In a world driven by digital information, it’s important for us to remember how data analytics functions. Data is collected from a constant feedback loop of information. Recorded data gets fed in, and after delving into that information, an analysis and predictions can be formulated.
While it may seem obvious, it’s easy to take this process for granted. Now that we’ve set that foundation, we can take a look at retail’s current predicament.
Retail sales experienced their largest decline in nearly three decades in Match, with an 8.7 month-over-month drop. In light of the circumstances, this drop in sales doesn’t come as much surprise. We’re in the middle of a pandemic and recently entered into the first period of economic decline in the last decade.
Retailers Navigating Blind
The biggest concern here isn’t necessarily the sales rates – it’s the lack of consumer data information. Without a strong influx of brick-and-mortar shoppers, the data pool that retailers were gathering from has dried up.
Considering we are all wandering in a massive atmosphere of uncertainty, being without a feasible data outlook is a bleak situation.
As stated before, today’s market is literally fueled by data. In fact, big data is said to be the biggest area of competition between brands and businesses. Data is at the core of retailers’ survival plan, and it’s just been majorly disrupted. Will this turn out to be a fatal blow?
E-Commerce Leads the Way
In my opinion, I see a positive change happening in the realm of data. Retailers need to reconfigure the way they’ve been collecting data that shapes their most impactful strategy decisions, such as customer loyalty programs, AI product recommendation projects, and inventory logistics.
It’s true that brick-and-mortar data has experienced a major slowdown, but e-commerce data is being collected at never before seen rates.
Realistically, online shopping provides retailers with a much more sophisticated data collection process. Because of the pandemic’s stay-at-home orders and market closures, people who weren’t online shopping now are – meaning that now, there’s better data. With everyone shopping online, it’s easier to track shopping activity and collect back-end information.
When retailers are tracking via clicks, they’re able to track the shopper’s entire experience, whereas physical retailers can only really track final purchases.
We can see this by looking at two ways to buy groceries: in-store, or on Instacart. When shopping in a store, the data collection process will only derive a fraction of the data that Instacart would detect. We need to have the ability to measure internally — because Instacart, for example, isn’t giving that data.
Any good analyzer knows that the more information you have, the better and more accurate the derived predictions will be. Online shopping lets retailers track what items were viewed, what was added to the cart, what was removed, what was compromised, what was finally bought, and much, much more.
When everyone was shopping in different ways, it wasn’t practical to completely rely on e-commerce data. But, now that we’re at home and online, it’s a pressing reality.
This highly advanced version of consumer data collection is the right-now of retail, and it will surely lead the way into the post-COVID market.