2017 has been one of the most difficult years for the retail industry. On the edge of bankruptcy, companies ask – What is going on and why is this happening?
Ruthless competition, the need to adapt to new technologies and a lack of investment in innovative solutions are causing retailers (and also other types of businesses) to collapse. This combination has led companies to deeper levels of recession.
According to Moody’s, the number of distressed US retailers has tripled since the Great Depression. In a general perspective, its report verifies that 13,5% of American retail and apparel groups are at risk of foreclosing and nearly 16% occurred during the Great Depression.
Big and small retailers such as Macy’s, Sears, Neiman Marcus, Crocs, or even Guess are some examples that are going through high levels of store closure. Sears is closing 10% of its stores and JCPenney is shutting down 14% of its business – the equivalent to 138 stores.
Stop. Inhale and exhale. We might be able to help you.
Retail business is highly fickle and too unpredictable. So, today, organizations that make data-driven decisions are at the top of their game than businesses whose decisions are driven by instinct.
Half of all U.S. households are now Amazon Prime subscribers – a single data-driven company that has realigned its organization’s culture to make sure that everyone knows the value of the data – and how to make the most of it.
Data has the power to outshine human intuition in a broad variety of scenarios, and for this reason, retailers benefit from a clearer customer understanding.
Being a data-driven retail business means measuring everything there is to measure. However, to improve performance retailers need to make sure the insights gained from data are used to decision making and, ultimately, that are more crucial to growth.
Firstly, data-driven decision making starts with the all-important strategy. This helps focus retailers attention by putting aside all the data that’s not helpful for their business.
To become more data-driven in 5 steps retailers should:
- define goals and their own strategy;
- identify key areas for their business;
- optimize data targeting;
- collect and analyze data;
- lastly and most importantly – turn insights into action.
But, lets face it. Implementing these strategies and solutions it’s not easy. That is why 67% of companies still follow a traditional business model because they lack of understanding and ignore the capabilities and limitations of BI solutions. Moreover, 42% of business leaders think their company would need training and education and that they would also need to promote that culture internally among their organization. Finally, 39% are concerned about the financial investment and data management.
With small steps it is possible to improve performance and incorporate the learning into the business.
For example, companies who have enabled data-driven decision making and business intelligence solutions say that they have benefited from predictions on activity related to machines, customers or business health by 38%.
And, in general terms, 45% of organizations who have invested in business solutions and have become data-driven say that they’ve already got a positive impact on their businesses and 27% say they will have an impact on the next one to three years.
So, by becoming a data-driven retailers are able to:
- Stay competitive among forward-thinking organizations that already use data to their leverage.
- Concentrate their attention on the customer and enjoy a clearer insight into the customer and their circuit.
- Be cost-effective – it can be costly to store large volumes of data. Retailers should put data to work and use it to the company’s advantage.
- Detect new or anticipate opportunities, as well as expanding and raising more desirable conditions
In short, retailers who become more data-driven and invest in BI become more alert and are better able to answer to markets transformation and innovation.
Inovretail has broad variety of solutions for your business. Define your goals and we’ll help you achieving them by leveraging your data and turning your insights into action!