Retailers fail to use consumer data for omni-channel edge
Many retailers still manage their businesses based on traditional brick and mortar practices
While most of today's retailers have amassed years of consumer data and research - the vast majority are still unable to use it effectively to create an omni-channel shopping capability, new research suggests.
Less than 9% of retailers are leveraging customer information in a structured, usable way, according to retail advisory firm HRC Advisory, whose latest retail industry study suggests outdated organisational structures and processes, non-integrated IT platforms, and a lack of a clear roadmap are major barriers to retailers' omni-channel efforts.
"Retailers are inundated with consumer data and research, but the reality is the vast majority are not able to effectively use it," said Farla Efros, EVP/COO of HRC Advisory, a unit of Hilco Global.
"Despite the impact of fast moving competitors like Amazon, more digitally savvy consumers and a volatile economy, many retailers are still planning and managing their businesses based on traditional brick and mortar practices.
"The changing dynamics of today's retail environment require new approaches to meet the challenges and opportunities presented by today's consumer, and retailers need to update and integrate their organisations accordingly to avoid the lost sale."
The report's findings show that just 9% of retailers are leveraging customer data in a structured way as part of their merchandise buying and planning processes.
On top of this, most retailers aren't operationally structured for omni-channel, with 88.2% of those surveyed saying their e-commerce operations and marketing largely remain separate silos.
Another challenge is that inventory isn't being fulfilled effectively, with 84.5% of retailers surveyed (across all sectors) currently focusing on enabling new fulfillment options to avoid lost sales. But just 10% have the capabilities to effectively fulfill from store, which is a way for them to contain fulfillment and return costs, as well as avoid some markdowns.
And retailers are still seeking the right balance between online exclusives and product available in all their channels. Less than half (42.5%) have or are exploring "online exclusives" beyond colour and size extensions to new categories and brands, while 66.2% are primarily focused on size and colour extensions to address the realities of constrained brick and mortar space and slow inventory productivity.
"First and foremost, retailers need to recognize there has been a meaningful shift in power towards the consumer resulting from today's numerous ways of purchasing and much increased price transparency," Efros continued.
"In order to mitigate this shift and maintain market share, retailers need to adequately differentiate on the right combination of unique and/or exclusive products that are valued by the customer, while providing exceptional service and a compelling in-store experience that can't be matched by newer pure play online competitors."
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