Game-changing analytics trends for 2016
Often in retail, it is difficult enough to say what will happen this afternoon, let alone tomorrow, next month or over the coming year. So any statement about the future of retail is sometimes correctly viewed with scepticism and a sense of circumspection.
Best practice retailers are increasingly becoming data driven, using analytics to drive decisions around product range, pricing and marketing communications across a variety of channels. When we consider five likely trends in Analytics that are likely to impact retail over 2016/17, we use the analogy of a train approaching a station on a set of rail lines. No prizes for guessing where the train and the carriages will end up, I hear you say.
The rise of Asia and other emerging economies, our ageing population, and, most importantly, new technologies, are key drivers for changes in the way best practice retailers use data as a source for competitive advantage. Issues around intellectual property, privacy and use of personal information will also dominate as the legal fraternity keep up with this avalanche of digital innovation from the exponential increases in the use of data.
In retail, competition in grocery and fuel retailing; regulations on planning, zoning and trading hours; and specific regulations such as those affecting pharmacy and liquor retailing were subjects of the Harper review in 2015. These challenges make competition more pervasive, and retailers now need to know their customer ever more intimately in order to compete effectively. So with this, we suggest the top five trends in retail analytics for next year.
#1: Innovation supported by insights from data
We see data as a basis of competitive advantage, and becoming prolific over the next year. Because data-driven marketers know shoppers’ preferences, retail analytics will lead in automating activities around customer discovery, and actual purchases. We will likely see retailers use data and increasingly sophisticated analytics to turn insight into innovation (i.e., fresh marketing activities and development of new products), informing strategic decision making and outpacing competition on a variety of fronts.
#2: Selective move to ubiquitous access to data/insight
IBM predicts retail investment on cloud-based analytics solutions will grow significantly – up to three times more quickly than spending on on-premises solutions and hybrid deployments. International research organisation, IDC, suggests data sources located both in and out of the cloud and business-level metadata repositories will be used to relate data. This will support more effective communications and almost instantaneous access to insights at the storefront than ever before.
#3: Use of artificial intelligence or cognitive computing for simpler shopping
The increased use natural language processing and machine learning to help people interact naturally with machines will increase in the next year. Personalised applications using cognitive computing will work to make the shopper journey for food, clothes, jewellery and pharmacy more exciting and simpler. Online auctions will be supported by real-time models to raise the bar in the ability of customers to make more relevant and deal-breaking bids.
#4: Realising profit from past investments in data
We are likely to see more organisations monetising data for the first time in many years, whether by selling it or by providing value-added content. We are observing, anecdotally, retailers, healthcare providers, banks and services companies purchasing external data to supplement internally generated data to deliver more powerful insights. Others we work with are looking for more effective ways of packaging data, experimenting on the optimal mix of data and combining content analytics with structured data to deliver additional value with analytics.
#5: Analytics following the Internet of Things
There is no escaping the explosion in the growth of Internet of Things (IoT) in 2016. We believe the use of streaming analytics that follows on the heels of the explosion of data coming from the IoT will lead to the need for even more data scientists to work through data in search of visual cues and patterns, and then generate predictive models for incoming events.
All five of these trends in analytics that we see in 2016/17 support retail organisations no matter where you are in your analytics journey. Analytics and the generation of sharper shopper insights will be core to a retailer’s competitiveness.
INAUGURAL RETAIL AWARDS
Dr Ian Tho will be joining the panel of judges for the inaugural Retail Customer Excellence Awards, to be held in Melbourne on Wednesday May 11. A collaboration between Inside Retail and Association and Communications Events, organisers of the Total Retail & Payments EXPO conference, the event aims to raise the profile of Australian retail businesses who place the customer at the core of everything they do, says event manager, Catherine van der Meulen.
“We are experiencing a dynamic, ever-evolving retail landscape where technology has taken centre stage,” said Meulen. “These awards shift the lime light to the people of the businesses who create lasting and memorable experiences for their customers every day.”
Deadline for submissions to enter the awards is April 3, with the full list of Retail Customer Excellence Awards categories below:
- Customer centricity excellence award
- In store Customer Experience Award
- Online Customer Experience Award
- Omni-channel Customer Experience Award
- In store Technology Implementation Experience Award
- Loyalty Program Experience Award
- Personalisation Excellence Award
- Customer Excellence Team Award
- Responsible Impact Excellence Award
- In store Theatre Experience Award
More information on The Retailer Customer Excellence Awards can be found at www.retailerawards.com.au
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