Digital-first retailers are better primed to meet customer demand
Customer shopping behaviour is driving the digital transformation of businesses, and retailers who are adopting a digital-first approach address changing customer needs better than those who don’t.
What is a ‘digital-first’ retailer?
Digital-first retailers focus on delivering a multi-channel customer offering and adopting a transformational mindset across their businesses. The approach spans:
- Operations; replacing legacy IT with quicker and more efficient systems
- Online channels; providing powerful, e-commerce platforms
- Convenience; investment in digital technologies, enhancing the customer experience
By embracing a digital-first approach, retailers position themselves to meet the growing customer trends to shop online, or at their local store. Successful digital-first retailers understand the customer journey – how shoppers discover, share and buy – and they deliver a seamless shopping experience with fast and easy checkout, and secure payment services.
Critical success factors
To ensure this digital-first approach is successful, retailers need to ensure their data meets the 3 C’s of Master Data: Clean, Current and Correct. Focusing on Master Data Management (MDM) is the most effective way to deliver quality master data that forms the bedrock of a digital-first strategy. On its own MDM will not provide a retailer’s digital transformation. However, failure to invest in consistent data standards, especially on product and pricing, comes back to bite when extending to a multi-channel offer.
According to Matt Bazley, Head of Sales at rascal systems, MDM lays the foundations for a digital transformation strategy by providing clean, accurate data, which facilitates faster and more informed business decisions, giving retailers the flexibility to adapt and evolve to customer demands.
“Being a successful digital-first business is ultimately about having the right data, in the right place, at the right time. Without MDM, this is unachievable” Bazley says.
Opportunities and pitfalls
Customers are driving transformation in retail. In today’s ‘always-on’ world, customers are always connected and engaged, and increasingly interacting through non-traditional channels. This trend has been with us for several years now, but the COVID-19 pandemic has simply accelerated the change in customer behaviour, with significant shifts to online and local convenience stores.
Employing new digital technologies presents an opportunity to drive business efficiencies – both in-store and online – and make shopping easier for customers. Retailers that deliver a consistent, frictionless customer experience are more likely to be rewarded with increased loyalty. According to a Nielsen survey1 75% of customers believe that technology can provide solutions to help simplify their lives.
Bazley, however, warns retailers against accelerating their strategies too quickly, by jumping ahead to implementing technologies such as AI and machine learning, without first laying the correct, data-led foundations. “Taking the time to put data at the heart of operations and strategy is critical, as it makes the decision-making process much more efficient,” he states. “Good decisions made on bad data often end up being bad decisions,” he says.
Data quality has been invaluable at Majestic Wine, both during and coming out of the crisis. Chief Information Officer, Robert Cooke, explains: “In more normal times, our strongest USP is the ability for customers to chat to wine experts on the shop floor, and taste for free. Without customers being able to come into our stores, this has not been possible,” he says.
“However, having data to back up our colleagues as they turned to a home delivery model has ensured they can still recommend wines customers will love, via email or over the phone. While our stores have been closed, we’ve been working hard to refresh our wine range – and get back to what we do best. That’s because our staff have the accurate information to be able to recommend these wines, with confidence, based on data.”
Central England Co-op has been spurred on by the trend to shop more locally due to COVID-19. Investment in new tech, including an online click and collect service and a scan and go app, is geared to meeting new customer needs. Central England Co-op’s IT and Digital Director Liz Robson says: “We want to strengthen communities through quality convenience. That isn’t just about shopping at a convenience store, it is about making the customer interaction easier and more relevant for them.”
MDM responds to changing customer needs
Solutions like rascal systems’ MDM platform equip retailers with the ability to meet customer needs, regardless of which channel they interact with. Providing consistent customer experience is crucial as shoppers build relationships with retailers, not their technologies.
MDM helps retailers manage the complexity that servicing multiple channels brings. In convenience for example, MDM gives retailers the tools to better handle challenges, such as smaller case and pack sizes, local product assortments and the associated supplier management challenges these bring.
At the same time, MDM provides the ability to manage product and pricing data sets through a single cloud-based platform, shared between the retailer and its suppliers. A shared master data platform drives more efficient and effective data controls and means time is saved from correcting data-driven errors throughout the business.
A single platform is vital to ensure consistent data management processes. All pricing, ranging, promotions, margins and other product data, is protected by robust controls and rules.
In essence, MDM enables retailers to deliver the right product, to the right channel, at the right time, confident that the underlying data is accurate. Bazley says: “When selling products in multiple channels, maintaining control over costs and margins becomes increasingly complex, but increasingly important. You can have a fantastic cross-channel customer proposition, but with the pressure a multi-channel offer puts on margins, getting data right is crucial.”
It’s not about having the most data, but the best data
As McKinsey reports2, the shift in customer behaviours is set to continue post-COVID-19, which includes the flight to digital and omnichannel. Most categories have seen more than 10% growth in their online customer base during the pandemic, and many customers say they plan to continue shopping online.
While the recent crisis has driven significant change in customer shopping patterns, it has reminded the industry of the power of the right data, according to Mike Watkins, Head of Retailer and Business Insight at Nielsen. “It’s not about having the most data but the best data,” he says. “The pandemic has accelerated what was happening anyway. Now it’s about using data to reappraise and accelerate the reinvention of stores around the shift to digital and online. It’s a fundamental reset of retail,” he argues.
To discuss any of these topics or find out more about rascal systems’ solutions, please contact us.