Operationalizing retail analytics to accelerate addressing new customer “sub” segments

Retail has seen huge changes and been bounced around between online and ‘bricks and mortar’, with different types of shops affected in very different ways. According to PwC’s March 2021 Global Consumer Insights Pulse Survey:  online shopping exceeded in-store purchases in all product categories including groceries. Online shopping also was higher in March 2021 study when compared with similar study in Sep 2020. Only time will tell whether these changes will be sustained beyond the pandemic, but it seems likely.

The SAS Global hackathon had a vibrant retail track, with teams pushing the envelope on different fronts. We celebrated with a #SASChat panel and I was impressed by the opportunities that have opened up. Here are the main themes that struck me:

There is huge scope and potential for analytics in retail

#HackinSAS included seven broadly retail-based teams and projects—but that does not do justice to the wide spectrum of use cases showcased in the hackathon. For example, one team, OLL Mobi, is creating a GDPR-compliant way for retailers to track customers and engage with them by providing receipts. Another team has used an application of CT Global’s algorithm for customer profitability, which pushed scores into a report within Salesforce CRM. This is a step on the way to improving customer optimisation.

The pandemic has created new customer segments in retail

There is no doubt that the pandemic has accelerated change in the retail sector. It has created new customer segments with distinct expectations. Even in emerging countries, customers now expect personalised offers. However, getting personalisation right is hard. Analytics is key to meeting the expectations of these customers in future—and the hackathon participants show how businesses are rising to the challenge. These teams and others will help retailers to respond to the new customer segments created by the pandemic.

Embedding analytics in operations is crucial

I have said it before (and will doubtless say it again): it is essential that analytics is not seen merely as a ‘support function’ and external to business processes. Instead, it needs to be embedded into everyday operations throughout the business. Crucially, if you want to drive and measure actions using analytics, you have to design operations and processes analytically. The two sides—business processes and analytics—need to be a coherent whole, not separate.

Cloud and real-time analytics are enablers—but require a change in approach

There is no question that cloud and real-time analytics will enable huge change and innovation in the retail sector. However, this is not a matter of ‘lift and shift’. Instead, it will need a complete change of architecture if retailers are to take full advantage. There is, of course, a question about whether retailers will consider this worthwhile. Unfortunately, historically many have failed to fully capitalise on personalisation initiatives. Indeed, around 80% of personalisation initiatives are expected to be abandoned by 2025 because of their lack of return on investment, suggesting that real change is needed in the sector.

Imagination and innovation will be needed to address some retail challenges

We sometimes seem to be suggesting that analytics holds the answer to everything. The insights from analytics can certainly be helpful in understanding customer behaviour. However, insights are only the start of the problem-solving process, and some problems are harder to address than others. For example, one of the biggest issues in retail is returns from online sales—and that is only going to get worse as more customers move online. There may be insights from analytics, but imagination and innovation will be essential to find a solution. Fortunately, #HackinSAS shows us that both of those are available!

Hackathons offers opportunities for rapid deployment and testing

Perhaps this is not strictly about analytics in retail. However, I think it is worth highlighting how hackathons can help to drive forward projects and deliver a viable product in a short space of time. They provide options for rapid deployment and testing, as well as focused use of resources that might not otherwise be available. They are, therefore, a driver of innovation across all sectors, including retail.

Retail needs analytics—and that is where the future lies

One major takeaway for me from both the #SASchat and #HackinSAS was the value of analytics for retail. There has been enormous and rapid change in the sector in the last year. The retail use cases at this year’s #HackinSAS were very different from those we have seen in previous years—but demonstrate that analytics is keeping pace with change. My strong conclusion is that retail needs analytics, and solutions are being developed that will drive the future of the sector.