How Is Retail Using Data Online
– How is Retail Using Consumer Data Online
Retail data and analytics are incredibly valuable tools when it comes to the e-commerce and retail industries. Insights from consumer data-driven analytic software allow companies to create more targeted and more effective marketing strategies. It also fuels predictive analytics and forecasting software – giving retailers an in-depth look at the market and upcoming trends.
– Why Is Collecting And Using Consumer Data Important?
Before modern data analytics technologies, merchants were forced to make decisions with minimal insights and lots of guesswork. Today’s data analysis and data-driven decision-making allow companies to optimize pricing, customer acquisition, marketing, and merchandising to produce highly accurate and effective outcomes.
– Tracking Online Activity
Countless tools and software options are designed to track online shopping activity and behavior, evaluate data, and sync up with in-store metrics. The best tools for your business depend on your specific needs and the parameters of your industry. While some companies can sufficiently monitor and manage customer and purchase history data using a variety of tools, it can be challenging to achieve optimal results this way. Proper data management and usage is a complex endeavor.
Many retailers choose expert consultants like T-ROC to help collect and analyze data from online sales as well as retail locations. In an omnichannel world, the greatest difficulty is often to merge both to have a single view of the customer. Whatever option you choose – online, instore, omnichannel – it is vital to ensure you have not only retail data analytics processes, but full, integrative insights. Data interpretation and forecasting require proper understanding. Otherwise, you end up with random metrics and no clear strategy on how they fit together or what they mean for the big picture of your business.
– Structuring Data Into Knowledge
The data you collect is limited only by your technological access and intentions. But when it comes to a business analytics program, more is not always better – at least not on its own. Your company may do an excellent job of tracking online activity and collecting data sets, however, more often than not, you are left with a lot of numbers and no real insights.
Proper customer data analytics and forecasting tools structure data into reporting and visualization that highlight relevant information for your goals. For example, your compiled data may reveal that surfboard sales are up 20% over the last quarter. You may guess that ordering more surfboards would be a good idea. But without properly structured, analyzed, and interpreted data analytics, you may not know how to utilize that information beyond the obvious. In this case, did seasonality – summer vs. winter – have an impact on surfboard sales.
A robust, comprehensive reporting software, set of analytic tools, or expert third-party reporting can take that big data set and compare it to past sales historicals, forecasted market changes, and customer satisfaction information. They can then use this to determine that while you should increase offered surfboard stock by 10% next quarter, you should also stock and advertise camping gear which should sell even better. Ultimately, unstructured big data without insight is just noise – you need to partner with experts or invest in high-quality software and analytic teams to reveal what that data is saying and how to maximize it to increase revenue.
– Conducting Online Surveys
One of the best ways to gather useful market data is simply to ask. Often customers are happy to provide direct insight into their sales history, plans, and personal data. Market research is a tried-and-tested way to glean valuable insights into where the market is going and what customers are looking for. Conducting your own market research also allows you to tailor information specifically to your exact customers. Publicly available market analysis data that covers industry-wide trends is helpful, but only to a point.
There are four main market research categories, all with unique pros and cons.
- Surveys – While customer surveys used to be performed via clunky mail and in-person paper surveys, today’s online landscape makes this type of market research easy. Survey pop-ups on your website, paid surveys via market research companies, or surveys that serve as entries into some kind of raffle for a prize make it easy to gather valuable data directly from your consumers.
- Companies can opt for straightforward yes or no questions, sliding scale answers, or include space for longer, freeform responses. No matter what type of information you’re searching for, make sure your surveys aren’t too lengthy. Especially for free surveys, customers are less likely to finish and submit a survey if you ask too many questions all at once and there is a high time requirement. While limited in response length and flexibility, this research method is inexpensive and simple – making it a popular option for many businesses.
- Interviews – Directly interviewing respondents often yield the most helpful and in-depth results. Interviews can be conducted in person or over video conference software. Interviewers are free to ask questions as they arise and get real-time direct responses from consumers.
- There are, however, a few drawbacks. Because one-on-one interviews are time-consuming, it isn’t possible to get the same pool of respondents you would with a survey. You might only interview 20 people in the time it would take to get 2000 survey responses. It can also be costly, as most interview subjects will want some kind of compensation in exchange for their time.
- Focus Groups – On the surface, a focus group may seem like an even better version of a one-on-one interview. All the personal responses and real-time interaction, but with the added bonus of more answers and a more efficient approach. Unfortunately, focus groups can be challenging to implement successfully.
- These groups often give wildly varying results that can be difficult to interpret. One major issue is that a strong personality in a group can end up influencing other consumers’ responses. Group dynamics make it difficult to get unbiased, accurate information from respondents. This approach can still yield excellent information but should generally only be implemented by a professional third-party company with experience managing focus group programs.
- Observation – Observation can yield some of the most powerful insights into consumers’ behavior, thoughts, and habits. Observation-led consumer research is when a company representative watches a consumer interact with their product without engaging them.
- They can see the organic reaction and process of an unbiased customer in real-time. The major downside of this, besides the logistic pitfalls that also affect a one-on-one interview method, is lack of communication. To observe the consumer interacting with the product in real-time without bias, the observer cannot ask questions in the moment, which can be frustrating and limit insights.
– Leveraging Social Media
One way the retail sector has evolved is the rise of customer interactions through social media. Most companies understand the value of a strong, omnichannel social media presence and engaged following. Brand exposure, organic advertising, and influencer collaboration are all facilitated by a company’s social presence.
When it comes to retail data analytics, companies can also use monitoring tools and trackers to keep a pulse on what customers are saying about their brand. Instant feedback and the ability to “eavesdrop” or converse with customers make it easy to learn what your target audience likes and dislikes regarding retail choices.
How is data used in online retail?
Insights from consumer data-driven analytic software allow companies to create targeted, highly effective marketing strategies. It also fuels predictive advanced analytics and forecasting software – which will enable retailers to take an in-depth look at the market and upcoming trends.
How do retail stores collect data?
Retail businesses use a blend of online traffic and shopping data, market research, brick-and-mortar store data, social media, and other key data sources to inform and fuel their retail analytic tools. Third-party experts are often used to streamline this process and optimize results from complex data-tracking technology.
How has the Internet affected the retail industry?
Online shopping has exploded in popularity, and even in-store purchases are often combined with online research or in-store pickup options. This is incredibly useful for businesses as the internet allows for much more detailed and easily accessible shopper data. From social media followers and mentions to virtual shopping cart tallies, online spaces let businesses learn more about their company’s metrics than ever before.