Are You On The Front Lines Of The Data Analytics Revolution?
By Jeanne Roué-Taylor
Make no mistake, there’s a digital revolution happening, and that revolution is completely changing the world as we know it. What’s more, it’s happening with the greatest impact in the way consumers and retailers interact. In a McKinsey report published this week, the management consulting firm summarized its interviews with eight companies that are leaders in data analytics. McKinsey came to the conclusion that data and analytics aren’t overhyped, but are oversimplified—it takes real work and strong knowledge for organizations to take full advantage of the power of increasing levels of information and the patterns therein.
In regard to retail, specifically, McKinsey said the following:
Retailers, for example, can harness data to influence next-product-to-buy decisions and to optimize location choices for new stores or to map product flows through supply chains.
This statement is actually a highly nuanced challenge to retailers.
The Landscape of Retail
While some brands have invested in new technology and techniques to take advantage of data analytics, many are still on the sidelines trying to decide when and where to react, if at all. Those who have invested are finding out that many packaged applications don’t have the flexibility to manage new channels or take advantage of advanced data analytics.
These are challenging times for those on the front lines, trying to actively decide what steps to take next. Retail has always been about margin, and maintaining margin had settled into a fairly predictable place before the world went digital and mobile. The amount of data being generated offers each brand the chance to create new business and take it away from the competitor by knowing far more precise details about the customer, the product, and the sales channel. Traditional margin models are being exposed as outdated and ineffective in the face of these changes. Those who will survive the revolution will need to move off the sidelines and build new business models supported by flexible, smart technology.
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