Changing the Narrative: Setting the Stage for Retail Recovery, Part 2
In part one of this article, I examined the challenges that the retail sector has faced since the beginning of the pandemic, and its inability to rely on traditional historic consumer data when it comes to meeting consumer needs.
Artificial intelligence (AI) and machine learning, however, could be the key to providing retailers with the tools they need to recover and rebuild their business operations. AI offers the technology needed to make swift adjustments when situations change in a matter of hours. It can quickly detect patterns in the data that separate real-time information from background noise.
“By alerting the retailer of emerging trends that human analysis would miss, AI gives retailers time to change product mixes, merchandising, messaging, etc., to increase sales,” Geoff Watts, CEO of retail technology firm EDITED, told PYMNTS.com.
One thing AI can do is track multiple and disparate sources of data and parse that information into something specific that retailers can use to anticipate what they should have in stores and how consumers are behaving. For example, AI offered glimpses into what was happening in China in the early winter, not just with the virus, but within the supply chain. Similar data could have investigated the buying habits of Europeans, where countries were on strict lockdown. That data could have then been translated for American retailers to anticipate what consumers were buying in person, what they were buying online, and where shortfalls would be in the supply chain.
Data Infrastructure and Management
COVID-19 hasn’t been all doom and gloom for the retail industry. Online retailers saw a boom in business in March, with sectors like home goods, athletic supplies, and loungewear seeing record numbers. Shopping online made sense, but why did those particular sectors do so well? They sold products that met the needs of people spending all of their time at home. Not only did they need flour and yeast to make bread, but they also needed the right cookware. With gyms off-limits, consumers wanted workout equipment. And yoga pants are perfect Netflix-binging attire.
“Retailers need to have an agile, real-time focus — this applies to all areas of the business, including but not limited to marketing, cash management, inventory management, and supply chain,” stated Total Retail. “An example of this is using real-time analytics and data to quickly pivot marketing/media dollars to capture demand in the online channel.” Those retail sectors that did well during the shutdown had the items consumers wanted. With the country reopening, those needs will shift, and real-time data and analytics should be advising that yoga pants buyers now need new work clothes.
The challenge isn’t just adjusting to the current consumer mind-set, but also coming up with solutions to stay afloat if customers don’t return to pre-March levels of purchasing or a second wave creates a setback. Here’s where data about consumers can help retailers be creative and stay in business. According to the Harvard Business Review, “Knowledge of your customers has never been more valuable to your business. Marketers need to analyze data about their customers’ behaviors and buying habits on a daily basis to learn what's changing and what's not. What new unmet needs have emerged? What new pain points have surfaced? What new markets are emerging for your company?” Also use that data to create unique opportunities for regular customers that subtly encourage them to make a purchase. Hold an online book discussion and offer that book and corresponding products for sale. Fitness centers are using data to help determine their most popular classes and offering them online to members and potential members.
Retailers have long depended on data to build a loyal customer base. Those strategies, like loyalty programs and sending targeted coupons or product suggestions while shopping, will encourage your customers to return when they can. But retailers thrive when they attract new business. Data will now be the driver for post-COVID recovery, as retailers discover how data and technologies offer the information needed to restructure inventory and service in what promises to be a very unsettled future.
Nick Jordan is founder and CEO of Narrative.io, the enterprise data streaming platform company.
Nick Jordan is founder and CEO of Narrative.io, the enterprise data streaming platform company. Nick founded Narrative in 2016 after spending nearly a decade in data-related product management roles including Yahoo!, Demdex (acquired by Adobe), and Tapad (acquired by Telenor). The author can be contacted on LinkedIn.