As the omnichannel marketplace evolves, the list of demands on a retailer’s time and resources keeps growing. From engaging today’s customer in new and meaningful ways to ensuring products are stocked on the shelves, how do you also make sure you are on top of trends?
Enter the need for data. By leveraging data, natural products retailers have the opportunity to turn what was once an art into science. With data, you can find out which new items have just hit the market and how they’re performing before you order them for your shelves. You’ll know when a trend is starting to peak, so you won’t get stuck relying on short dates and spoilage to recognize the end of a trend. And if you’re investing your hard-earned dollars in promotions, you can make sure you’re seeing the return on investment with new customers coming into your store and current customers buying more. Finally, data help you fail fast then recalibrate efforts with efficient exception reporting, allowing you to refocus your time on customers and the innovation YOU want to pioneer.
If you’re not leveraging data to optimize your operations, you could be costing yourself time, money and even credibility with your customers. Here are three telltale signs you need data to compete at retail.
1. You’re losing track of the trends—and it shows on your shelves.
Paleo, vegan, pegan, vegetarian, flexitarian, reducetarian, plant-based, whole grain, grain-free … if you can’t keep up with the latest diet trends, then you don’t know how to cater to the consumers buying into them or which complementary products your shoppers are seeking.
Using data to track key growth drivers such as transparency attributes, lifestyle diets and third-party certifications not only shows you what’s happening in your stores, it gives you a chance to catch up on the trends that your competition is already capitalizing on.
Most importantly, data allow you to take trends and apply specific retail activities to them. For example, if more customers are asking you for plant-based eating tips, you can use data to identify which new items to bring in that satisfy this way of eating.
2. You don’t know if your pricing, promotions and margins are helping you collect the most revenue from the most customers.
If you don’t know where your items are overpriced or underpriced against the competition, you won’t know if you’re driving away good customers or shortchanging yourself on margin. Using data to index your pricing and share of promotional dollars will sharpen your competitive advantage and help you earn and keep customer loyalty.
You have a significant investment in how you manage your pricing and promotions to attract and retain the most customers. Just as you would manage personal investments, you want to track and invest your stores’ margin dollars and vendor trade funds wisely. Data analysis gives you a consistent way to evaluate your return on investment.
3. Your category management process is based on gut feelings and guesswork.
Effective category management brings a focused and fact-based approach to managing your store, identifying the kinds of products and categories that are most important to your customer. Strong category management is proactive, efficient and on-schedule to capture key opportunities that maximize your shoppers’ loyalty to your store.
If your process doesn’t do that, you’re leaving money on the table.
Data give you a much more robust understanding of your customer than you’ll get from anecdotal feedback, day-to-day observations or gut feelings. With data, you get both the precise focus to drill down to the best and worst performing items on your shelves and a broader perspective that lets you benchmark your stores’ performance against your competition.
Independent retailers hold the unique position in the marketplace to move fast and incubate innovation with new products and brands. And now big retailers aren’t the only ones capable of integrating data into their procurement, pricing and promotion processes, which means independents truly can leverage the best of both worlds.
Kathryn Peters is the executive vice president of retailer services at SPINS.