Transforming retail businesses and brands to become future-ready and insight-driven starts now, Deloitte report
Report outlines strategies on how retailers can get ahead when it comes to understanding the changing consumer’s path of purchase and polarized retail landscape
Toronto, November 1, 2017 – Changes in customer preferences and the path to purchase are driving the need for Canadian retailers to respond and future proof their business to ensure they do not become another Canadian casualty in the retail industry. Today, Deloitte released a report – Future-proofing your retail business: Balancing the art and science of advanced analytics in customer experience – urging retailers to shift their mindset in how they use analytics and artificial intelligence to succeed and win in delivering a distinct consumer experience.
Canadian retailers looking to grow and thrive in the face of constant disruption must challenge traditional ways of understanding the customer and operate as an Insight Driven Organization (IDO). According to Deloitte, Insight Driven Organizations streamline analytics across all business functions, including strategy, people, process, data and technology. These organizations embed analysis, data and reason across decision-making processes to keep pace with change and consumer demands. A Deloitte study found that 85 per cent of analytically mature organizations exceed their corporate goals compared to 67 per cent of less mature organizations.
“Today, customers engage with retailers in-store, online and with mobile. Brands are also are interacting directly with customers and e-commerce sales continue to grow,” said Tom Quinn, Partner and National Retail and Wholesale Distribution Leader at Deloitte Canada. “This reality has forced many retailers to operate in a reactive manner – making it very difficult for them to get ahead.”
Ian Scott, Partner and Chief Data Scientist said, “Until recently, technology operated to some degree in isolation as a department within an organization. The most successful retailers will use artificial intelligence and advanced analytics as business enablers to uncover deeper insights, craft predictions and generate recommendations to better understand the consumer. A partnership between technology and business will be a critical ingredient to winning in the market.”
Advanced analytics uses sophisticated techniques and tools to gather, organize and analyze data. It can help retailers identify relationships that would otherwise go undetected by revealing insights about customer purchase patterns so that retailers can offer one-to-one personalized experiences. Second, it can accelerate approaches to segmentation beyond traditional demographics like income, region or by generations. Advanced analytics can help retailers be more granular and segment by social values, lifestyle and relationships. Lastly, it enables brands with cognitive market-sensing capabilities through real-time reporting and big data analysis to enhance an organization’s ability to make targeted and informed investment decisions.
“AI, big data and other exponential technologies have transformed the landscape today giving retailers a powerful set of tools, but many retailers will need to re-think a common approach that addresses challenges with costly ad-hoc solutions,” said Jennifer Lee, Partner and Retail Consumer Analytics Leader at Deloitte Canada. “AI has been around for some time and is rapidly maturing. AI now has the ability to help companies be insight driven across the organization.”
The Deloitte report identifies three areas of focus to develop a playbook for success.
- Leverage analytics – Access to predictive analytics can help form key customer insights, identify growth opportunities and determine the best omnichannel investments. Analytics is key to making the shift to be an insight-driven, customer-centric organization. It is the difference between being intentions-based and turning insights into action.
- Challenge traditional ways of understanding the customer – Historically, retailers looked primarily at demographic segmentation while working backward from data points to try to determine customer preferences. The analytics-enabled method, in contrast, provides access to datasets and data analytics capabilities to various individuals and functions within an organization. This approach empowers individuals to leverage the data points and produce predictive insights to deepen engagement with a brand and win the customer.
- Evaluate opportunities to expand through M&A, organic growth and strategic partnerships – Retailers that identify gaps in capabilities remain competitive by making game-changing decisions through strategic partnerships or mergers and acquisitions. Delivering a customer experience is challenging for a retailer to accomplish alone because the path to purchase is complex. Retailers can enhance their knowledge of relevant and best practices inside – and outside of the industry by forming strategic partnerships. Partnerships, including with those in other sectors of the economy, are increasingly seen as critical for success.
The retail landscape is rapid, changing and polarized. Practical applications of AI today enables businesses to identify risks and opportunities, as well as create value for the business. To be successful, retailers must change their approach to data analytics and artificial intelligence. The journey begins with using insights help guide actions. Learn more here .
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