Of Customer Insight and Obstacles
‘Valuable customer insight’! It is remarkable how frequently business intelligence consultants and data analysts repeat the importance of data management, leading to achievement of this goal. Receiving valuable insight about customers is of absolute importance in modern retail industry. The focal point of businesses has always been retaining the old customers and acquiring new ones. While understanding customer behavior is considered as the key to decipher the complex levels of customer acquiring and retention, on the other hand, factors like cutthroat completion, newly evolving technology and unique product choices, are making the task to understand customer preference truly difficult.
There is no debate over the opinion that data is the key to unlock the mysterious fathoms of customers shopping preference. Data assortment is also not a critical affair anymore as the modern, tech savvy customers leave relevant data behind at several touch points, starting from social media, POP, promotional content, credit cards to loyalty cards. However, the challenge actually exists with extensive management of the raw data and transforming it into productive, executable information.
Easy to Outsource Data Management but Does It Pay?
Data administrators in retail sector still grossly ignore the undisputed importance of data in understanding customer behavior. This is not only unfortunate but also becoming a huge setback for any retail business in sustaining the challenge from ecommerce counterparts. Retailers still largely opt for outsourcing the task of data management. There are several reasons responsible for avoidance from in-house data management, such as:
- Retailers are still under the misconception that managing customer data in a routinely manner is of secondary important and no way can be regarded as a core function
- Lack of technical expertise in data designing and programming
- As data management is not perceived as a core function, it misses the same kind of focus that key functions receive
- In-house data management is financially burdensome
What retailers keep forgetting in face of the above-mentioned challenges is that they are dealing with a customer base that is tech savvy, searching for increasing levels of convenience while shopping and prefer in-store personalized interaction. The challenge they have is introducing the convenience of web analytics to a physical environment. Outsourcing data simply doesn’t satisfy the dynamics of customer preference in a physical setting. It is crucial to make the data work for retailers in terms of developing valuable customer insight. Data management outsourcing simply fails the entire purpose and also exposes a retail business to several crisis that they will find difficult dealing with in the longer run. Here follows how failure to manage data in-house defeats the purpose of gathering valuable customer insight:
- Response from the outsourced vendor is time consuming and in turn, finding an answer to the associated query often gets more delayed than expected.
- The data analytics results are never real-time. Retailers, naturally, fail to receive any impression of customer reaction to ongoing campaigns. Simultaneously, the scope of making changes to promotional efforts in response to customers’ reaction narrows down.
- Data security is largely threatened as the vendor providing service to one retailer, could also be delivering services to its competitors.
- Often the data management vendors do not provide holistic picture of the analytics, as they focus dealing with different data sets and retailers are compelled to go through a lot of trouble in putting together the results from different data sets to find what they actually require.
Ready with In-house Data Management System to find What You've Been Missing
In-depth data management and analytics are the best hopes for retailers when it comes to retrieving valuable customer insights. The modern retail era requires businesses to provide personal attention to each customer, especially while they are searching for the desired product in-store. Collection of data from various touch points and in-house analysis of the same helps businesses to have an in-depth understanding of their customer requirement, preference and their real-time response to the promotional campaigns. However, the promised benefits of in-house data management can only be derived if the following initiatives are undertaken:
- Creation of a holistic analytics solution, helping retailers with customer segmentation
- A system that can precisely calculate lifetime value of consumers
- A system that should deliver valuable indication about customer behavior at different seasons or at different phases of life
- The system should be able to monitor transactional data almost real-time
- The system should be flexible enough to deliver all valuable insights in a comprehendible manner, comprehensively on a dashboard
- Retailers should be able to generate real-time reports about a specific area of functioning
- The system should be providing retailers with real-time updates and insights about activities at the point-of-sale and the reason behind creation of such activities
In-house data management is the best option for retailers in churning the relevant customer insight from the collected raw data pool. The challenge that most retailers will face, if they are determined to opt for in-house data management, is orienting the system architecture accordingly. Retailers, alongside, should stop regarding customer data management and analytics as a non-core area of operation at the earliest.
Once the attitude changes, the desire to improve automatically follows.