Forrester describes an insights-driven business as one that “systematically harnesses data and applies analytically derived insight to create differentiated experiences and competitive advantage.”
Their report cites this as a critical factor for maintaining a competitive edge by controlling operational costs while also sustaining steady growth levels. “Companies like Amazon, Facebook, Flipkart, and Salesforce scale their businesses through software and insight, not people. As a result, Amazon generates four times the revenue per employee compared with a benchmark competitor, Office Depot.”
The retail industry is going through one of the most stressful and massive changes in its history. The good news is that automation technology, when aligned with data intelligence to continually refine operations, can empower mid-sized retailers to be more competitive and successful than ever before. To generate more sales, reach more customers, provide better service and products, and optimize business all while keeping overhead down.
These tools and practices enable a customer-obsessed operating model, which many retailers are striving for, especially as the holiday shopping season quickly approaches. Now is the time to dive into your year-over-year data, metrics, and reporting to prepare your retail operation, end-to-end, for the busiest sales time of the year.
To get started, we recommend focusing on these three key operational areas.
Retail Reporting Metrics - Creating a Product and Margin Strategy
Running your operation on a cloud-based retail management platform means you have important data points and reports at your fingertips at any time, from retail analytics and customer insights via CRM, to retail data sets for accounting, inventory, orders and suppliers. You’re equipped to spot areas where retail KPIs were met or missed, and then work on making necessary adjustments.
The holiday season is driven by discounts, promotions, and flash sale days like Black Friday, so getting a clear gauge on your true landed cost of products (associated freight, duty, tax, and storage expenses) ahead of time is essential for making business decisions on pricing in addition to supplier selection.
With this landed cost knowledge for each and every product, you can aptly calculate actual gross margins, review last year’s sales and order data in conjunction with your margin KPIs, and then see how landed costs fluctuated over time and how margins were impacted.
Discounts and promotions can be planned out while knowing how lowering pricing will hit your margins. Tapping your supplier relationships is a key holiday season prep strategy and enables you to negotiate pricing and any deals that may be available, especially for your Black Friday specials and flash sale plans.
The last thing you want to do is miss sales opportunities due to a lack of inventory. Reviewing past low stock reports will reflect product inventory gaps you’ll want to prevent and enable you to then automate the re-orders based on stock levels, re-order quantities, and assign suppliers. Not only will this help prevent sales losses and keep your customer relationships intact, it will give you one less thing to worry about.
Retail data can also enable more granular data analysis, including cost per order, sell-thru rates, and product returns trends, giving you a clear perspective of each area and a global view of your operation.
Sales and Customer Performance Metrics - How Do You Rank?
In today’s customer-obsessed retail mindset, data is your friend when it comes to tracking the buyer’s journey, from first touch to conversion, to ensure you’re delivering the optimal customer experience.
Central to a customer experience with your brand is the performance of your website. Nielsen’s Global Trust in Advertising report states, “branded websites are the second-most-trusted advertising format, behind recommendations from friends and family.”
So it’s smart to conduct a site audit to clean up dead links and pages, resolve issues with slow loading pages or images, and incorporate the data from your Google Analytics to track traffic peaks attributed to marketing campaigns and SEO implementations.
The next key datapoint is reviewing your year-over-year (YOY) shopping cart abandonment rates. How do they compare? Review what measures were taken to resolve potential issues such as the checkout process, shipping policies, product availability, mobile access and other reasons potential customers drop off, assessing any pain points that still need to be resolved.
Remember those recommendations from friends and family? They are a critical aspect of your business, so how do you rank? Do your product pages offer the ability for customers to leave a product review? What do they say? If you have a presence on Amazon, how are you ranking there, and do you continually monitor customer reviews?
What are customers saying about you but not to you on social media and blogs? Using a tool such as socialmention.com will enable you to quickly access and assess both the positive and the negative, and if possible, reach out to those consumers one-to-one. Surveying select customers and providing incentives for feedback is a tried and true method for staying ahead of customer satisfaction needs and wants to ensure your shoppers are happy and are telling their friends.
Your sales analysis report by customer can deliver great insights into buying trends with repeat customers and is a perfect targeting tool for your surveys. When combined with the same sales report filtered by product, you can get a clearer picture of which products most resonated with your most loyal customers. Then you can set up your holiday campaigns to target that select group with similar products for the shopping season.
Marketing and Promotion Metrics – Connecting the Dots
If you’ve brought automation into your back office operations, you’ve now got more time, money, and resources to devote to trying and testing the latest evolutions in digital marketing tools and platforms to cultivate customer relationships. If you’re still on the fence, this is one of the many advantages to making your business move.
One game-changing advertising innovation Google announced at their recent I/O conference was the ability for businesses to connect the dots between a Google web search or AdWords click, and an in-store purchase.
According to CNN, “The credit card companies provide Google with encrypted information about purchases, which Google software then compares to Google profiles of people who viewed relevant ads.” Privacy laws and encrypted data prevent Google from sharing specific customer name and product purchase data with Google’s ad customers, but they can tell you how many customers clicked on your ad, made a purchase in your store and how much they spent: the ultimate in data gold when it comes to tracking the buyer’s journey.
From there you can connect the dots further by aligning your customer insights and CRM data with the Google ad metrics for an even clearer picture of your advertising ROI.
This is a huge move in terms of being able to finally attribute digital to physical in a way that’s not been possible until now. It was also a critical differentiator Google needed to retain their ad dominance, with Facebook as the only other major player, having had to make fast changes to their platform to better support brand safety.
Speaking of Facebook and any other social media platforms being used within your marketing toolbox, this is a good time to perform a social media audit, especially if you’re also spending money on social media advertisements. This will enable you to gauge which platforms work best by customer segment, geographical area, and by product.
As you begin to plan out your holiday season marketing plan, take into account which social media platforms will not only support your promotional efforts, but which ones offer the ability to sell directly on the platform. Many retailers, from small boutiques to large brands like Nike, have embraced and achieved ecommerce success on Instagram. According to The Drum, “The move means Nike will be placing itself front and center of young people’s social media activity – and one step closer to their wallets too.”
Today’s modern retailer has the opportunity to collect more data than ever before, but it’s all in how you use it that matters. We hope this advice will help you to navigate how best to use data to benefit and ready your business for the crazy, busy holiday season.
This article originally appeared on ITProPortal.