Companies that want to capitalize on Big Data to generate additional resources of income will need to harness the importance of consumer insights and analytics in this new age of e-commerce and consumer-focused experiences. CPG retailers should stay on top of all the data that is at their fingertips on an instantaneous basis, but how? For many independents, this may be a new phenomenon but it is easy to navigate with the right knowledge and tools. So, what exactly is Big Data and how can the independent grocer use this data to ensure consistent success?
Big Data is information compiled from various internal and external sources such as transactions, sales, social media interactions, and even mobile device app usage, and stored for later use by the appropriate sales or reporting agency. This data originates from any point of contact with a retailer through various digital outlets that captures consented customer information and demographics. This data could also include habits, previous purchases and coupons used. Savvy CPG retailers know that this data can be used to adapt their products and services to best meet the needs of their customers, help optimize in-house operations and create more sources of revenue for sustainability.
Retailers who succeed in Big Data utilize four tactics: the use of sophisticated analytical tools, the collection of data, the review of customer behavior, and a generation or report-out of insights for retailers to adjust their strategy. Below is the breakdown of tactic #1:
Using Sophisticated Analytical Tools to Set Costs & Increase Profit
Successful companies invest in various tools and programs to gather pertinent information that will help them succeed. Retailers can simultaneously build functional expertise in shopper insights or pricing, but also gather data from retailers needed to reach their consumers. This data could include full-basket and shopper-panel data, loyalty-card and membership information as well as coupon-redemption reports. One of these tools includes cutting-edge revenue-growth management (RGM) technologies, which helps retailers increase profit by implementing targeted shopping strategies. Grocers are able to set daily shelf prices, run coupon programs and reduce spoilage.
Today, successful retailers also include Omnichannel tactics and shopping methods to reach the ultimate number of customers. These could include digital, mobile, and in-store promotions and the integration of all of them to achieve one single outcome: profit! Since the industry now encompasses regional and independent grocery chains, discount stores, club stores, dollar stores, and a new demographic group of Millennials that prefer digital communication, using intelligent analytical tools to reach them is imperative to succeed. Some retailers have even gone the extra mile to use these tools to create their own e-commerce-enabled websites to enhance customer experiences, strengthen their own brand presence, collect pertinent data, develop necessary insights, and test new products and promotions.
Success using digital strategies is a constantly evolving process.
Independent grocers need to harness mobile technologies to drive growth, set correct prices, and understand the way their customers want to receive communication from them to drive more revenue and profit. Integrating proper digital strategies and analytical tools into great omnichannel experiences will turn all that marketing into purchases and dollars.
Source: McKinsey & Company