by Russ Hill Jr., Senior Director for Global Retail, CP and Wholesale Distribution Industry Marketing, SAP

Woman talking to clerk at paint storeThe retail industry has never been more complex or moved so fast.  The pace of change is accelerating to the point that many retailers are paralyzed by the speed at which they need to move, because they don’t always know what direction to take. As consumers take advantage of new channels and interact more through social media and mobile devices, retailers must respond – quickly. Loyal customers must be protected, and to acquire new customers, precise and accurate segments must be identified and targeted for growth.

A rapidly expanding set of new data sources must be employed horizontally and coupled with re-engineering the enterprise to make better decisions about offers and other actions targeted at consumers. In other words, store operations, merchandising, and marketing will change so much that they won’t be Infographic Russrecognized as we know them today.

Meanwhile, complex supply chains, merchandising, and store operations must be aligned to deliver the right products in the right sizes (or packaging) to the right locations through the right channels. Retailers that want to succeed in this environment must employ analytics horizontally across the enterprise to make the right decisions and do so in real time in order to achieve a differentiated approach to their competition.

When considering the value of real-time analytics, retail executives should ask four key questions.

Are We Organized to Support and Execute Real-Time Analytics?

Retailers must leverage a mix of internal and external data resources to initiate their intra-collaborative efforts between operations and departments.  Real-time analytics is an enabler. It’s a way of thinking about your business in a multi-layered context and applying a solution to a specific line of business to make it “task oriented” with actionable information. Therefore, a critical first step is assessing your entire business to determine where and how new data sources coupled with real-time access can be applied.

Do We have the Right Policies and Security Standards in Place?

It’s mandatory to establish policies that address how (and which) employees interact with existing and new data and social media platforms. Guidelines should cover the tone (authentic), style (informal), and nature of the information being shared and used in real time to address the concerns of the consumer.

How Are We Employing Real-Time Insights Across Lines of Business like Marketing, Merchandising, Customer Service, and Store Personnel?

Structured and unstructured data are critical components to the metrics and dimensions required to assess today’s consumer in real time. Social media insights aren’t useful unless they’re actionable. Make sure processes are in place to distribute information to business units that are best equipped to act on them.

What Metrics Are Most Appropriate for Our Business Objectives?

Part of the “trial and error” approach lies in determining which metrics are worth tracking for all enterprise operations. It will be necessary to measure how consumer engagement, fulfillment, labor, turnover, etc. translates into business and financial value. If marketing “owns” the social media strategy, it should be working closely with finance to develop metrics that align with business key performance indicators (KPIs). And these KPIs should align with other operations in order to benefit from having real-time capabilities to take action.

Having the capacity to employ real-time analytics is about understanding the enterprise operational performance in order to address potential issues or create differentiated approaches that will retain and acquire customers for long term growth. If there’s one critical lesson to be learned, it’s to start small. Start small, then align to a strategic roadmap for identifying key initiatives, define respective KPIs for real-time proliferation to multiple lines of business, and adjust as necessary.

It’s the value of the insight for the one unique solution to address the new opportunity – along with the metrics to evaluate it – that truly matters and is potentially the differentiator in today’s intensely competitive retail environment.

Are you getting closer to your consumers?

 

RussRuss Hill has more than 30 years of experience in the retail, wholesale distribution, and data warehousing industry. He also has a wide variety of retail expertise in procurement, marketing, sales, and distribution, and effectively led a cross-functional team that developed a retail program of analytical and operational applications at Teradata and now SAP. Russ focuses on business analytics for the retail and wholesale distribution industries, has written numerous articles, and interacts with many multinational retailers.

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