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While businesses don’t often use the term “big data” anymore, the concept has not disappeared. The analysis of large amounts of data to mine a variety of insights and actions still provides the strongest guideposts when building a strategic direction. Many companies still struggle with this, whether it’s because of lack of resources or time, or perhaps because the data sources themselves include inaccuracies or incongruences, or are unreliable. Analyzing the purchase and performance data you have access to is imperative to staying competitive in the retail industry.
Lisa Lopez
The HRG team is currently involved in an analysis project which requires the examination of thousands of store performance files, down to the SKU level. Once we normalized the disparate data pools by adding or correcting SKUs using our product library, standardized categorizations using our Fine Line classification system, and verified class of trade against an industry standards database, a team of HRG analysts have been able to look for growth opportunities from a variety of angles.
Finding the right tool to allow deep dives into the data once it has been cleansed is essential. The HRG team is using a platform that makes it easy to link various data sources in any number of ways to look at the information through multiple lenses. With visual as well as tabular views of the data, the drill-down features help reveal insights that will drive recommendations for strategies and tactics.
From a retailer vantage point, being able to assess sales and movement from multiple perspectives is the foundation for strong strategies to find real pockets where focused efforts can effect positive change. You could find distribution centers that are underperforming or evidence that a new DC is necessary to take sales to the next level. There may be products overperforming or underperforming in certain channels or regions and, digging into the data, you can find reason for expanding efforts to promote those SKUs or replace them to improve your space-to-sales ratios.
From the manufacturer perspective, looking at product performance per retailer, regionally or by channel, is all useful as marketing strategies are developed, but manufacturers should be taking a deeper dive. When looking at brand trajectory, the number of competitors can vary by channel, region and category if the product resides in more than one category. Completing a brand analysis should include a review of syndicated data, transaction-level POS data if available, or wholesaler withdrawal data, and pertinent market research and trend information. If internal resources aren’t available, find industry experts who can not only synthesize the data to uncover meaningful insights, but can also suggest specific actions to take to reach the sales goal.
E-commerce sales is another data set that can be mined for insights to enhance marketing and sales strategies. Examining traffic, conversions and the customer journey can shed light on modifications that may be necessary to drive conversions. In addition, digging into product page views, adds to the cart, number of purchases, return rate, customer reviews, search terms, referral traffic and cart abandonment will provide a robust view of how a product is performing for both the retailer and the manufacturer.
Another angle for analysis is consumer behavior. If there’s budget money to conduct primary research, that is ideal, but not always feasible on a regular basis. Combining the data gathered from customer reviews, social media comments and activity, and feedback from polls or surveys conducted after visit or purchase will help enhance shopper personas. Understanding shopper behavior and decision criteria in contrast to the stark reality of the data often leads to the identification of emerging trends and the “why behind the buy.” Such behavioral data offers human insights that transactional data cannot reveal.
Dr. W. Edwards Deming famously said, “Without data, all we have is an opinion.” Compiling the right data, preparing it for analysis, and then transforming insights into action may provide the most important competitive advantage for any business in today’s market.
Lisa Lopez is HRG’s digital assets manager. HRG improves results across the retail supply chain by addressing dynamic needs such as data and analysis, brand development, fixture coordination and management, shopper experience, and retail communications.
