Should retail businesses be data-centric or customer-centric?
Delivering a great customer experience, or being a customer-centric business, has become an increasingly higher priority for many retailers, as customer shopping trends have evolved. This change is being brought about by customer demand for a new shopping experience, be it online or in physical retail stores. With today’s customer becoming increasingly digital in their day-to-day lives, the expectation of retailers is for them to deliver a customer experience which is as seamless and frictionless as ordering an Uber or getting a takeaway. The recent COVID-19 pandemic has accelerated this trend significantly – due to necessity rather than desire, and now retailers are under pressure to pivot and adapt their models in much-reduced timescales.
We know however, that the retail world relies on data. Within a retail business, having well organised and accurate data sets lays the foundation for operating effectively and delivering profits. From ensuring margins are correct and protected across all products, to strategic decision making and commercial planning, a foundation of well organised and accurate data is the key component.
This poses an interesting conundrum for retailers – should we be data-centric or customer-centric?
Of course, the obvious answer is both! In reality though, with increasing costs, increasing competition, and pressure on margins, investing in data isn’t as appealing to retailers as customer experience, and selling yourself as a data-centric business isn’t going to light up the eyes of the marketing teams. By thinking in these terms though, we are missing the point that was eluded to above – that data lays the foundations. Taking a data-centric approach, provides the fundamentals that enable a retailer to be more customer-centric, and to enable better strategy and decisions.
Think about it, analytics and insights which are used to help provide a better shopper experience are based on data. Promotions and offers will be implemented based on data. Availability of products across all a retailer’s channels relies on data. And of course, the bottom line is that retailers are in business to make money. What good is the greatest customer-centric strategy ever created, if you aren’t making any money? The only way to ensure a retail business is profitable is through having control, visibility and integrity across your data; protecting margins, reducing errors, mitigating risk and cutting losses. If in the process, you can provide uniform data across the business, consolidate systems, ensure everyone is working from the same source of data – including suppliers, and automate processes, thus reducing labour and costs, then time and money can be spent elsewhere, say, on customer-centric activities.
So to answer the question, a retailer should and can be both customer-centric and data-centric, but although the two go hand-in-hand, it is arguable that being truly customer-centric isn’t achievable without being data-centric first.
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Meet the author
This article was originally posted on LinkedIn by Matthew Bazley, rascal system’s Commercial Director. Connect with him on LinkedIn to stay up to date with future posts and industry thought-leadership.