Drowning in data

The retail mantra of “knowing your customer” has never been more true than it is today. And many retailers certainly appear to have plenty of tools to do just that with sales data pouring into the company’s systems every minute, hour and day. But it would seem that this is still not enough if you talk to retailers - many of whom remain convinced that they still do not know enough. Or is it that they are simply drowning in data? Or maybe event that its the wrong kind of data?

Having attended several events in the last few days that had a similar theme, I think the answer might actually be that its not only the wrong kind of data but it is also the wrong way of looking at the question. For me, the real eye-opener was a presentation given by the retail industry head for Google in the UK. Paul Frantz is steeped in the online world, even from before his time at Google. Hence his talk spoke more about the incredible growth of the internet medium than about Google. What he did reveal was how Google views the world - and that is from the consumer demand point of view. As a senior retailer pointed out in another presentation, the outstanding thing about the internet is that it shows you what consumers are thinking and what they will be demanding. This gives a completely new, radical and insightful way of planning your business. The traditional data that retailers are drowning in is sales data - but its very nature, historic data.

It is clear that most retailers operating today understand the power of the internet as a retail channel. What many probably haven’t quite grasped however is the sheer pace of change and the incredible potential that it has to turn the accepted rules of retailing upside down. Firstly there is this insight into your existing and your potential customers. And that they behave differently online….but also have the same expectations of the brand and the service they expect. So don’t put barriers up to prevent them buying from you that you wouldn’t do in store. Why do so many retailers continue to make customers fill in a registration form at the online checkout? You don’t in store and its been proven to put customers off from completing their purchases.

The other fundamental truth is that online retailing has to be integrated more effectively and simply into the bricks and mortar business. Multi channel retailing is the buzz phrase, but Paul Frantz of Google pointed out that even this continues to reinforce the old thinking. A retailer he admires for its grasp of the new retail model is JC Penney who prefer to call their approach “multi point” retailing rather than multi channel.

But the message I for one took away - and many others of those in the audience - was that in an increasingly tough trading environment, the internet demands more serious consideration and investment because it can and will deliver change and profitable business with it. The market rarely expands, so you have to be better than the next competitor to ensure you can deliver that.