CHICAGO: Many retailers are failing to successfully exploit the volume of customer data that is available to them, whether that is collected by technology or comes in the form of interactions between customers and staff, a new report has claimed.
The Achieving Excellence in Retail Operations
(AERO) Study, from consultancy A.T. Kearney, examined the strategy, tactics, and execution of retailers in multiple sectors in more than 20 countries.
It established that there are many underutilized sources of customer data; and, to take full advantage of these resources, retailers need to increase investment in technology and skills.
The report pointed out, for example, that less than half of retailers collected social network data from third-party domains, while just 8% felt this was "very important" in generating insights.
Leading retailers were found to be the best at collecting data, measuring activities, acting on their insights, and measuring again to see the results.
Joel Alden, A.T. Kearney partner and co-author of the study, commented, "Leading retailers encourage measurement of the right data, invest in the skills to gain insights from that data, and use those insights effectively to frame future actions."
As well as dealing with the proliferation of technology and vast quantities of store and customer data, retailers were advised to maintain their focus on the basics of retailing, namely the interactions between employees and customers.
The study found that retailers that most actively engaged their employees and customers were the most successful.
Few retailers, however, were seen to take full advantage of the insights of frontline staff who deal with customers daily and gain valuable insights into their needs.
"The problem today is a lack of formal requirements or processes to gather these employee insights," said Adam Pressman, A.T. Kearney principal and co-author of the study.
The study also looked at how retailers operated in a multichannel environment, where customers return products ordered online to a brick and mortar store, or ask a store employee to order an out of stock item through another channel.
When employees are not measured on the success of non-store channels, they have little incentive to encourage the growth of those channels, A.T Kearney said.
Data sourced from A.T. Kearney; additional content by Warc staff