I am a big fan of RSR’s benchmark reports; they are topical and effectively portray the challenges retailers are facing right now compared to years past. For the recent benchmark report, “Retail Analytics Move to the Frontline”, analysts Brian Kilcourse and Paula Roseblum conducted an online survey of 130 retailers from November – December 2013 to find out where business intelligence (BI) and analytics fit into operations and overall strategies for retail success. Based on their findings, the duo concluded that retailers that understand the strategic importance of the new data available to them are already becoming today’s winners. They summed up their findings stating, “Information = Intelligence = Winning.”
Key highlights of the report include:
- 47 percent of respondents use data to manage relationships with customers;
- 18 percent of respondents are rethinking their enterprise-wide BI strategy;
- Retail “winners” consistently put more emphasis on making decisions using experience/intuition + data;
- The largest number of respondents (55 percent) believe that Marketing is the internal organization that would gain the most from greater use of BI and analytics;
- Lack of analytical talent is a major organizational inhibitor for retailers. In fact, 51 percent of RSR’s “winners” agree that lack of talent is a roadblock for them.
These findings further validate our beliefs based on the conversations we have with retailers every day. While a majority of retailers now understand the value of data and predictive analytics, they just don’t have the manpower or the know-how to effectively put it to use. I talked about this issue at length in my recent post, “The Talent Challenge: Marketing Science Scarcity.” It’s not shocking that RSR found that the retail industry is not immune to these issues. As I mentioned in my post:
“Because they are in such high demand, data scientists look for the “cool”, high profile jobs – you know, those with a sprawling campus, free food and other amazing perks. This is in no way a knock on retailers, but if you were a data scientist stud looking for a job and excited to change the world, would you accept an offer from Instagram/LinkedIn/the “next” Google…or would you choose to work for Boot Barn? If you loved retail that much, my guess is you might go to Amazon before anyone else.”
This shortage of talent is going to be a problem for retailers who feel that data is critical to their future success (in other words, ALL retailers!) and that problem is only getting bigger as the need to actually deliver results is now growing. Per RSR, the top retailers are actively using data to stretch their lead. If you are a retailer who is not already doing the same, you don’t have a moment to lose. And difficult, long recruiting cycles are not going to help!
The answer to the “talent challenge” is to look outside your organization to technology partners who can serve as that missing resource and handle the data collection and analytics for them. There is some evidence that is already happening. RRS reports that many retailers (about 1/5) are rejiggering their BI strategy. BI isn’t the full solution but it is part of it – look for more evidence of this trend in the coming months!