“Without data, companies are blind and deaf, wandering out onto the web like deer on a freeway.” Geoffery Moore
Data is fast becoming one of the most popular words in business speak…...all industries from banking and manufacturing to hospitality to retailing are extolling the benefits of data. If we remember that the definition of data is the collation and presentation of facts in a useful format - it sounds fundamental to successful business planning to me! The problem with any catch all term is that it becomes an overused buzzword - this has happened to ‘data’ which is now used to describe a huge spectrum of business information - from the useful to the downright misleading. In most sectors, and in particular retail, the devil is in the detail and its important to remember that not all data is made equal!
So is ‘data’ simply the latest retail buzzword or is it the saviour for our struggling sector? And if it is, how can we ensure that the data we rely on is truly useful?
On a recent trip to the US it was mentioned to me that Nordstrom now considers itself a data company - not a retail company. For a company that sells over $4.5 billion in retail product every year this is some jump but clearly shows the value of data to a business. Checking the Nordstrom jobs site this week the focus on data was confirmed with 15 current vacancies in the data/insights team across the US. Against a backdrop of retail doom and gloom, the company posted better than expected Christmas trading figures and a profit for the year in excess of $150m so they must be doing something right and it got me thinking…...
With the retail industry currently battling many problems, from the widely reported economic, fiscal and political to technological shifts and the evolution of consumer shopping habits, retailers big and small are searching for that ‘magic bullet’ answer.
I firmly believe that data is the answer or put another way it will lead us to the answers!
A bold statement maybe, but in these unprecedented times when the industry is going through its biggest evolution this century, the only thing we can truly rely on to make informed decisions are the cold hard facts = real-time data. What we knew before, our tried and tested methods and experience to date, are all no longer relevant as consumer expectations and behaviours are changing so rapidly.
Rather than guessing at solutions when the whole industry landscape is moving rapidly, we need to rely on what we know for sure and the only ‘facts’ we know for sure come in the form of real-time data. We at Mallzee know we are in the privileged position of having oversight of what our 1.5 million Mallzee app users think of products across the entire retail market and this data allows us to stay ahead of the curve and identify consumer behavioural and preference shifts very quickly.
On the other side of this there are many retailers who claim that data can only give us a view of now and that consumers don’t really know what they want until it’s been put in front of them? This is the strategy that the likes of Gap and J Crew have stuck to whilst retail competitors such as Zara and Inditex have eaten away at their market share by adopting a data driven approach.
For many companies the idea of being ‘data’ led in such a creative space is terrifying and a paint by the numbers approach to retail would likely be a disaster for most companies.
Someone recently described the problems faced by a large retail group as being due to a group of ex Mckinsey guys thinking that creativity doesn’t matter in the retail process anymore.
So who is right? The companies growing through betting on data or the wily old foxes who are still sticking with their retail gut?
The share prices and performances of these two groups make it very clear that the data and customer led approach is most effective in modern day retail but it’s not as clear cut as most think.
The real successes in the retail ecosystem today are the companies that understand and respect data and harness it to enhance their more traditional approach.
Data in collaboration with a solid retail eye, per se.