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How Real-Time Data Helps Businesses Adapt to New Realities

By Jess Shanahan, Contributor | May 12, 2020

The current health situation is impacting the entire world and businesses are trying to adapt to rapidly changing situations. Few have been hit as hard as retailers and the change in customer buying habits is likely to last well into the future. In the U.S., retail sales for clothing stores alone fell 50 percent from February to March, according to data from Statista.

Now, more than ever, businesses need to adapt to changing circumstances and those that once relied on in-person sales are shifting their focus to digital.

The use of real-time data analytics is one solution that has the potential to address myriad challenges that retail businesses now face. Using this kind of data, businesses can:

  • Increase visibility of their entire supply chain
  • Connect with customers on a more personal level
  • Track customer and market trends
  • Improve the customer experience across the entire buying process

Insights from Bain show that businesses that thrive during a recession are also the ones that are willing to adopt new technologies.

Adapting to “The New Now”

Even retailers that typically only did a small amount of business online are seeing a huge increase in online sales. Grocery stores, for example. In Forbes, data from Rakuten Intelligence shows online order volume from grocery merchants rose 210 percent between March 12 and March 15, compared with the same period the previous year.

Across the board, businesses are adopting new technologies to adapt to “The New Now” but, for retailers, it's real-time data that may provide solutions to some of the challenges.

Challenges Facing Retailers

There are challenges both with supply chain level and customer experience. Some are quite clear:

  • Being unable to keep up with demand
  • Lack of volume to maintain cash flow
  • Long delivery wait times
  • Uncertainty over the future

But the challenges also go much deeper than that as many businesses need to increase their supply chain transparency, offer a new way of shopping, and completely alter the way they communicate with customers.

The Need for Improved Customer Experience

Consumers are being more careful about where they spend their money.  When they do shop online, they want to know they're being looked after by a business that understands their needs.

This is one area where real-time data can help a business adapt. For example, a data-driven point of sale (POS) system processes orders, but it can also collect and analyze customer data. This information can then be used to personalize customer interactions. For example, email messaging letting a customer know that clothing in their preferred style (based on previous transactions both online and in-store) is in stock.

Most POS systems also allow retailers to encourage return sales through customer loyalty programs. This works well in-store but can also be used to promote online buying with loyalty points or vouchers.

Managing Customer Expectations Around Delivery

Another challenge is the uncertainty around delivery times. It’s something that's putting off many customers from buying online, especially those who prefer to shop in-store. Consumers are also actively seeking contactless delivery options. Transparency is important and using real-time data to track the supply chain end-to-end can provide much-needed security for wary consumers.

One example of using real-time data in this way is the ability to track products from the supplier all the way to the final mile of delivery to the customer.

Warehouses and logistics companies often use RFID tags to check in shipments and keep the rest of the supply chain updated on expected delivery times. With this deep visibility into inventories, not only does the supply chain become more efficient, but retailers can use the data to provide clear updates to consumers. This level of transparency is what many customers expect even now.

Data can also help improve and enhance digital channels by assisting and enabling contactless or near-contactless interactions like BOPIS (buy online, pick up in store) and curbside pickup. Real-time data is critical here as buyers want to know the moment their delivery is available for pick up to minimize wait times, as well as time spent outside their homes.

Cutting Through The Noise

While it's always important to listen to customers, nothing gives a real sense of a situation like data.

According to Statista, many industries saw a drastic drop in sales between February and March of this year, and many consumers intend to decrease their net spending on certain products. If an individual retailer could monitor more closely what's being viewed and purchased on their e-commerce website, they could invest more time and resources into promoting popular products when there’s healthy demand.

A beauty brand, for example, might see an overall downturn in online visits, but data might show there's high demand for certain products they sell. Seeing this change in buyer behavior gives the business a chance to react and potentially to pivot to a new trend.

Looking to the future is an important part of being an adaptable business and helps identify situations and scenarios where a change in strategy might be required. It's the collection and analysis of data that gives businesses the ability to forecast when these changes might be necessary.

Importance of Analyzing Trends

Whether in response to “The New Now” or more generally, retailers can identify purchasing habits both online and in-store, which is useful in predicting trends. It helps inform buying, merchandising, and messaging decisions in the future.

A well-recognized example is how Amazon uses real-time trend data and AI (artificial intelligence) to adjust pricing to reflect supply and demand, as well as to choose how it serves ads to buyers. While small businesses might not be able to immediately implement something as complex, real-time data can help analyze buying patterns on a smaller scale.

As retailers now face longer lead times on in-demand products from suppliers, real-time data can help predict when to re-order. Avoiding being out of stock helps maintain sales and customer interest.

Retailers selling high demand products can use real-time data to suggest products with affinities that are not as widely sought or available in the current market. For example, suggesting non-essential items as part of an essential shop, retailers can increase revenue and average order value.

In many ways, the current situation mirrors the aftermath of the SARS epidemic in China as a “catapult for digital shopping,” Jason Goldberg, Chief Commerce Strategy Officer at Publis Communications, told Forbes. By staying close to their customers and being more nimble, many small retailers can capitalize on the situation to offer products not available at big boxes, according to an article at Marketplace.

Looking to the future, as businesses collect more data, it becomes valuable in maintaining the efficiency of supply chains as well as predicting seasonal trends and changes in product availability.

The Future: Permanent Change in Buying Habits

COVID-19 has forever altered the customer experience and it will continue to influence behaviors at scale for some time to come, according to a report from Accenture.

Buyers will form new habits leading to a permanent change in the way retailers do business. Consumer behaviors, how they perceive brands, and what their expectations are will continually evolve in response to the health and economic impacts of COVID-19.

A business's first inclination might be to focus solely on survival, but those that look to the future may find new opportunities. For example, combining real-time data and AI or machine learning—to manage trends, communications, and stock levels—increases the efficiency of the business and its supply chains. Retailers that adopt technology now will be one step ahead when it comes to developing how it's used across all sales channels.

There has never been a better time for retailers to think about their data needs and adopt technology that can help them improve processes, insights, and forecasting. The capabilities of technology added now can help businesses thrive as the economy begins to recover from the impact of COVID-19.

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