data-collection/
Pointlist — How to Use Customer Behavior Data to Drive Revenue — Gary DeAsi — [online] Available at :https://www.pointillist.com/blog/customer-behavior-data/
Business News Daily — How Businesses Are Collecting Data (And What They’re Doing With It) — Max Freedman — [online] Available at: https://www.businessnewsdaily.com/10625-businesses-collecting-data.html
IDG Insider — make the most out of your customer data- Jennifer Lonoff Schiff — [online] Available at: https://www.idginsiderpro.com/article/2935650/8-ways-to-make-the-most-out-of-your-customer-data.html
Vend — Retail Analytics: How to Use Data to Win More Sales -Francesca Nicasio — [online] Available at: https://www.vendhq.com/blog/how-retailers-can-use-data-to-boost-productivity-customer-service-sales/
British Business Bank — How to store customer information-[online] Available at: https://www.startuploans.co.uk/business-advice/how-to-store-customer-information/
Retail Next — How to Collect Customer Data — Bhavika Sharma — [online] Available at: https://retailnext.net/en/blog/how-to-collect-customer-data-and-improve-shopper-experience/
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