July is set to be marked by most of the UK economy opening up and a partial return of the travel industry. However, with a local lockdown imposed in Leicester and soaring Covid-19 cases across many parts of the world, we’re set for summer as we’ve never seen. ‘Uncertainty’ is likely to be the watchword of the next few months.
In June, the key for many retailers was attempting to decipher how customer behaviour had changed since the lockdown. Whilst we’re nowhere near getting a complete picture yet, retailers that began collecting and analysing customer data both instore and online should have begun to get a good baseline of findings. Now, the challenge is to build this data to help adapt to the ‘new normal’ and anticipate how fluctuating restrictions will impact a business in the short and medium terms. If your business didn’t collect and analyse customer data after opening up, fear not, it is never too late to start.
For those businesses that remain skeptical about the need to collect more customer data, remember macroeconomic statistics can only tell you so much. It will take a long time for trends to fully emerge and the impact is likely to vary markedly between businesses. The only way to be able to understand and adapt your business is to take the matter into your own hands.
The essential questions individual retailers need to know include: Has consumer demand been permanently depressed? Have people deferred purchases they would have made during the lockdown and are now making up for lost time? Has there been a more permanent switch to online and bigger retailers? Are people spending more due to savings made during the lockdown or less due to fears of recession? Additionally, with changes to restrictions in July, those that already have insights on the above, should be asking questions including how has behaviour changed since more shops on the highstreet opened? Are holidaymakers – both foreign and domestic – making an impact? How is customer sentiment towards in-store COVID restrictions changing?
The exact questions and approach to answering them will be bespoke to each business, but there are some steps that every retailer can take to get up and running:
1) Ascertain your data knowns and unknowns: Website analytics, sales data, marketing, and social media engagement stats etc. are available to nearly every business and will provide the bedrock for understanding how conditions have changed and (most importantly) could change in the future. If you don’t currently collect this data, it is absolutely critical to set up processes that will store it in a manner in which it can be easily analysed. Often the biggest knowledge gap retailers have is in store. Beyond simple transaction data, retailers are blind to footfall, customer journeys around the store, connecting in-store customers with online identities, how and why sales are abandoned and the general sentiment of customers. This data dearth can manifest itself in low marketing engagement stats, inaccurate predictive modelling for sales, and, most visibly, an inability to answer simple questions.
2) What do you want to know?: Not all data points are created equal, nor is it practical or wise to attempt to collect everything you can. Ideally, think about the questions you want and need answers to now and work backward. From your list of questions, you’ll be able to work with your data specialists to determine the exact data points you need and therefore what new information you need to collect.
3) Simple plans are more sustainable: Companies often approach data collection with a near-fatal misconception that customers need to be duped into providing their data. The reality is that many people are happy to provide information directly if they approached in a transparent manner and can see the clear benefit of doing so. Asking customers questions via in-store surveys or online polls is often the most effective strategy. With conditions as they are, most will understand why you would need to know their thoughts and feelings. For information that can’t be easily obtained by direct questioning or observations from your in-store staff (e.g. on footfall), technology can provide assistance. One example is using fintech software that captures and collates card data from purchases, helping you to link in-store and online identities.
4) Analyse the data – quickly: The depth to which a business analyses data is of course dependent on their resources. There will also be large variations in the approach that will work best – updating existing models, creating new algorithms, looking at how data is integrated into the existing enterprise software and Business Intelligence platforms etc.. However, with the retail environment likely to be highly volatile, the key will be to ensure that the insights gained are updated as regularly as possible – ideally in real-time – platforms like Sisense can help with this.
5) Get the whole team involved: There is little point in having a lot of data or insights if they cannot be acted upon. Every team member across your business needs to know why data is collected, what it does and doesn’t tell them, and what the insights really mean. The more people you have reviewing and understanding the data the more ideas your team will generate and the faster your business can respond.
6) Test, learn, and adapt: A scientific approach can help to mitigate risk and light the way forward. This is a perfect time to test new strategies. If, for example, you’re presented with data that in-store sales conversions are very low, you can test different solutions to identify which is the most effective. There is no ‘right way’ in this new world, and you need to be bold with testing new things.
This is of course just one route to collecting, analysing, and using data that can help retailers make better decisions. If this sounds daunting to you or simply beyond your capability or resources, do not despair. Any information you can collect and analyse at even the most basic level will be better than working entirely in the dark. Simply asking your customers directly how their behaviour has changed might give you the vital clues that tell you how you can adjust to survive and thrive in the ‘new normal’.